Hyderabad-based Coromandel International Limited, the country’s second largest phosphatic fertiliser player, is planning to invest over Rs 500 crore in the next couple of years to ramp up its production capacity to 4 million tonnes from the present 3.25 million tonnes.
This includes a Rs 116 crore greenfield 800-tonne per day single super phosphate plant to be set up in Punjab, according to A Vellayan, chairman of Coromandel International. The board, which met here yesterday, has approved the proposal among other decisions. The company is planning to pump in about Rs 350 crore more in the expansion of Kakinada plant that is already under way, he said.
The new plant is expected to be completed in two years.
Addressing a press conference in connection with the quarterly results here on Wednesday, Vellayan said the company was poised to acquire new assets and enter joint ventures for sourcing raw materials abroad to further increase the fertiliser production in the country. While the prices of raw materials had gone up 30-40 per cent, fertiliser demand across the globe was buoyant and unaffected by the present global economic turmoil, he said.
India solely depends on import of raw materials used in phosphatic fertilisers and gaining access to more overseas assets in this area is a key to increase fertiliser production in the country. The 10-11 per cent dip witnessed in the consumption of phosphatic fertilisers during the current kharif season was only due to the nonavailability of the supplies even as urea consumption grew 10 per cent, according to him.
Coromandel has joint ventures and long-term agreements for supply of raw material in several countries including South Africa, Israel,Tunisia, Togo, Japan and Canada.
Among the new business initiatives, the company has launched a paddy transplantation service on a pilot basis in Andhra Pradesh. It sees big business opportunity in farm automation in the face of increasing shortage for agriculture labour in rural areas. It had transplanted paddy in 8,000 acres last year and plans to cover 20,000 acres this year.
Coromandel sees a Rs 10,000-crore business opportunity in paddy transplantation along with sugarcane harvesting, according to Kapil Mehan, managing director of the company.
By ramping up businesses in non-fertiliser agriculture inputs, including pesticides and services, the company aims to increase its non-subsidy business to 50 per cent of the total turnover from the present 28 per cent. It also plans to increase the retail outlets of its brands to 1,000 from 423 now by expanding into Karnataka and Maharashtra. It also planning to ramp up organic manure production by recycling city-based waste to 250,000 tonnes next year from 120,000 tonnes.
The Murugappa group company was incorporated in 1961 and launched its operations in 1964 by starting its first fertiliser plant in Visakhapatnam. The group brought all its other subsidiaries in agriculture inputs business under the umbrella of Coromandel International subsequently. “ We prefer to grow 60 per cent organically and 40 per cent inorganically. So we are open to value buying,” Vellayan said while responding to a question on acquisitions.
The company had recently proposed to acquire 31 per cent equity shares of Sabero Organics Gujarat Limited and was awaiting Securities and Exchange Board of India (Sebi)'s approval.
