I am pleased to present you the 57th Annual Report of Coromandel for the Financial Year 2018-19. In the year gone by the growth in the global economy was slightly lower at 3 percent, versus 3.1 percent in the previous year. Increased protectionism, geopolitical tensions, higher oil prices and tighter financial conditions moderated the growth especially during the second half of the year. Among developed economies, the United States maintained robust progress driven by private sector activity and sizable fiscal stimulus. The Indian economy continued to be the fastest growing large economy with 6.8 percent GDP growth in 2018-19,though there was a slowdown in the agriculture and manufacturing sectors.
As per the National Statistical Office (NSO) estimate, Agriculture sector''s Gross Value Added (GVA) for the year grew by 2.9 percent versus 5.0 percent a year ago. India received below normal and erratic South West monsoon (-9%) and deficit North East monsoon (-44%),which resulted in lower crop sowings. Despitethese challenges, the Indian farmers displayed a resilient performance and overall food grain and horticulture output is expected to be at previous year levels. With the structural reforms pursued by the Government towards improving agriculture infrastructure like irrigation projects, cold chains and national agriculture markets, we expect India''s agriculture growth trajectory to expand considerably in coming years. Further, initiatives like increasing Minimum Support Price (MSP) of crops to 1.5 times the cost of production, direct income support and direct benefit transfer introduced during the year, are expected to lend support to the farm income.
It was the first full year of implementation of Direct Benefit Transfer (DBT) in fertiliser. As we stand today, Indian fertiliser industry in collaboration with Department of Fertilizers can proudly claim to be amongst the early adopters of technology connecting the production, distribution and consumption cycles digitally, bringing transparency and reducing supply side volatility across the
system. DBT in its current form remains farmer-neutral. The price variability between various grades of fertilisers continues to distort the consumption pattern towards lower priced products, thereby leading to imbalanced nutritional practices. With time, the Soil Health Cards and land record data are likely to be integrated with the DBT system and subsidies will be passed directly to the beneficiary based on right nutrient usage.
The major raw material prices firmed up during the year due to demand-supply situation and global supply-side constraints. The rupee was volatile, mainly impacted by uncertainties around US-China trade negotiations and surge in oil prices. During the year, Government reduced the Goods and Services Tax (GST) rates on Phosphoric acid to 5 percent, correcting the inverted duty structure in the Fertiliser Industry.
Coromandel''s Performance Summary
During 18-19, Coromandel had a good all-round performance, as it continued its focus on customer engagement, introduced new products, improved operational efficiencies, strengthened the plant infrastructure and built people capabilities.
Nutrient businesses have progressed well during the year. In the Phosphatic fertiliser space, Coromandel has gained market share in the select geographies, improving its sales volumes by 10 percent. The integrated nutrient structure and agronomist teams continued to support the channel and farmer activation initiatives. Speciality nutrients worked on its focused product approach, and introduced crop specific products during the year. Single Super Phosphate (SSP) business built its quality interventions and has performed very well during the year. The Organic manure business sustained its leadership position and actively engaged with the Government and the farming community for improving soil health. Crop Protection business grew in both domestic and international markets with focus on introducing novel molecules in the segment. During the year, Bio Pesticide operations were successfully integrated with the Crop Protection Business, which
With the confluence of technology penetration and digital play, a younger workforce, and Government backed reforms, we are foreseeing the agriculture sector to grow significantly in the years to follow...
has enabled Business''s access to developed markets and provided a presence in complementary product segments. Retail has been testing out new technology interventions in crop diagnostics and delivery mechanism space, which are yielding promising results at the farmer''s end. The Business expanded its footprint in Maharashtra and strengthened its farm advisory, products and services offerings to support the farmers. Coromandel continued to focus on differentiated product approach and introduced ten new products across various businesses during the year.
To meet the future expectations and delivering superior crop solutions, Coromandel entered into a partnership with IIT Bombay-Monash University for carrying out research in new technology products. Further, the product development team in Crop Protection Business has been strengthened, with Research & Development, Technology Transfer, Business Development and Regulatory functions getting scaled up significantly.
Safety, Health and Environment continued to remain a high priority for Coromandel. Various measures were undertaken during the year focussing on health and building a safety culture across the organization. The Bird''s Paradise within the Kakinada plant continued to attract wide coverage and was well featured by the Discovery channel. Coromandel''s societal commitment remains strong and it continued to work in the areas of education, health and community development.
India has recently witnessed the world''s largest democratic exercise culminating into the formation of a stable government at the Centre. We expect the Government to continue its reform agenda, giving special focus on agriculture and rural prosperity. Further, with the confluence of technology penetration and digital play, a younger work force, and Government backed reforms, we are foreseeing the agriculture sector to grow significantly in the years to follow. To stay abreast with these changing trends, Coromandel is moving closer to the consumers and seeking unique opportunities to meet the farming needs. It is enhancing its manufacturing capabilities in the areas of upstream integration, new product development, pilot plants, and storage capabilities. Coromandel, with its integrated farm management solutions, will continue to create superior value for the farming community.
I would like to congratulate the Coromandel team for delivering good results under a challenging business environment, would like to conclude with thanking all our Board members for enlightening the leadership team with appropriate and timely guidance. I would also like to thank all our stakeholders - customers, vendors, creditors, bankers, regulatory bodies and above all our valued shareholders for their enduring trust and support.
Let us continue to work together for developing long term sustainable farming solutions and bringing prosperity to the farmers.