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Jul 12, 2012, 08.23 AM IST
In an interview with CNBC-TV18, Kapil Mehan, managing director, Coromandel International is optimistic about the government’s approval which will have retrospective effect from January 1, 2011.
Below is an edited transcript of the interview. Also watch the accompanying video.
Q: How much does the government approval of the freight agreement for distribution of P&K Fertilisers? Does this improve your margins in the near-term in Q1 since it comes with retrospective effect right from January?
A: The government's decision to issue a formal notification has been pending since January 1, 2011 and is applicable up to March 31, 2012. The freight already incurred is being reimbursed. So going forward, the freight will be a part of the cost structure. The approval helps to the extent that whatever is pending with the government will be received, now that the Cabinet has formally approved that proposal.
Q: What is the outstanding amount that will be reimbursed on this freight subsidy?
A: We will be able to present our bills to the government based on the notification which we are eagerly awaiting. Estimation will be possible only when the final details of the scheme are known.
Q: And this is applicable just up till March 2012. What happens from April 2012? Would you have new rates or is there a new policy in place now?
A: No. From April onwards, the policy mandates addition of the freight to cost and include it in our prices.
Q: Can you estimate how much you might get in terms of freight?
A: I think it may be in the range of about Rs 150-200 per tonne.
Q: In that case, what might be the amount you hope to make?
A: It is very difficult to estimate that. This is applicable only for movement by rail first and then secondary movement. The estimate needs a bit of fine-tuning. It would be wrong for me to state an estimate off-hand.
Q: Are you still looking at inorganic expansions after Sabero ? The company is often mentioned with respect to Mangalore Chemicals.
A: I don't know how the company's name is linked. We have gone on record that there is no link with respect to Mangalore Chemicals and maintain our stand. There are no discussions or talks of any kind.
But we are always on the look-out for various venues to make our facilities grow. As and when we are ready to share that information with outside world, we will.
Q: Since you are a well-run company on the look-out for opportunities, have you ever been approached by the Mangalore Chemicals group of companies which is desperately running short on cash?
A: No, we have not entered or initiated discussions of any kind.
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