115 CHAPTER - IV PROFILE OF SELECTED FERTILIZER COMPANIES IN GUJARAT 4.1 GUJARAT STATE FERTILIZERS AND CHEMICALS LIMITED 4.2 GUJARAT NARMADA VALLEY FERTILIZERS AND CHEMICALS LIMITED 4.3 INDIAN FARMERS FERTILIZER CO-OPERATIVE LIMITED 4.4 KRISHAK BHARTI CO-OPERATIVE LIMITED References
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115
CHAPTER - IV
PROFILE OF SELECTED FERTILIZER
COMPANIES IN GUJARAT
4.1 GUJARAT STATE FERTILIZERS AND
CHEMICALS LIMITED
4.2 GUJARAT NARMADA VALLEY FERTILIZERS
AND CHEMICALS LIMITED
4.3 INDIAN FARMERS FERTILIZER CO-OPERATIVE
LIMITED
4.4 KRISHAK BHARTI CO-OPERATIVE LIMITED
���� References
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4.1 GUJARAT STATE FERTILIZERS AND CHEMICALS
LIMITED
117
���� HISTORICAL BACKGROUND
The Birth of A Giant (1962-1972)
GSFC was incorporated in 1962 and its plants went into
production of fertilizers in 1967. In its very first decade of existence,
GSFC became known for its path-breaking achievements, to name a
few, it was the first industrial complex in the country set up in joint
sector, first company to set up fertilizer plants within a short span of two
years of getting requisite approvals, it was the first industrial project to
secure direct and active equity participation of farmers, the first fertilizer
unit FFto get assistance from IDBI's Assistance Fund, and the first
Company to adopt the Steam Naphtha Reforming process for
manufacture of Ammonia.
GSFC has set up the first DAP fertilizer complex in India at Sikka,
Jamnagar on the west coast of Gujarat. Its technical edge as well as
engineering resources acquired during its very first decade has been
catalysts in providing impetus to its expansion and diversification
strategies spread over the next four decades.
New Frontiers of Diversification (1972-2002)
Originally conceived and started as a Fertilizer company with an
objective of providing agricultural boost to the farmers in the State of
Gujarat and at the same time making Gujarat self-sufficient in fertilizers.
Visualizing the market pulse well in time, the Company, as a structured
diversification strategy, ventured into the foray of industrial chemicals
segment. Having this objective in mind, Company's integrated complex
at Vadodara has been so designed and structured that it shall be more
or less self sustained by using the by-products generated by its fertilizer
group of plants.
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GSFC was the first Company in India to establish a Caprolactam
plant in the year 1974. This was the apt time when Caprolactam was in
great demand mainly for the manufacture of downstream products like
nylon yarn, tyre cord etc. As a way forward, it led to expansion into
Nylon-6 production. GSFC was also the first to recover Argon gas from
purge gas, thus entering into the foray of industrial gases by making
Argon gas which is prominently used in welding and this was done way
back in the year 1981.
GSFC also has to its credit of setting up India's first Melamine
plant. The expansion and diversification of GSFC's product portfolio
unfolded new growth vistas to the nation by providing much needed
fertilizers for agricultural growth and the chemicals for industrial growth.
An Impressive Growth Story (2002-2014)
It is rightly said that you need to take one step backwards if you
want to stride forward and this adage equally applied to GSFC and the
phase between 1999-2002 was a phase of one step backwards which in
fact facilitated endless strides forward. GSFC never ever then looked
back. The period between 1999 to 2001 was a phase where it was
veering on the brink of a cash crunch. This phase of GSFC was
attributed to many reasons. To name a few are increased energy costs,
technical hiccups and delayed commissioning of new Ammonia plant
after a gestation period of eight years and resultant increased project
cost, excess outflow of interest etc. This new Ammonia plant continued
with technical snags which could stabilize only by end of 2003. The
liquidity problems further compounded due to expansion of DAP
capacity at Sikka (1999-2003) which required infusion of Rs. 180
Crores. The Government of India also recovered subsidy amounting to
Rs. 375 Crores. The drought during this period further depressed prices
and demand for all products. There was also a shortage of gas that
resulted into use of costly LSHS and Naphtha. The margins in
Melamine and Caprolactam, GSFC's blue chip products, were low in
this period due to depressed industrial demand internationally.
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The turnaround story of the Company began from FY 2003-2004.
Under able leadership and timely intervention of Hon. Chief Minister
Shri Narendra Modi in taking certain bold policy decisions, the company
could work on the strategies to enhance its productivity, bring down
costs through technical innovations and improved management
information systems. The revival measures were fully supported by
Govt. of Gujarat and the Company was given complete autonomy to roll
back to the track. Finally the major factors that brought company out of
red were improvement in the Operational Efficiency, Reducing Cost of
Sales, Regenerating Confidence in Suppliers & Customers, Moral
boosting of employees, strategizing foray in the global market,
consolidating through further Expansions, focusing on ideal product mix
to insulate performance from downtrends etc.
Govt. of Gujarat provided the proactive support to GSFC, which
brought out a scheme of deferred sales tax of an amount up to Rs. 45
Crores per year for five years, thus improving the Company's cash flow
position. Another important breakthrough was the increased availability
of natural gas in Gujarat, from GAIL, GSPC and Gujarat Gas, which
substituted costly Naphtha and LSHS.
All these measures finally resulted into GSFC becoming a
financially strong, profitable and stable Company. Coming out of
Corporate Debt Restructuring (CDR), GSFC approached the CDR Cell,
this time to accelerate the debt repayment. The debt, which was
scheduled to be completely paid by 2013, was re-paid in 2006. As a
step towards backward integration as well as a part of global trotting for
feed-stocks has participated in a joint venture in Tunisia viz. Tunisian
Indian Fertilizers S.A. (TIFFERT), this would ensure the consistent
supply 1, 80,000 TPA of additional Phosphoric Acid per annum required
for the production of DAP. GSFC has also acquired a strategic stake in
M/s Karnalyte Resources Incorporation in Canada. This secures
availability of Potash for the Company in long run.
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The Company during the period of past half decade has entered
the Second Green Revolution phase by developing alternative energy
generation facilities and initiating the spread of drip irrigation systems in
Gujarat. The Company has provided valuable services to farmers by
way of agricultural inputs and marketing support. Entering the second
green revolution, GSFC continued its role of encouraging agricultural
growth by developing and supplying Bio-Fertilizers and Bio-technology
products to the farmers under one roof. The Company has also
advanced Tissue Culture facilities to support horticulture and other
crops. In order to provide farmers with high-tech inputs, GSFC has
formed 100% subsidiary GSFC Agrotech Limited for research and
production of liquid bio-fertilizers, Plant Growth Promoters-Sardar Amin
Granules/liquid, Tissue culture and Seeds.
GSFC also promoted Gujarat Green Revolution Company Limited
(GGRC) to promote drip-irrigation and sprinkler irrigation systems
amongst farmers so as to optimize the usage of water and
implementation/monitoring the Government subsidy scheme in co-
ordination with GSFC. GSFC is also contemplating an investment outlay
of approx. Rs. 8,000 Crores for setting up an integrated fertilizer and
petrochemicals complex at Dahej.
���� VISION AND MISSION
Vision
GSFC’s vision is to efficiently produce an array of valuable,
superior and reliable products that enrich lives of millions in farms,
industries and homes. The Company envisions operating in synergy
with its environment and seeks to be recognized as an enterprise that is
for total customer satisfaction and creates credible long term value for
its stakeholders. Integrity and transparency remains the corner-stones
of Company's governance.
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Mission
GSFC’s mission of becoming a world-class, multi-product, eco-
friendly global company contributing to the nation as well as for the
welfare of society at large.
The Company seeks to enrich lives;
� Of customers by providing goods and services that add value to farm
enterprises, industries and homes.
� Of stakeholders by continuously adding value by managing
responsibly, sensibly and maintaining ethical standards of highest
quality.
� Of neighborhood community by working in synergy with its
environment and enriching the bio-diversity.
� Of employees by providing them a work environment that fosters
growth, learning, achievement, team work and a perfect work-life
balance.
���� MILESTONES AND ACHIEVEMENTS
The major achievements of the company during the able
leadership of Shri Narendra Modi, as Chief Minister can be summarized
as under:
���� GSFC could achieve consistent profitability record and it has
touched its highest profits during the period 2001-02 to 2012-13. Its
net profit touched ever highest level of Rs.759 Crores during 2011-
12 and the total profit after tax during 2001-02 to 2012-13 was
Rs.3594 Crores, as compared to total profit after tax of Rs. 1166
Crores earned during the period 1988-89 to 1999-2000.
���� Significantly, GSFC, which was under loss in the year 2001-02 and
2002-03 on account of various factors, not only turned around but
also earned its highest ever profit. Turn-over per share increased
from Rs.255/- to Rs.665/- per share.
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���� During this period, GSFC diversified into new chemicals like MEK-
Oxime and other raw materials such as Phosphoric Acid, Potassic
Acid, etc. It also diversified and increased significantly its Fertilizers
portfolio. Its Fertilizers manufacturing capacity today stands at 1.7
Million Tons. It also added significantly to its wind energy portfolio
which stands at over 150 MW. The total projects invested by GSFC
during the period of Hon’ble Chief Minister are Rs. 8340 Crores.
���� This performance of the company is brought out amply by
investments made by domestic institutional investors as well as
foreign institutional investors which stand at close to 40% of its total
paid up capital.
���� AWARDS
GSFC has won total 48 national and international awards during the