Indian Farmers Fertiliser Cooperative Ltd (Iffco) has said that it would raise funds from its own resources for its expansion plans and oppose any move to privatise the fertiliser giant as suggested in a report of the working group of the ninth plan.
The working group had suggested that Iffco, along with Krishik Bharati Cooperative Ltd (Kribhco), should be partially privatised to enable them to raise funds from the capital market.
An Iffco official told Business Standard that the fertiliser giant would raise funds from its own resources for its expansion plans. We want Iffco to remain a cooperative and we do not want any public holding in the company, he said. In its report, the working group on fertilisers wanted that the partial privatisation of the share holding in these PSUs should be achieved at the earliest in order to raise the resources required for their modernisation, revamp, expansion and diversification.
The group suggested that Iffco and Kribhco should be granted dual status of `cooperative companies by making suitable amendments in Multi-state Cooperatives Societies Act, 1984, and The Companies Act, 1956, to enable these societies to raise funds from the capital market. A specific time frame could be evolved to carry out this task.
However, Iffco official pointed out that unlike some of the other PSUs, the fertiliser giant had been making profits for a long time. Hence, it did not face any financial constraints while implementing expansion and modernisation programmes.
The group had pointed out that even though shares of some of the PSUs Fertiliser and Chemicals Travancore Ltd (FACT), National Fertilisers Ltd (NFL) and Rashtriya Chemicals and Fertilisers Ltd (RCF) have been disinvested in different tranches since 1991-92, the government continues to hold more than 97 per cent of the shares in these companies.
The tardiness of the improvement in financial performance during the initial phase of stabilisation and adverse capital market conditions have constrained the buoyancy of the fertiliser PSU shares, it said, and hence public participation in ownership would also help in improving efficiency, management culture and accountability. The Iffco official said the cooperative has already received first stage clearance for expansion of the production capacity at Kandla unit at a cost of Rs 212 crore. The proposed plant is expected to increase the annual production capacity of the existing unit from 3.09 lakh MT of P2 O5 to 5.2 lakh MTA.
The society has also taken up the construction of liquid cargo jetty for unloading liquid raw material phosphoric acid and ammonia for the Kandla unit. Iffco is also constructing an additional ammonia storage capacity of 15,000 tonnes. Under its Vision 2000 plan, Iffco has taken upon the task of making itself the largest producer of fertilisers in the world, the official said. He also pointed out that production of DAP had touched a record level of 1,842 MT on a single day on August 14 against the previous high of 1,817 MT in May.
The department of fertilisers has nine public sector undertakings and two cooperative societies under its administrative control. While RCF, FACT, Madras Fertiliser Ltd and NFL and Iffco and Kribhco have been making profits, Hindustan Fertiliser Corporation and FCI have incurred losses since their inception. The governments holding in Iffco is around 80 per cent, in NFL it is 97.65 per cent, in RCF it is 92.52 per cent, in MFL it is 69.78 per cent while the rest is with National Iranian Oil Company.
