Murugappa group turns around Godavari Fert

Godavari Fertilisers and Chemicals Ltd, less than a year after being taken over by the Chennai-based $1.2 billion Murugappa group, has turned around and reported a profit before tax of Rs 10 crore on a turnover of Rs 887 crore.

The group has initiated expansion steps that will see the combined production of fertilisers between Coromandel Fertilisers Ltd and Godavari Fertilisers touch 3 million tonne from the present 2 million tonne. Coromandel itself reported revenues of Rs 1,222 crore and a profit before tax of Rs 71 crore for 2003-04.

A Vellayan, director (marketing), Murugappa group, at a media meet here today, said the route to profitability for Godavari Fertilisers lay in the quick synergies that were realised between the operations of Godavari Fertilisers and Coromandel.

"The most significant achievement was that market discipline in terms of pricing was arrived at. Both the companies are now operating without discounts being offered. Earlier discounts up to Rs 250 per tonne were being offered," Vellayan said.

This apart the companies also rationalised the fertiliser product mix between them and now certain products are being manufactured only at one of the plants, and not both, as was the case earlier.