Kakinada-based Godavari Fertilisers and Chemicals Limited (GFCL), now owned by the Murugappa group, is looking for possible joint ventures outside the country for input manufacturing. |
The increasing costs of inputs such as ammonia and phosphoric acid in the international market have made the group to look for long-term solutions such as this. |
Addressing a press conference here on Monday, K A Nair, president and whole time director of GFCL, strongly made his case for either the subsidy hike or the increase of fertiliser prices by the Union government to withstand the input costs. |
"Due to the above factors, the DAP (diammonium phosphate) production in the country till September was only 76 per cent of the target," he said, while cautioning a possible shortage of fertilisers on account of reduced production in the future. |
"Godavari suffered only 20 per cent loss of input supply of phosphoric acid, when compared to around 40 per cent loss of input supply to other companies. This was mainly due to the long-term arrangements that we have with companies such as GTCL of Tunisia and Fosker of South Africa," Nair said. |
According to him, the ammonia prices have gone up from $168 per tonne to $317 per tonne between April and September this year. Similarly, phosphoric acid prices spurted by 13 per cent over the same period. |
As the international prices of inputs shooting up, he said that the Centre should either increase the subsidy levels offered to the companies or hike the retail price of the end products. |
GFCL's profits in the first half of the current fiscal were very marginal due to the increased input costs, he said. "We may look at joint ventures in those countries where we already have long-term arrangements with companies," he said referring to GTCL and Fosker, who have a five per cent stake each in GFCL. |
Despite constraints in the supply situation of raw materials, GFCL has taken steps to produce and supply DAP and other NPK (nitrogen, phosphorus and potassium) grades in all the districts of the state, according to G Ravi Prasad, vice-president (marketing). |
As compared to the total requirement of 2.25 lakh tonnes of DAP for the current rabi season in the state, GFCL is planning to supply 1.56 lakh tonnes "" nearly 69 per cent of the state's requirement. |
Another cause for concern for both the company and the state, according to Nair, was the changing trend of fertiliser usage with lesser phosphatic content. According to the figures, the NPK ration has changed from 6.5:3:1 in 1999-2000 to 4.75:1.97:1 in the last kharif season. |
"With the farmers facing three successive drought years, their purchasing power has come down making them go in for low priced fertilisers. We are taking up a campaign called 'Project-P' to encourage the usage of phosphatic fertilisers. Reduction in fertiliser usage in general is attributed to the drought situation besides the changed cropping patterns in the state with paddy cultivation coming down from 40.14 lakh hectares in 1999-2000 to 27.41 lakh hectares in 2003.04. Yet, due to the improved rainfall conditions and other governmental support to the agriculture sector, the just concluded kharif season has seen an increased usage of fertilisers in the state. Accordingly, GFCL supplied 1.53 lakh tonnes of DAP in the state during the recent kharif season, as compared to 1.39 lakh tonnes supply during the kharif-2003," he said. |