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Fert firms dither in sharing their experiences under environ licensing raj

Nov 20: The Fertilizer companies appear to be hesitant in putting on record their experience in securing environmental clearance from the Ministry of Environment and Forest.
8This is evident from Department of Fertilizes’ (DOF’s) reminder to all companies to submit their experiences as well as suggestions for simplifying procedures for environmental clearances
In a letter to all P&K and SSP companies, DOF has recalled its earlier missive dated 15th October 2014 on this subject and stated: “the requisite comments in the matter are still awaited.”
8The Letter adds: “you are once again requested to submit your comments/views in the matter up to 30.11.2014 for further examination.”
8As reported earlier, DOF had requested companies to report any specific instances of delay or harassment either by MOEF or by State Department of Environment or State Pollution Control Board.
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MFL's financial restructuring becomes uncertain

Nov 20: Madras Fertilizers Limited’s (MFL’s) financial restructuring is becoming uncertain if the disclosure made by the company in the footnotes to its Q2 results is any indication.
8In the footnotes, MFL says: “BIFR at its hearing held on 19.09.2013 directed the company and Govt. of India to expedite revival of the company within a period of three months. Next hearing, earlier scheduled on 13.01.2014, 19.03.2014, 16.06.2014 and 14.08.2014, has been postponed and the revised date of hearing is yet to be announced.”
8The company increased its net profit to Rs 23.61 crore in Q2 (July-September 2014) of current financial year from Rs 17.17 crore in the corresponding period of previous year.
8The company also increased its net sales to Rs 695.21 crore from Rs659.08 crore. This modest improvement in performance was achieved in spite of 24-days shut-down of complex fertilizers plant and 2-days shut-down of urea plant during the latest Q2.

Modi Govt gives G20 commitment to unleash urea reforms

Nov 19: The NDA Government has expressed its resolve to undertake urea reforms at the G20 forum.
8It has included this ticklish issue in the first key commitment listed in the Comprehensive Growth Strategy: India’ (CGS). This report was presented at the G20 Leaders Summit that concluded in Brisbane on 16th November.
8Under the sub-heading ‘Macroeconomic Policy Response’, CGS says, “Fiscal sustainability by ensuring predictable and stable tax regime (with measures for reduced litigation and dispute resolution) and expenditure reforms (updating urea subsidy and setting expenditure management commission), and financial stability by formulating appropriate monetary policy framework.”
8It affirms: “new urea policy would also be formulated.” It has, however, not specified any timeline for announcement of the proposed policy.

CIL to drive its sales with enhanced focus on customized fertilizers

Nov 18: Coromandel International Limited (CIL) would continue with its strategy to provide customized fertilizers to farmers as this has helped the farmers as well as increased its market share.
8The transcript of a recent conference call with investment analysts has quoted CIL Managing Director Kapil Mehan as saying: “As we have shared earlier our strategy is to give products which are suitable for farmers requirement and we formulate these products in different combination of NP&K. Of course, there are constraints of the fertilizer control order but we try to match the different needs, different farmer requirement, and different cropping pattern. So our stated strategy is to have products which are more customized to the farmers’ requirements and complex fertilizers are definitely more suited to farmers’ customized requirement as opposed to DAP.”
8He continued: “We keep promoting, and educating the farmers on use of complex fertilizers because they give better returns to the farmer; it helps us to improve our production rate also in the plant is the second benefit. So it is not entirely driven by higher margin or lower margin but basically we want to build our ‘Gromor’ brand which has very large and strong franchise amongst the farmers and that is what we would like to strengthen.”
8He added: “Coromandel is known as a complex fertilizer company and we
would like to build that position more and more and make it more stronger and you will be happy to note that this year we manage to increase our market share of complex from almost 24%-25% to 29% level. And that is our strategy and we will continue to drive that. So it is a part of a larger strategy than a response to a short term hiccups of phos acid availability or margin requirements.”

Decline in urea consumption a positive sign: CIL

Nov 18: Coromandel International Limited (CIL) believes the imbalanced urea consumption pattern has perhaps started showing signs of correction without any policy intervention.
8At recent conference call with investment analysts, CIL Managing Director Kapil Mehan observed that the fertilizer market also has grown during the first six months of this year. The DAP sales has grown by 14.7% from 3.230 million tonnes to 3.705 million tonnes. Import is down by about half million tonnes from 2.49 tonnes to 1.94 million tonnes. With the result the closing stock with the industry as on end of September is pretty low at around 3 lakh tonnes. As regards complex fertilizers, import is down from 0.233 million tonnes last year to 0.202 million tonnes this year whereas production is up from 3.17 million tonnes to 3.47 million tonnes. And sales is up by 19% from 3.09 million tonnes to 3.68 million tonnes. MOP sales have also grown by 28.4% from 1.1 million tons to 1.41 million tonnes and SSP has grown by about 8.6% from 1.84 million tonnes to almost 2 million tonnes.
8He said: “Similarly if we look at urea sales, and that is a bit of a surprising number because sale is actually down 7.3% and that possibly is explained by the fact that farmers are now concerned about balanced fertilization and are not enamored only by price to apply more urea but they are also scientifically making sure that they give balanced nutrition to their crops. So I think that at least from a macro data perspective it is showing a positive sign. We have also seen in our interactions with the farmers that they are more careful about applying complexes as well as potash fertilizers; they are diversifying their fertilizer use so that there is no overdependence on one nutrient or the other.”
8He added: “So overall if we see the segments that we operate in, the sales have grown quite significantly and that is as per expectation because in my last call also we had indicated the sales will show increases primarily because the pipeline inventory is now coming to normal levels; fresh demand will be met through fresh sales and that is what has happened through the quarter as well as through the first half of the year.”

NFCL's Q2 net loss soars due to non-supply of gas

Nov 17: Nagarjuna Fertilizers and Chemicals Limited (NFCL) has suffered higher net loss in the second quarter of current financial year due to about two-month plant shut-down due to non-supply of gas.
8The net loss shot up to Rs 102.85 crore in Q2 (July-September 2014) from Rs 46.17 crore in the corresponding period of previous year. The net sales plummeted to Rs 458.34 crore from Rs 1122.56 crore.
8In the footnotes to the results, NFCL said: “Consequent to the blast in gas pipeline of GAIL on June 27, 2014, the plants were shut down due to non supply of Gas. In view of non supply of Gas and also lower supply of Gas during the quarter the Company has incurred losses due to lower production and sales. The plants commenced production in a phased manner from 16th August 2014.”

Global urea & DAP prices settle in placid zone

Nov 17: Global prices of both urea and diammonium phosphate (DAP) have largely remained stable or subdued in the recent weeks.
According to Agrium Inc?s latest Crop Input Market Report released on 12th November, ?Global urea prices have been relatively stable in recent weeks. Outside of strong demand from India and Pakistan, spot market demand has been relatively quiet. Delayed U.S. harvest and strong Q3 import demand has led to relatively slow demand in the U.S. market, but there have been some signs of activity picking up in recent days. Seasonal demand is expected to pick up in the near future in Europe, and due to tight supplies in North Africa, European buyers have been looking to the Arab Gulf region for supplies.?
8It says: ?Similar to the urea market, spot market activity outside of India has been relatively slow, resulting in lower global phosphate prices over the past month. Producers have responded to the slow demand, building inventories and relatively high raw material costs by cutting back on production.?

MCFL enhances its Q2 net profit by 351.32%

Nov 14: Mangalore Chemicals & Fertilizers Limited (MCFL) has boosted its net profit by 351.32 % to Rs 42.56 crore in the second quarter (July-September 2014) of current financial year from Rs 9.43 crore in the corresponding period of preceding year.
8The company achieved this jump in profitability in spite of decline in net sales to Rs 1196.73 crore from Rs 1221.07 crore. The net profit would have been lower had the company not revised the useful value of fixed assets.
8In the footnotes to the results, MCFL says: “The Company has revised the useful life of its fixed assets to comply with the useful life in accordance with Schedule II of the Companies Act, 2013. As per the transition provision, the Company has adjusted Rs 2.03 core (net of deferred tax of Rs 1.04 crore) in the opening balances of retained earnings. If the Company had continued to follow the earlier useful life, the depreciation expense for the period would have been higher and profit before tax would have been lower by Rs 3.25 crore, the net block of fixed assets would have been higher by Rs 0.18 crore.”
8MCFL manufactures urea, diammonium phosphate, NPK complex fertilizers, sulphuric acid and ammonium bicarbonate at Mangalore.

RCF boosts its Q2 net profit by 93.63 %

Nov 14: Rashtriya Chemicals and Fertilisers Limited (RCF) has improved its net profit by 93.63 % to Rs 77.53 crore in the second quarter (July-September 2014) of current financial year from Rs 40.04 crore in the corresponding period of preceding year.
8The company increased its sales income to Rs 2204.77 crore from Rs 1815.24 crore. The company’s all segments/divisions performed better, thereby helping the company to record robust growth in both the topline and the bottomline.
8RCF’s both production complexes at Trombay and Thal as well as its trading business achieved handsome increase in their respective profit before interest and tax (PBIT).

DSL's urea business & NBS segment boost their respective Q2profit

Nov 13: DCM Shriram Limited’s (DSL) urea business has boosts its profit before interest and tax (PBIT) by 84.2% to Rs 5.5 crore in second quarter (July-September 2014) of current financial year from Rs 3.0 crore in the corresponding period of previous year.
8The company increased urea sales by 20.5% to Rs 175 crore from Rs 145.2 crore. The company has identified its urea manufacturing business as fertilizer business in the results.
In a presentation, the company says: “Better profitability on account of increase in reimbursement towards conversion costs under NPS III w.e.f. April 1 2014. However, the increase does not fully compensate the cost increases since FY03.”
8As for urea outlook, it points out that earnings in H2 of 2014-15 will get impacted by planned maintenance shutdown in Q4 FY15. It adds: “Subsidy outstanding expected to rise in second half of the year. Increase in domestic gas prices will add to the higher subsidy outstanding.”
8DSL’s NBS fertilizers-driven farm solutions business enhanced its PBIT by 11.9% to Rs 27.3 crore from Rs 24.4 crore. It suffered 33.5% decline in its sales to Rs 438.9 crore from Rs 658.8 crore.
8The presentation says: “Revenues down primarily due to lower sales of DAP / MOP, in line with the plan to optimise bulk fertilisers, as required to support sales of ‘Value-added inputs’. Growth in Value-added inputs’ slowed due to weak monsoons. Overall profitability improved on account of better margins in bulk fertilizers business.
8As for Farm Solutions’ business outlook, the presentation says that this segment would “focus on expanding the higher margin ‘Value Added inputs’ portfolio and reach, while optimizing the bulk offerings. High subsidy outstanding in Bulk is an area of concern.”

NFL further improves its profitability post plants revamp

Nov 13: National Fertilizers Limited (NFL) has earned net profit of Rs 61.75 crore in the second quarter (July-September 2014) of current financial year, as compared to net loss to Rs 25.90 crore in the corresponding period of previous year.
8The further improvement in the turnaround, which started in Q1, was facilitated by increase in net sales to Rs 2322.45 crore from Rs 2011.23 crore.
8The company thus continues to consolidate its performance following stabilization of operations of plants on completion of feedstock changeover and energy efficiency projects in 2013.
8NFL had embarked on turnaround with a net profit of Rs 18.02 crore in Q1 2014-15.

EntABNL's urea business boosts its Q2 operating profit following debottlenecking

Nov 12: Aditya Birla Nuvo Limited’s (ABNL’s) Indo Gulf Fertilisers (IGF) division has boosted both its sales and operating profit during the second quarter (July-September 2014) of current financial year.
8IGF increased its earnings before interest and tax (EBIT)/operating profit to Rs 63 crore in Q2 of 2014-15 from Rs 40 crore in the corresponding period of preceding year. It improved urea sales to Rs705 crore from Rs 591 crore.
8The company has clubbed urea with marketing of outsourced fertilizers and other crop inputs under the heading agri-business. The sales of all other products excluding urea inched up to Rs 74 crore from Rs 73 crore.
8It enhanced the volume of urea sales to 310,000 tonnes from Rs 298,000 tonnes.
8In its presentation on its Q2 performance, the company disclosed that “Debottlenecking & Energy Savings project led to increased urea production & improved energy efficiency.”
8The presentation says: “Net debt reduction led by realisation of subsidy in Agri business coupled with operating cash flows Outstanding subsidy & receivables reduced to Rs 656 Cr. (PQ: Rs 1,066 Cr., Mar’14 : Rs 1,176 Cr., PY: Rs 828 Cr.).”

Nov 12: RCF solicits offers for a simulator for sulphuric acid plant   Details
Nov 11: SIPCOT to house fertilizer units in Tuticorin industrial park   Details
Nov 11: CPCB unveils norms for online effluents monitoring by fert & other industries   Details
Nov 10: RCF & BPCL to jointly promote a mega sewage treatment plant   Details
Nov 10: TCL enhances its Q2 fertilizers profit by 31.49%   Details
Nov 7: CFCL's fertilizers segment boosts its Q2 profit by 34.26%   Details
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