Indian Potash to diversify into sugar and ports

G. Srinivasan New Delhi | Updated on July 10, 2011

Dr P.S. Gahlaut, Managing Director, Indian Potash Ltd (file photo). – Kamal Narang   -  Business Line

The Rs 20,000-crore turnover Indian Potash Ltd (IPL) has chalked out plans to diversify into sugar manufacturing with its recent acquisition of two sugar mills from the Uttar Pradesh Government, besides eyeing into port-related projects.

Talking to Business Line here, the IPL Managing Director, Dr P.S. Gahlaut, said that “the plus point is lot of land and the minus point is very bad work culture. So we are giving voluntary retirement scheme to people and to get good professionals and start investing. As the process of change or make-over is complete, we will install power plants.”

Investment in power

Stating that power from sugarcane base is by far the cheapest and cleanest, he said the company would invest at least Rs 700-800 crore in the next four years to set up power plants. It is also much cheaper than from giant power plants coming up all over that are based on imported coal, he said, adding that capital expenditure per megawatt is the lowest in cane-based power plants as opposed to coal-fired plants.

Dr Gahluat contends that the company handles fertiliser shipments of more than three million tonnes a year at all the major and minor ports with the core competence of IPL being its excellent stevedoring, clearing and forwarding arrangement at all the ports, matching infrastructure of port godowns, mobile bagging plants at the shores and inland storage facilities at more than 500 strategic locations.

The company plans to consolidate these inherent strengths by developing port-related projects in its ongoing expansion plans, he added. The efficient management of the entire gamut of fertiliser ship-handling and distribution to domestic retail outlets through cooperatives continue to be the mainstay of the organisation that completed six decades last year, he said.

Cattle feed

Dr Gahlaut said in recent years, IPL has diversified into high quality cattle feed and set up a production unit at Sikandarabad in Bulandshahar district of Uttar Pradesh and IPL cattle feeds had improved the milch capacity, besides facilitating healthier calving.

With farmers seeking to overcome the problems inherent in agriculture and increase their income with rearing of livestock, IPL has taken this opportunity to lend its support to them by procuring milk from the village cooperatives through its ultra modern processing at its own plants so that the final products passes a host of tests to be hygienic and wholesome.

He said the company's dairy divisions sell three lakh litres of milk a day under “dairy fresh' logo and its cattle feed plants of 250 to 300 tonnes were being scaled up.

Potash holiday

Asked about the ‘potash holiday' declared by the authorities this year in the face of unrelenting spurt in the price of potash prices, Dr Gahlaut conceded that “it is unfortunate as things stand today. We have no reserves on our own and the problem is that we deal with just two big players from overseas—Russia and Canada for our total import requirements”.

He said the price prevailing overseas has no relationship to cost and if the supplier just like that hikes it by $100, there would be a $100 increase in the price of muriate of potash (MOP). He also voiced concern that if the ‘potash holiday' continues, the company's budgeted turnover of Rs 25,000 crore for the current fiscal would suffer a knock.

MMTC tie-up

To a specific query about IPL's recent alliance with MMTC in selling the latter's gold jewellery products through its vast distribution networks across the rural India, Dr Gahlaut said that the logic was inescapable in that as fast moving consumer goods (FMCG) industry had identified rural demands for beauty parlours and gems, IPL conceived the idea of selling gold and medallions of purity to farmers who had always been taken for a ride by goldsmiths of dubious nature foisting their wares on gullible rural households.

The move would help farmers during times of difficulties too since the gold and medallion they acquire in good times could be disposed of without loss of value as the MMTC brands of jewellery and medallions were hall-marked and trusted, he said.


Published on July 10, 2011

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