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Suresh P. Iyengar

Mumbai, Nov. 12 Aries Agro, a speciality fertiliser manufacturing company, has deferred the launch of a new production unit at Panvel in the outskirts of Mumbai to March from the earlier schedule of December.

The company has cited the slowdown in demand for crop nutrients as the reason for deferring the commissioning of the new plant with an annual capacity of 10,000 tonnes.

Mr Rahul Mirchandani, Executive Director, Aries Agro, said expansion plans has been postponed as the company currently has an installed capacity of 84,600 tonnes against the expected offtake of 50,000 tonnes this season.

“Given the current scenario, it makes more sense to postpone the project for the next crop season. Moreover, the project cost may come down with an expected fall in lease rent,” he added.

The drop in demand for plant nutrients was felt more in cereal crops such wheat, rice and pulses than in cash crops such as fruits and vegetables. Cereal crops are mainly dependent on minimum support prices (MSP) announced by the Government, while prices of other commodities are driven by the demand and supply.

Though the Government has increased MSP of many crops recently, farmers were not able to afford plant nutrients, while in the horticulture segment prices of fruits and vegetables had risen substantially yielding better returns to farmers.

Aries Agro manufactures more than 35 products and prominent brands among them are Agromin, Chelamin, Chelacal, Chelamag, Macrofert and Fertimax.

Aries Agro derives 75 per cent of its revenue from horticulture segment and 25 per cent from cereal crop. The company raised product prices twice to offset higher raw material costs, which rose by a third this year, he said.

Input cost has, on an average, gone up 10-15 per cent, while it was high at 200 per cent in some metals such as zinc, sulphur etc, said Mr Mirchandani.

With the drop in demand, the company has revised its projected sales growth downward to 25-30 per cent from the earlier target of 30 per cent.

A new unit with a production capacity of 10,800 tonnes per annum recently went on stream in Lucknow.

Production of soluble fertiliser at the Mapco Fertilizers, UAE – a subsidiary of Aries Agro – will also be delayed by two months to February 2009.

Golden Harvest Middle East FZC, a subsidiary of Aries Agro is expected record a sales turnover of Rs 10 crore in FY’09.

More Stories on : New Projects | Pesticides

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