SRF Ltd. — Regulatory Filings 2021

Jan 22, 2021

The Corporate Relationship Department, BSE Limited Ist Floor , New Trading Ring Rotunda Building, P.J. Towers Dalal Street, Mumbai 400 001

National Stock Exchange of India Limited “Exchange Plaza” Bandra-Kurla Complex Bandra (E) Mumbai 400 051

Scrip Code- 503806

Scrip Code-SRF

SRF/SEC/BSE/NSE

22.01.2021

Dear Sir,

Presentation- Earnings Call (Un-Audited Financial Results for the quarter and nine months ended 31.12.2020)

In continuation of our letter dated 18[th] January, 2021 informing about hosting of earning call to discuss Un-Audited financial results for quarter and nine months ended 31[st] December, 2020, please find enclosed Investors presentation, of the same for your reference and record.

The same is also available on the Company’s website i.e. www.srf.com

Thanking you,

Yours faithfully,

For SRF LIMITED

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RAJAT LAKHANPAL VP (CORPORATE COMPLIANCE) & COMPANY SECRETARY

Encl: As above

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SRF Limited Q3 & 9M FY21 Results Presentation January 22, 2021

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Disclaimer

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Certain statements in this document may be forward-looking. Such statements are subject to certain risks and uncertainties like regulatory changes, local, political or economic developments, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn in any of the countries where SRF Limited has its manufacturing and / or commercial footprint.

SRF Limited may, from time to time, make additional written and oral forward-looking statements, including our reports to shareholders. The company will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

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Contents

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04 Q3 & 9M FY21 Results Overview

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13

Q3 & 9M FY21 Segmental Performance

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28 Company Overview

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29 Outlook

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Snapshot

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INR Cr Revenue 7,209 41% Chemicals 36% Packaging Films 19% Technical Textiles

Cr EBIDTA 1,507 Exports to 90+ Countries Operations in 4 Countries

916 Cr PAT 14 Manufacturing Plants Global Workforce 6,600+

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FY 20 numbers pertaining to continuing operations only Q3 & 9M FY21 Results Presentation | 4Q3 & 9M FY21 Results Presentation | 4
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Overview - Business Profile

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Revenue	2,975	2,603	1,353	278
EBIT	511	556	151	32
No of Plants	2	6	4	2
Specialty Chemicals • Intermediates for API / AI / Applications • Contract Manufacturing, Custom Research & Synthesis Fluorochemicals • Refrigerants • Pharma Propellants • Industrial Chemicals Chemicals Packaging Films Technical Textiles Others Films for Flexible Packaging • Bi-axially Oriented Polyethylene Terephthalate (BOPET) • Bi-axially Oriented Polypropylene (BOPP) • Tyre Cord Fabrics (Nylon & Polyester) • Belting Fabrics • Polyester Industrial Yarn • Coated Fabrics • Laminated Fabrics

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These numbers are based on FY20 results; pertaining to continuing operations only

Manufacturing Facilities

• FLUOROCHEMICALS & SPECIALTY CHEMICALS 2 National Operations 1. Rajasthan, India - Bhiwadi 2. Gujarat, India - Dahej

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TECHNICAL TEXTILES
1
4 National Operations 1
1. Madhya Pradesh, India - Malanpur, Bhind
2. Tamil Nadu, India - Manali
3. Gummidipoondi
1
4. Viralimalai
PACKAGING FILMS
3 National Operations 1 2
1. Uttarakhand, India- Kashipur 2 3
2. Madhya Pradesh, India - Special Economic Zone (SEZ),
3. Pithampur, Indore - Bagdoon, Pithampur, Indore
3 International Operations
4. KwaZulu - Natal, South Africa
5. Rayong, Thailand
6. Jaszfenyszaru, Hungary
3
2
1
4
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• LAMINATED FABRICS 1 National Operation 1. Uttarakhand, India - Kashipur

• COATED FABRICS 1 National Operation 1. Tamil Nadu, India -

• Gummidipoondi

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International Operations
4 5 6
South Africa Thailand Hungary
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Market Leadership Across Businesses

Speciality Chemicals

Fluorochemicals

Packaging Films

• Unique and fully integrated facilities extending across a wide range of refrigerants and industrial chemicals

• Recognized for expertise in developing, manufacturing and marketing innovative, superior film products

• Established relationship with marquee customers

• Capability in scaling up pilot processes and creating value through operational excellence

• Domestic leadership in HFC’s with strong trade distribution network; significant market share of Fluorochemicals in India with global scale operations

• Flexible business model, strong and loyal customer relationships with tailored solutions; NPD Lab to ensure future readiness

• High levels of customer engagement backed by strong R&D, technical service, product and quality management under one roof

  • Highly efficient asset base offering value added products in close proximity to customer locations

• One of the few global manufacturers for Pharma grade 134a/P - propellant in metered dose inhalers

• Handling complex reactions - halogenation, ethylation, hydrogenation, nitration, diazotization, grignard, isomerization, amination, organocatalysis, and decarboxylation

• Among the top five global manufacturers for key Fluorochemicals products

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Technical Textiles

• Domestic market leader in Tyre Cord manufacturing and Belting Fabrics

• 40% share in India’s Nylon Tyre Cord market. 2[nd] largest player globally

• 3[rd] largest manufacturer of Conveyor Belting Fabrics in the world

Q3 & 9M FY21 Results Presentation | 7

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Q3 & 9M FY21 RESULTS OVERVIEW

Abridged Results Overview - Consolidated

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Consolidated figures

Particulars (Rs. Cr)	Q3 FY21	Q3 FY20	% Y-o-Y	9M FY21	9M FY20	% Y-o-Y
Gross Operating Revenue	2,146.4	1,850.5	16.0%	5,792.4	5,351.6	8.2%
EBITDA	566.3	395.7	43.1%	1,540.6	1,112.8	38.4%
EBITDA Margin (%)	26.4%	21.4%	-	26.6%	20.8%	-
Depreciation	116.6	101.9	14.4%	334.6	287.2	16.5%
Interest	28.5	47.5	-40.1%	107.8	154.1	-30.0%
ECF (Gain) / Loss	(21.5)	(12.7)	68.7%	(2.8)	(23.6)	-88.1%
Profit Before Tax	442.8	259.1	70.9%	1,101.0	695.1	58.4%
Profit After Tax	324.2	345.5	-6.1%	816.8	721.7	13.2%
Profit After Tax Margin (%)	15.1%	18.7%	-	14.1%	13.5%	-
Diluted EPS (Rs.)	55.01	60.10	-8.5%	140.91	125.56	12.2%

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Figures pertaining to continuing operations only

Results Overview - Financial Overview

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Consolidated figures

Key Financial Ratios

PARTICULARS	FY13	FY14	FY15	FY16	FY17	FY18	FY19	FY20
EBITDA Margin	17.59%	13.59%	20.43%	22.13%	21.42%	17.69%	19.00%	20.90%
PAT Margin	6.69%	4.04%	8.78%	9.51%	10.87%	8.38%	8.33%	12.70%
Net Debt to Equity	0.71	1.01	0.99	0.73	0.67	0.82	0.83	0.75
Net Debt to EBITDA	2.06	3.78	2.82	1.96	2.07	3.00	2.54	2.47
Asset Turnover	0.82	0.73	0.77	0.7	0.68	0.66	0.72	0.66
Debtors Turnover	7.44	5.81	7.43	8.79	7.21	8.1	6.90	8.09

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Results Overview - Revenue & EBIT

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Consolidated figures

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REVENUES (Rs. Crore)
Q3 FY20 Q3 FY21
CB PFB TTB OTHERS TOTAL
9M FY20 9M FY21
CB PFB TTB OTHERS TOTAL
811.9 905.9 802.0 1,854.8 2,148.7
638.2
367.0
335.7 73.8
69.1
5,798.4
2,492.3 2,312.2 5,357.0
2,093.1 2,002.5
1,040.8 839.5 220.7
154.4
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EBIT (Rs. Crore)
Q3 FY20 Q3FY21
CB PFB TTB OTHERS TOTAL
9M FY20 9M FY21
CB PFB TTB OTHERS TOTAL
189.9 212.4 478.5
143.1 149.4 337.2
67.9
36.5 8.3 8.3
679.3 1,253.2
452.9
424.9 918.2
352.6
114.3 104.1 26.5 16.8
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CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others

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Results Overview - Revenue Share

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Q3 FY21 3.4%
17.1%
37.3%
42.2%
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9M FY21 2.7%
14.5%
39.9%
43.0%
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Q3 FY20 3.7%
18.1%
34.4%
43.8% CB
PFB
TTB
9M FY20 Others
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9M FY20
4.1%
19.4%
37.4%
39.1%
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CB – Chemicals Business; PFB - Packaging Films Business; TTB – Technical Textiles Business; Others

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Q3 & 9M FY21 SEGMENTAL OVERVIEW

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Packaging
Chemicals
Films
Technical
Others
Textiles
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Chemicals Business

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Chemicals Business - Results Update

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Consolidated figures

PARTICULARS (Rs. Cr)	Q3 FY21	Q3 FY20	% SHIFT	9M FY21	9M FY20	% SHIFT
Segment Revenues	905.9	811.9	11.6%	2,492.3	2,093.1	19.1%
% Contribution to Revenues	42.2%	43.8%		43.0%	39.1%
EBIT	189.9	143.1	32.8%	452.9	352.6	28.5%
% EBIT Margins	21.0%	17.6%		18.2%	16.8%
% Contribution to EBIT	39.7%	42.4%		36.1%	38.4%

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Chemicals Business

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Specialty Chemicals Business

• The segment delivered a strong performance during the quarter owing to:

• Robust demand from the overseas markets

• Higher capacity utilization of dedicated / multipurpose facilities

o Strong pipeline of new products and keeping the funnel full

• SRF was awarded the ‘Syngenta Supplier Award 2020 for Performance’ at Syngenta Global Suppliers Meet

Market Trends

• Global agrochemical market is expected to continue to experience moderate growth

• India is being largely viewed as a promising alternate destination to China for sourcing fine and specialty intermediates in both Agro and Pharma segments

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Chemicals Business

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Chemicals Technology Group

• Chemicals Technology Group (CTG) is actively engaged in the development of new process technologies

• Key focus on high end molecules

• Strong internal competencies and capabilities

• Equipped with state-of-the-art R&D facilities and an ingenious team of scientists and engineers

• 2 R&D centres in India

• 3 new process patents were granted in Q3FY21, taking the tally to 83 global patents to-date. Overall, the Company has applied for 298 patents

83 298 Global Patents Patents applied granted

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Chemicals Business

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Fluorochemicals Business

• The segment reported a better performance driven by enhanced sales volumes of refrigerants in domestic and export markets and

• healthy contribution from the chloromethanes segment

  • Witnessing a revival in demand from both automobile and AC segments

  • Overall production of refrigerants on an uptrend

  • Chloromethane capex proceeding as per schedule

Market Trends

• Sales volumes from passenger vehicles in India higher by 10% over CPLY and on YTD basis it was lower by 25% than last year

• AC market demand picked up from Nov’20 onwards with increase in AC production volumes

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Packaging Films Business

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Packaging
Films
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Packaging Films Business - Results Update

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Consolidated figures

PARTICULARS (Rs. Cr)	Q3 FY21	Q3 FY20	% SHIFT	9M FY21	9M FY20	% SHIFT
Segment Revenues	802.0	638.2	25.7%	2,312.2	2,002.5	15.5%
% Contribution to Revenues	37.3%	34.4%		39.9%	37.4%
EBIT	212.4	149.4	42.2%	679.3	424.9	59.9%
% EBIT Margins	26.5%	23.4%		29.4%	21.2%
% Contribution to EBIT	44.4%	44.3%		54.2%	46.3%

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Packaging Films Business

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Key Highlights

o The business performed exceedingly well due to:

• Over CPLY BOPET and BOPP segments witnessed robust performance due to better operating leverage, improved margins, and a healthy demand from customers

• New capacities in Thailand and Hungary aided further volume growth

• Focus on direct end-customer engagement, quality & timely delivery, enhancing operational efficiencies, & increasing proportion of value-added products contributed to the overall performance

o Successfully commissioned the Thailand resin plant despite limited availability of OEMs experts

• With the Hungary Greenfield facility now commissioned, the team continues to focus on its ‘Easy To Do Business With’ philosophy by coming closer to its customer base in Europe. The line is expected to ramp up in next few months with healthy demand anticipated from existing and prospective customers

Market Trends

• In Q3FY21, demand for PET and PP remained soft; Q-o-Q margins under pressure

• Global industry witnessed addition of 1 BOPET and 1 BOPP line during the quarter

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Technical Textiles Business

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Technical
Textiles
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Technical Textiles Business - Results Update

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Consolidated figures

PARTICULARS (Rs. Cr)	Q3 FY21	Q3 FY20	% SHIFT	9M FY21	9M FY20	% SHIFT
Segment Revenues	367.0	335.7	9.3%	839.5	1,040.8	-19.3%
% Contribution to Revenues	17.1%	18.1%		14.5%	19.4%
EBIT	67.9	36.5	86.1%	104.1	114.3	-8.9%
% EBIT Margins	18.5%	10.9%		12.4%	11.0%
% Contribution to EBIT	14.2%	10.8%		8.3%	12.4%

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Technical Textiles Business

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Key Highlights

• Improving market dynamics enabled the segment to deliver healthy performance

• This was mainly due to faster-than-expected recovery in the Tyre industry

• Continued focus on initiatives to enhance operational performance

• The business continues to garner high ratings from audits conducted by key domestic tyre manufacturers / customers

• The Belting Fabrics segment contributed significantly to the overall performance of the Technical Textiles Business

Market Trends

• With a pickup in the economy, replacement demand is anticipated to be healthy in the ensuing quarters

• Tendency of buyers to prefer domestic supplies in these uncertain times leading to sharp reduction in imports

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Others

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Others

Others - Results Update

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Consolidated figures

PARTICULARS (Rs. Cr)	Q3 FY21	Q3 FY20	% SHIFT	9M FY21	9M FY20	% SHIFT
Segment Revenues	73.8	69.1	6.9%	154.4	220.7	-30.0%
% Contribution to Revenues	3.4%	3.7%		2.7%	4.1%
EBIT	8.3	8.3	-	16.8	26.5	-36.5%
% EBIT Margins	11.2%	12.0%		10.9%	12.0%
% Contribution to EBIT	1.7%	2.5%		1.3%	2.9%

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Others - Key Highlights

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Coated Fabrics

• Amidst sluggish demand, domestic market leadership holds steady both in terms of price and volume via improved procurement and plant performance

• Increase in raw materials costs pose near-term challenges to margin performance

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Laminated Fabrics

• Products from the Company’s semi hot and hot lamination segments were well-received in the market and reported a healthy uptick in volumes

• Oversupply situation persists, leading to pressure in margins

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COMPANY OVERVIEW

Overview Growth Levers

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Build a Company known and respected for its R&D capabilities

Focus on building leadership businesses

Build and maintain market leadership in business segments

Nurture innovation through R&D Reposition portfolio towards knowledgebased products

Focus on building knowledge-based value-added products Continue to build new competencies in the chemical technology space

Drive growth in new businesses De-risk from Technical Textiles Business

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OUTLOOK

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Outlook - Chemicals Business

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• Demand for Spec Chems to remain robust, continued traction with existing and new customers

• Commercialization of new products remains on track

• Complex chemicals and specialty products to remain key growth drivers

• Capex plans under implementation, being executed timely

• Refrigerant gas prices showing an upward trend globally

• Initial signs that domestic demand for refrigerants is also picking up

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Outlook - Packaging Films Business

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• The business will focus on sales from ramp up

• newly commissioned capacities in Thailand and Hungary. However, in short term, there will be supply overhang in BOPET & BOPP, which may lead to softening of margins

• Focus on increasing pace of R&D efforts, sustainability initiatives, efficient cost structures, enhanced capabilities and value-added products

• BOPP capex in Thailand on track

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Outlook - Technical Textiles Business

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• Post lockdown, there has been a faster than expected recovery in the tyre market, leading to a very healthy order book

• New yarn capacity expected to be commissioned by early Feb 21

• Capacity debottlenecking across various plants to assist higher operating leverage and higher output

• Other sub-segments of Technical Textiles Business expected to remain stable

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Our Community Engagement

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• Established InnoSTEAM Labs in three Govt. Senior Secondary Schools of Gurugram to promote the future skills of students

• Launched the ‘IBM Artificial Intelligence (AI) Program’ in 173 CBSE Schools and 13 State Govt. Schools of Haryana

• Employees of TTB Gummidipoondi made financial contributions to buy gifts, sanitizers, and face masks for the children of a nearby orphanage

• Within the ambit of the ‘Care & Share’ initiative, the employees of TTB Manali contributed funds to buy gifts and essential items for children suffering from cancer

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About Us

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Established in 1970, SRF Limited with an annual turnover of ₹7,062 crore (US$ 942 million) is a chemical based multi-business entity engaged in the manufacturing of industrial and specialty intermediates. The company’s diversified business portfolio covers Fluorochemicals, Specialty Chemicals, Packaging Films, Technical Textiles and Coated and Laminated Fabrics. Anchored by a strong workforce of close to 7,000 employees from different nationalities working across eleven manufacturing plants in India and one each in Thailand, South Africa and Hungary, the company exports to more than 75 countries. Equipped with State-of-the-Art R&D facilities, SRF has filed 298 patents for R&D and technology so far, of which 83 have been granted. A winner of the prestigious Deming Prize for two of its businesses namely Tyre Cord and Chemicals, SRF continues to redefine its work and corporate culture with TQM as its management way.

For further information please contact

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Anoop Poojari / Karl Kolah

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CDR India Tel: +91 98330 90434 / +91 98330 10478 Email: anoop@cdr-india.com / karl@cdr-india.com

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