The Hindu Business Line : Godavari Fertilisers expansion under study

The feasibility of expanding the capacity of the Godavari Fertilisers and Chemicals plant here is under study and the report is likely to be submitted in a few months, according to Mr K.A Nair, Managing Director.

At a press meet here on Monday, Mr Nair said currently the plant was producing over a million tonnes and the plan for the current financial year envisaged production of 11 lakh tonnes.

"The installed capacity of the plant is only 8-9 lakh tonnes, but we have stretched it to the point of crossing a million tonnes. As there is great demand for Godavari DAP and other fertilisers in Andhra Pradesh and other States, we are seriously considering expansion. A decision will be taken after the submission of the report," he said.

Mr Nair said that ever since Godavari Fertilisers and Chemicals had been taken over by the Murugappa group, it had shown remarkable improvement. During 2005-06, the company earned Rs 42.03 crore of profit before tax and declared dividend of 20 per cent.

The company achieved record sales of Rs 1,520 crore in comparison with the previous year's Rs 1,200 crore.

During 2005-06, the company and the fertiliser industry in general had faced difficulties on account of delay in release of subsidy and "non-recognition of increase in input costs while computing subsidy," he said. "The Government still owed the company Rs 376 crore in the form of subsidy, and for the industry as a whole it amounted to Rs 6,000 crore," he said.

Monsoon forecast

Referring to the coming year, Mr Nair said the monsoon forecasts were encouraging, "but the Government has still not finalised the fertiliser policy which lapsed by April 1.

Pending finalisation of the policy, the industry has not been able to sign phosphoric acid contracts."

He expressed apprehension that if there were any further delay in formulating the policy, fertiliser production may be affected and imports may become necessary.

"Last year, we imported 23 lakh tonnes of DAP. This year, contracts have already been signed for 6 lakh tonnes. When we have the capacity to produce 74 lakh tonnes of DAP in the country, why should we import?"