Excerpts from CNBC-TV18’s exclusive interview with Vellayan: 

Q: How it could it benefit a player like you; the changes which have come in with the potash and phosphatics side, particularly the new regulations for imports that have come in yesterday? 

A: Overall this new policy on phosphatics is welcomed. This is because of the following reasons - it is market related, it’s linked to international Di-Ammonium Phosphate (DAP). Also, it’s long-term and realistic. Moreover, it’s farmer-friendly in terms of nutrient and it does give a better possibility for long-term investments overseas in raw material areas. So, overall although the policy has been delayed for about three months, we have gone through all the features in the policy and it’s very positive.    

Q: Could you explain or illustrate with some examples how it could benefit a company like you particularly on the imported price front and how you can access some of these imports at prices that are more competitive to enable it to ripe higher profits? 

A: There are two aspects. First, in terms of availability; because of the bio-fuel boom world over, availability is a great problem and since the policy is linked to international DAP it affords the Indian manufacturer, the ability to buy at market related prices. Second feature is the 65:35 ratio, where there is an incentive for the domestic manufacture to source cheaper and the benefit of that 65% is left with the manufacturer and the government mopes 35% up. Both these are welcomed features. 

Q: How many fertiliser companies have the ability to source cheaper inputs like that and whether this indeed was the change in prices that you were asking for? 

A: 60% of the industry in phosphatics should be able to take advantage of this. There is a section of the phosphatics industry that is not well off financially, and they still have cash flow problems. But those companies that are liquid and those which have engaged in long-term tie-ups should benefit from this policy.