Page 215 - ANNUAL REPORT DESIGN

Fibres From nature
Directors’ Report to the Shareholders
Your Directors present the audited financial statements for the year ended 31 March 2015.
Global Economic Scenario
Across the globe, economic growth remains at moderate levels, with uneven prospects across the key countries and regions. Overall global growth is projected to be 3.5% in 2015 as compared to a growth of 3.2% in 2014. Thus, the outlook for advanced economies is positive as compared to last year. However, growth in emerging market and developing economies is projected to be lower, primarily reflecting weaker prospects for some large emerging market economies and oil-exporting countries.
The Thai economy is projected to grow at 3.5% to 3.8% for the year 2015 as against a growth of 0.9% in 2014. Recovery is expected to be slower than previously estimated as a result of weaker domestic spending and stagnant exports.
VSF Industry
In the Viscose Staple Fibre (VSF) industry, the business environment continues to remain challenging, with
3% growth in consumption in 2014. VSF prices continued on a downward trend, declining 8% during 2014 (in 2013, prices had fallen by 14%).
This drop in prices resulted from excess capacity build up by leading players. Global capacity increased by 7% to 5.5 million tons against estimated consumption levels of 4.5 million tons in 2014. The Chinese VSF industry continued to grow capacity and has reached 3.4 million tons, thereby dominating the market and representing almost 65% of global capacity.
VSF prices were also impacted by lower cotton and polyester prices which were driven south by a steep drop in crude oil prices. Over capacity in upstream dissolving grade pulp industry also contributed to a bearish market in VSF prices. These developments have led to a significant change in the competitive landscape of the VSF industry.
Performance
The operations of your Company have been normal since the beginning of the financial year, having bounced back from the adverse impact of the four months labour strike during the previous year. Your Company’s operating and profitability performance for the year ended 31 March 2015 vis-a-vis the year 31 March 2014 is as indicated:
Total VSF sales volume (MT) 64% Total sales revenues (Baht Million) 49% Selling expenses (Baht Million) 71% Sales Revenue net of selling expenses (Baht Million) 48% Average selling price net of selling expenses (Baht/Kg) (9.8%) Cost of Goods sold (Baht Million) 46% Cost of goods sold (Baht/kg) (10.6%) Equity Income/(loss) (Baht Million) 297% Net profit/(loss) (Baht Million) (separate financial statements) 23% Net profit/(loss) (Baht Million) (consolidated financial statements) 40%
007
For the year ended 31 March
Particulars 2558 2557 % change
128,553 7,718
350 7,368 57.31 7,957 61.90 (424) (703) (1,357)
78,580 5,196 205 4,991 63.51 5,444 69.28 215 (570) (967)
ANNUAL REPORT 2016 THAI RAYON PUBLIC COMPANY LIMITED