The Hindu Business Line : Madras Fertilizers to restart NPK production

Chennai, Sept. 9 Madras Fertilizers Ltd plans to re-commence manufacture of complex fertilisers, which could have a significant impact on the company’s business volume, once the plan is implemented.

MFL has a capacity to manufacture over 8 lakh tonnes of complex fertilisers annually but it had drastically cut back on production a few years ago because of raw material (phosphoric acid) and financial constraints. In the last two years, it utilised just about 5 per cent of its NPK production capacity.

Addressing the company’s annual general meeting here today, Mr S. Muralidharan, MFL’s Chairman and Managing Director, said that the Department of Fertilisers is urging the company to restart manufacture of complex fertilisers.

This would mean that the company’s business volume will quadruple over that of 2007-08 when its turnover was Rs 1,140.06 crore.

When contacted by Business Line, Mr Muralidharan, while declining to discuss the financial aspects, said that MFL was looking at manufacturing various combinations of NPK fertilisers.

Adverse pricing

It may be recalled that the prevailing fertiliser pricing policy has been adverse to the company resulting in the company losing money on every tonne of fertiliser it manufactures and sells in the market.

According to the company’s annual report, the adverse pricing policy has resulted in an under-recovery of more than Rs 500 crore in the last six years.

As of 2007-08, when the company was registered with the BIFR, its accumulated losses were close to Rs 650 crore.

MFL has lost over Rs 59.44 crore between 2002-03 and 2007-08 under the price concession scheme governing complex fertilisers.

Under the new pricing scheme for urea introduced in 2003, MFL suffered further loss of Rs 455.86 crore between 2003 and 2008.

Addressing shareholders, Mr Muralidharan said that the Government of India is keen that MFL restart manufacture at the NPK plant and the company is likely to recommence production soon.

The agencies and the authorities concerned are supporting the company.

According to industry sources, there is a shortage of complex and phosphatic fertilisers in the market.

Therefore, the Government wants to utilise the existing production capacities to cater to the market.

Related Stories:
Madras Fertilizer submits recast plan to Govt

More Stories on : Outlook | Fertilisers

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page