It is
rightly said that you need to take one step
backwards if you want to stride forward and this
adage equally applied to GSFC and the phase
between 1999-2002 was a phase of one step
backwards which in fact facilitated endless
strides forward. GSFC never ever then looked
back. The period between 1999 to 2001 was a
phase where it was veering on the brink of a
cash crunch. This phase of GSFC was attributed
to many reasons. To name a few are increased
energy costs, technical hiccups and delayed
commissioning of new Ammonia plant after a
gestation period of eight years and resultant
increased project cost, excess outflow of
interest etc. This new Ammonia plant continued
with technical snags which could stabilise only
by end of 2003. The liquidity problems further
compounded due to expansion of DAP capacity at
Sikka (1999-2003) which required infusion of Rs.
180 Crores. The Government of India also
recovered subsidy amounting to Rs. 375 Crores.
The drought during this period further depressed
prices and demand for all products. There was
also a shortage of gas that resulted into use of
costly LSHS and Naphtha. The margins in Melamine
and Caprolactam, GSFC's blue chip products, were
low in this period due to depressed industrial
demand internationally.
The
turnaround story of the Company began from FY
2003-2004. Under able leadership and timely
intervention of then Hon. Chief Minister Shri
Narendra Modi in taking certain bold
policy decisions, the company could work on the
strategies to enhance its productivity, bring
down costs through technical innovations and
improved management information systems. The
revival measures were fully supported by Govt.
of Gujarat and the Company was given complete
autonomy to roll back to the track. Finally the
major factors that brought company out of red
were improvement in the Operational Efficiency,
Reducing Cost of Sales, Regenerating Confidence
in Suppliers & Customers, Moral boosting of
employees, strategizing foray in the global
market, consolidating through further
Expansions, focusing on ideal product mix to
insulate performance from downtrends etc.
Govt. of
Gujarat provided the proactive support to GSFC,
which brought out a scheme of deferred sales tax
of an amount up to Rs. 45 Crores per year for
five years, thus improving the Company's cash
flow position. Another important breakthrough
was the increased availability of natural gas in
Gujarat, from GAIL, GSPC and Gujarat Gas, which
substituted costly Naphtha and LSHS.
All these
measures finally resulted into GSFC becoming a
financially strong, profitable and stable
Company. Coming out of Corporate Debt
Restructuring (CDR), GSFC approached the CDR
Cell, this time to accelerate the debt
repayment. The debt, which was scheduled to be
completely paid by 2013, was re-paid in 2006.
As a step
towards backward integration as well as a part
of global trotting for feed-stocks has
participated in a joint venture in Tunisia viz.
Tunisian Indian Fertilizers S.A. (TIFFERT), this
would ensure the consistent supply 1, 80,000 TPA
of additional Phosphoric Acid per annum required
for the production of DAP. GSFC has also
acquired a strategic stake in M/s Karnalyte
Resources Incorporation in Canada. This secures
availability of Potash for the Company in long
run.
The
Company during the period of past half decade
has entered the Second Green Revolution phase by
developing alternative energy generation
facilities and initiating the spread of drip
irrigation systems in Gujarat. The Company has
provided valuable services to farmers by way of
agricultural inputs and marketing support.
Entering
the second green revolution, GSFC continued its
role of encouraging agricultural growth by
developing and supplying Bio-Fertilizers and
Bio-technology products to the farmers under one
roof. The Company has also advanced Tissue
Culture facilities to support horticulture and
other crops. In order to provide farmers with
high-tech inputs, GSFC has formed 100%
subsidiary GSFC Agrotech Limited for research
and production of liquid bio-fertilizers, Plant
Growth Promoters-Sardar Amin Granules/liquid,
Tissue culture and Seeds.
GSFC also
promoted Gujarat Green Revolution Company
Limited (GGRC) to promote drip-irrigation and
sprinkler irrigation systems amongst farmers so
as to optimize the usage of water and
implementation/monitoring the Government subsidy
scheme in co-ordination with GSFC.
GSFC is
also contemplating an investment outlay of
approx. Rs. 8,000 Crores for setting up an
integrated fertilizer and petrochemicals complex
at Dahej.
The major
achievements of the company during the able
leadership of Shri Narendra Modi, as Chief
Minister can be summarised below:
-
GSFC could achieve consistent
profitability record and it has touched its
highest profits during the period 2001-02 to
2012-13. Its net profit touched ever highest
level of Rs.759
Crores during 2011-12 and the total
profit after tax during 2001-02 to 2012-13 was
Rs.3594
Crores, as compared to total profit
after tax of Rs.
1166 Crores earned during the period
1988-89 to 1999-2000.
-
Significantly, GSFC, which
was under loss in the year 2001-02 and 2002-03
on account of various factors, not only turned
around but also earned its highest ever profit.
Turn-over per share increased from Rs.255/- to Rs.665/-
per share.
-
During this period, GSFC
diversified into new chemicals like MEK-Oxime
and other raw materials such as Phosphoric Acid,
Potassic Acid, etc. It also diversified and
increased significantly its Fertilizers
portfolio. Its Fertilizers manufacturing
capacity today stands at 1.7 Million Tons. It
also added significantly to its wind energy
portfolio which stands at over 150 MW. The total
projects invested by GSFC during the period of
Hon'ble Chief Minister is Rs. 8340 Crores.
-
This performance of the
company is brought out amply by investments made
by domestic
institutional investors as well as foreign
institutional investors which stands at close to
40% of its total paid up capital.
All these
steps are in line with GSFC's mission of
becoming a world-class, multi-product,
eco-friendly global company contributing to the
nation as well as for the welfare of society at
large. |