Liberty Phosphate eyes capacity expansion in UP by 2010

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Liberty Phosphate eyes capacity expansion in UP by 2010

Good monsoons saw Liberty Phosphate rallying on better than expected dispatches crossing 316,000 tonne of material in the first half of the year. The managing director of the company RR Dhanani, in an interview with CNBC-TV18 said the company has further expansion plans which will help increase their revenues by 2012.

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Good monsoons saw Liberty Phosphate rallying on better than expected dispatches crossing 316,000 tonne of material in the first half of the year. The managing director of the company RR Dhanani, in an interview with CNBC-TV18 also said the company has further expansion plans which will help increase their revenues by 2012.

"We are putting up a plant in Uttar Pradesh, which is about 132,000 tonne. The land has been acquired and we are going for a term loan also with our existing banker," he said.

Below is a verbatim transcript of RR Dhanani's interview with CNBC-TV18's Ekta Batra and Reema Tendulkar. Also watch the accompanying video.

Q: This time around we have had a really strong monsoon. What's the kind of dispatches that the company has seen?

A: The company has already made about 316,000 tonne of material which has been dispatched till September, which is half-yearly, against the target of 430,000 tonne.

Q: There was a bit of a dip in your month on month prices for rock phosphate and sulphur. How exactly are the two input prices doing hence your realizations?

A: Right now both the prices are stable for this quarter and the realization has improved because of this demand. Even our bottomline has also improved.

Q: Any FY11 targets you would be working with because you had said Rs 375 crore is what you would do in FY11. Could you up that, to probably Rs 400 crore plus because of the volume growth and realizations you have been seeing?

A: Yes definitely. We have increased the target for this year.

Q: Can you give us a figure on your FY11 targets then?

A: The figure is about Rs 398 crore of the turnover and in terms of profitability we are looking at Rs 30 crore. Out of this, for the first half of this year, we have already achieved about Rs 17 crore.

Q: Any sort of capacity expansion which you would be undergoing to increase capacity because of increased amount?

A: We are putting up a plant in Uttar Pradesh, which is about 132,000 tonne. The land has been acquired and we are going for a term loan also with our existing banker.

Q: How will this help in terms of your revenues for FY12?

A: For FY12 we are looking at about Rs 500 crore of turnover and bottomline at over Rs 50 crore. That's doubling because we will be utilizing our existing capacity better.

Q: I am not sure if you already are into Urea but what have you made of the possible gyrations doing the rounds regarding possibly new investment policy for Urea? Would you think of increasing capacity within that segment at all?

A: Not in the nearby future. We may look at it in 2013 but not immediately because we are in the first year of stabilization. So we will need more time to stabilize.

Q: How is the nutrient base subsidy (NBS) panning out in terms of complex fertilizers?

A: Till today everything is going on well. The government has already committed to extending this policy till March 2011. So there are no changes being made by the government.