Indo Gulf Fertilisers Limited, an Aditya Birla Group Company, has posted an impressive performance for the quarter ended 30th September, 2005. The Company attained a turnover of Rs. 213.98 Crores and net profit of Rs. 22.48 Crores up by 39% over the corresponding quarter of the previous year.

Urea sales at 3.48 lacs MT is marginally higher against 3.39 Lac MT. The Company produced 2.46 Lacs MT of Urea, reflecting 113% capacity utilization resulting from almost full on-stream days operation. The availability of gas including Regassified Liquefied Natural Gas though overall satisfactory, was marginally lower than the requirement. The Company could achieve higher profitability due to its continuous focus on operational efficiencies and better price realization, on the back of the strong brand equity of Birla Shaktiman.

Birla Shaktiman’s excellent brand equity is yielding good dividends. The Company’s commitment to adding value to the farmers continues relentlessly. Its innovative six sigma approach to farmlands, the Neem-Coated Urea “Krishi Dev” have collectively enhanced farm yields in excess of 15% to 20%. In the process “Birla Shaktiman” has gained greater ground.

The farmers’ response to “Krishi Dev” Urea continues to be extremely good. In view of its increasing demand, the sale of Neem Coated Urea was 27% of the total Urea sale during the Kharif season as against 18% in the corresponding period last year. To enhance the productivity of farm lands through promoting the balanced use of micro-nutrients through value added urea, Indo Gulf has also developed Zincated Urea. Field trials are on to evaluate the benefits of Zincated Urea, which will be launched in the near future.

The Company is continuing its endeavors with the concerned Govt. departments to rectify the anomaly in the new Pricing Policy resultant from the heterogeneity in Group formation of Pre- 92 gas based units. Under the new Pricing Policy (effective 1st April, 2003), the Government has clubbed both landlocked and landfall Fertiliser Units. Unlike landfall units, landlocked units like Indo Gulf have to bear significantly higher transport cost for Natural Gas. The Policy therefore does not offer a level playing field, since it averages the pricing in line with the Group Concession Scheme. Indo Gulf is constantly following up with the Government to correct this aberration at the earliest.

To review the effectiveness of Stage–I and Stage-II of NPS and to formulate a policy for Urea units for Stage–III commencing 01.04.2006, a Working Group has been constituted under the Chairmanship of Dr. Y. K. Alagh. Indo Gulf looks forward to its positive outcome.

The Board of Directors of the Company, in its meeting held on 11th September, 2005 have approved a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956 (the “Scheme”) for the amalgamation of the Company with Indian Rayon And Industries Limited (“IRIL”). The appointed date for the Scheme is 1st September, 2005. Upon the effectiveness of the Scheme and in accordance with the terms thereof, IRIL will issue and allot to such of the shareholders of the Company as on the Record Date (to be determined in terms of the Scheme) its equity shares in the ratio of one fully paid equity share of Rs.10/- each for every three fully paid equity shares held in the Company.

The Scheme has been filed with the High Court of Judicature at Allahabad, Lucknow Bench, Lucknow on 17th October, 2005 by the Company. IRIL has also filed the Scheme with the High Court of Gujarat at Ahmedabad on 5th October, 2005. As directed by the Hon'ble High Courts, meetings of the shareholders of the Company and IRIL will be held on 28th November, 2005 and 16th November, 2005 respectively to consider the Scheme. Pending approvals of the shareholders and the respective High Courts, and the effectiveness of the Scheme, no effect has been given in the above financial results for the proposed amalgamation under the Scheme.

OUTLOOK

Given the favourable weather conditions, the demand for fertilizer during Rabi 05-06 season is expected to be buoyant. This augurs well for the Company.

The Company’s application to the Government for debottlenecking of its urea capacity from 2620 MTPD to 3360 MTPD is pending clearance. Submitted in April 2004, the Company is pursuing with the Government for its expeditious approval and is hopeful of getting the same in the near future.

Sourced From : Aditya Birla Management Corporation Ltd