Arvind Jolly Welcome Speech at Annual Stakeholder meet

Welcome Speech by Mr. Arvind Jolly  at Annual Stakeholder meet

Ladies and Gentlemen,

I welcome you all to this Annual Stakeholders Meeting. Companies abroad give greater importance to their Stakeholder as against the shareholder, this is because the Stakeholder has a daily, interactive interest in the welfare of the company. His business and profits depend on the goods or services he buys or sells to the company. If the company prospers he prospers. As major Stakeholders of the company I welcome all of you as my Partners in the success and welfare of this company. This conference was primarily organised to meet and interact with you, and then of course to get your feedback and suggestion. Your feedback is important for us to improve the products and service we offer. We have a long day ahead, and I am really grateful to all of you who have taken great pains to be present here today from all over the country. Very special thanks to all of you especially those who travelled from distant Calcutta and Orissa.

Jolly Board Limited  (Formerly Anil Hardboard Limited) was founded by
Mr. Govind Ram Jolly Incorporated on 10th December 1956 in Mumbai.
 As many of you are visiting Mumbai for the first time, I would like to speak briefly about the company’s history, its past, present and future. Jolly Board was established by my father Mr. Govind Ram Jolly in 1957. My father story was a rags to riches story. He came from Karachi as a refugee. GR, as he was popularly known started business as a building contractor, he flourished as a Government contractor and decided to turn entrepreneur.
Mr. Govind Ram Jolly  commissioned India’s first Fibreboard Plant (Hardboard)
in 1958 at Kanjur Marg, Mumbai Capacity : 6,000 Tonnes per annum
He was a pioneer in his time, he set up India’s first hardboard plant right here in Kanjurmarg, Mumbai in November 1958.
India’s First Fibreboard plant was inaugurated by Honorable
Shri Lal Bahadur Shastri,
 Union Minister for Commerce & Industry on 22nd November 1958
The company did well initially and three years later he started the soft board plant in 1961.
Three years later in 1961, Jollyboard commissioned India’s First Softboard Plant.
Capacity : 6,000 Cubic Meters per annum
Honourable Union Minister for Food & Agriculture,
Shri S. K. Patil inaugurated India’s First  Softboard Plant
on September 2, 1961, at Jollyboard Kanjur Marg, Mumbai
A few year later he added the second hardboard plant   inaugurated by Lal Bahadur  Shastri, who was the then  Prime Minister of India.  This is a rare honour and national recognition given to my father to have the Prime Minister of India inaugurate the plant.
 Jolly Board commissioned its second Hardboard line in November 1964. This plant
doubled its Hardboard manufacturing capacity from 6000 tonnes to 12,000 tonnes
In acknowledgement of Mr. G.R. Jolly’s entrepreneurial skills in setting up the
Fibreboard industry in India, political stalwarts like
Prime Minister of India, Shri Lal Bahadur Shastri,
Shri. S. K. Patil and Shri. Y. B. Chavan consented to
inaugurate Jollyboard’s third plant on November 1, 1964.
 Jolly Board Ltd. – Kanjur Marg, Mumbai 1958 An aerial view of Jolly Board’s Kanjur Marg Plant
built by our Founder Mr. Govind Ram Jolly
The company did extremely well in the following decade and my father was encouraged to set up a factory in Canada Anil Canada, inaugurated by the then President of India Dr. Zakir Hussain.
In 1967, Jollyboard Ltd. set its sight overseas.
Mr. G.R. Jolly launched Anil Canada Ltd
to manufacture Hardboard in Nova Scotia, Canada.
Capacity: 40,000 tonnes per annum
As the Government of India’s appreciation for
the country’s first overseas venture,
Dr. Zakir Hussain, President of India inaugurated Anil Canada Ltd.
But the scene slowly changed, the later 1970’s proved to be the dark hour for Jolly Board when I joined the company as CEO in 1977.
In 1977 Arvind Jolly, Mr. G. R. Jolly’s son joined the organisation as CEO. He took over during a difficult phase in the company’s history, during a period of escalating energy costs and serious take over bids. Arvind Jolly initiated some major restructuring within the company. 
Two more hardboard plants had been established by competitors in the country. Escalating energy costs, competition, price cutting were major issues.. Jolly Board was the worst sufferer as it had a very high manufacturing cost being located in Mumbai. Mumbai was known for labour troubles. In 1981 amidst serious take over bids we lost our Founder Chairman Mr. G. R.Jolly.
 In 1981 we lost our Founder
Mr. G. R. Jolly ……. a great visionary.
 As a tribute to Mr. G. R. Jolly’s contribution to Kanjur Marg, where Jolly Board is located,
the Brihan Mumbai Municipal Corporation named a new link road off the Eastern Express Highway
as the ‘Seth Govindram Jolly Marg’ 
By the early 1980s I managed to successfully initiate some changes. The company did well and made reasonably good profits and was able to pay off its liabilities. It was clear to me that Mumbai was not the location for a hardboard and soft board plant. With a view to shift our manufacturing facilities we purchased land in Aurangabad and started soft board production in 1974 in Aurangabad.
A Board Lamination Plant set up in 1978 marked the beginning of
operations in Aurangabad. 
To capitalize on locational cost advantages and to meet increasing demand a Softboard Plant imported from Turkey was installed  at Aurangabad in May 1996. Capacity : 15,000 cubic meters per annum
Aurangabad - Factory Entrance
In line with our efforts to expand manufacturing operations, the company acquired
from Hindustan Lever Limited in Oct 2006 a 20000 Sq. Meters property adjacent to
our Aurangabad plant
In 1997 we purchased 100 acres of land in Sangli and set up a hardboard plant. The 1990s were good years for the company. We were able to reduce our manufacturing costs. We spent nearly 80 crores in Aurangabad and Sangli with hardly 10% bank borrowing.
In 1999, Jolly Board achieved another milestone.  A hardboard plant, imported from France was
set up at a new location in Sangli, Maharashtra. Capacity : 15,000 Tonnes per annum
Jolly Board’s Hardboard Plant at Sangli
Plate Size : 16’ x 5.3’ Press openings : 25 nos.
In 2000, Jolly Board imported Softboard Dryer from Fletcher Challenge, New Zealand and installed it at Sangli. Length :72 Meters    Capacity : 50,000 Cubic Meters per annum

Life was not easy and we were stuck by a Supreme Court order that we are not allowed to use wood unless we have the licence. In 2000-2002 we had no option but to reduce our hardboard manufacturing. This was a big blow as 70% of our turnover came from hardboard sales.

We converted our hardboard facilities in Sangli to manufacture soft board. In Mumbai we knew we had a valuable area in our land and we in partnership with Lodha developed the Mumbai factory in 2005. I must tell that it is much easier to start a factory than closing the operations. We had to give VRS to all our workers. We had to pay off the banks. We had vacant space which were rented out to various people and we had to pay compensation to the existing tenants to vacate our premises. The present and the past is available to you in pictures and what we have achieved in Mumbai is for you to see personally. I am sure all of you have been able to go through the campus and see the vast transformation which has taken place in this area.

I now come to the present. As you know we lost 70% of our turnover with the closure of the hardboard plant. It was not easy finding new markets overnight to replace hardboard with soft board. Our only alternative was to export our excess production. We have been able to achieve this due to the brilliant marketing efforts of my son Arjun. We are now an export company and we export more than 70% of our production. Our export sales are growing by at least 10 – 15%. Government of India through CAPEXIL has recognized our efforts and we are the winners of the Top Export Award in the Plywood and Panels category for the fourth consecutive year. Our prices are most competitive in the export market and we have to match the quality standards of the Europeans.

The company has to re-invent itself to remain in business. We had changed over the years. We shifted from Mumbai to Aurangabad and Sangli to reduce our manufacturing costs. We found new markets and new products to replace hardboard.

The board business for any company anywhere in the world is never a great business and a profit of 10% p.a. is considered a great performance. The company exports 70% of its production, faces great challenges in meeting schedules, quality standards and competitive prices. We have met these challenges and we continue to grow. Besides the banning of wood we had to face major challenges like new environmental and pollution laws. Ours is a manufacturing by wet process and we have to treat all the water we discharge. We have taken up this challenge that we will treat the water and re-use it.

The re-use of water has helped us to meet the environment regulations, but has caused us quality problems, as the board does not have the white finish which is required for the local furniture market and has odour in some seasons. In order to circumvent this problem we have invested in a new evaporator. The new evaporator will be erected by June and this will treat our water and we will not have to re-use it. I am confident that I will give you a very nice looking board which will be odourless by the second half of 2012. In the past 3 years we have not been able to increase our prices neither in the export market nor in the local markets. At the same time as you all know due to inflation our manufacturing cost increased by 10% p.a. In order to meet the challenges we are trying to produce more and have invested in a new energy efficient boiler and a pulping machine to improve the quality and reduce energy cost. Any company that does not meet up to the new challenges faces a bleak future. Over the years we have met with all the challenges as we have to re-invent ourselves with your support in times to come. In the future I see a great future for the company. This is inspite of the fact that alternate products are available which are similar to our products.

As we go forward we realize that in the year ahead there will be great opportunities for us and greater challenges as we face competition from overseas products, alternate products and competition from similar products.

We realize that we have to be competitive, and you know that inspite of India’s high inflation we have not increased the prices during the last 3 years. We realize the importance of quality. We have two types of customers. The first type are the ones who use it for furniture and pin boards, and they want the boards to be as white as possible. The second type of customers are those who use it for expansion joint fillers and construction and they want the boards to be as black as possible. This presents greater challenges and we realize that in order to survive quality will have to become topmost priority. We are modernizing our Sangli plant with new boiler, pulping equipment, evaporator with the intent to improve our quality and reduce our manufacturing cost and double our production.

I assure you that when we meet next year we are going to have many more satisfied customers.

We have an open mind and in order to re-invent ourselves we are exploring the possibility of manufacturing our products through dry process. This will give us flexibility to use cement and other adhesives to improve the quality of the products, increase its usage, boost production. I assure you that you would be proud of your association with Jolly Board. We always believe in keeping good relationships. Most of our dealers and distributors have been with us since inception of the company and it gives me immense pleasure to see the Kanchwallas, Muljis, Gurind, Empee and various others sitting with us on the same boat for more than five decades.

Once again I thank you so much for taking all the trouble to come for this meeting. I am sure this meeting will be a fountainhead of new plans, products and strategies for the company. I wish you all a great day and thank you