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CIL makes significant savings by changing its borrowings strategy

August 20: Coromandel International Limited (CIL) has reduced its finance charges significantly by shifting borrowings from hard currency to the Rupee.
8At recent conference call on with investment analysts, CIL Chief Financial Officer S.Sankarasubramainan explained: “We have slightly shifted our strategy in terms of foreign exchange exposure with a fully hedged cost being costlier, we shifted to rupee borrowings. When we take a dollar borrowing, the dollar interest rate alone gets grouped under the financing cost and the premiums are grouped under other expenditure. If you see our other expenditure, has shown a significant drop basically because our premiums have come down almost by Rs.22-23 crores.”
8He continued: “Since we shifted from dollar borrowing to rupee borrowing, our total interest burden gets booked into financing cost. In terms of cash flow, there is an improvement and debt is at the same level of fourth quarter. But due to the shift in borrowing mix from dollar to rupee there has been an impact on the reported interest charges.”
8Asked whether the company any plan for further expansion or whether it is looking for merger and acquisition (M&A) in the current financial year, CIL Managing Director Kapil Mehan said: “See, M&A acquisition is a very much part of our growth strategy and if you look at our history, we have grown through this. So this is very much part of our strategy to grow inorganically, but as you would appreciate that we cannot discuss these things prematurely. We constantly keep evaluating opportunities in space around agriculture and agriculture inputs. As and when there is a strategic fit, there is a value creating opportunity we do get in, but I cannot put any timeline to it or I cannot give more details on that.”
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TCL positioning itself as branded solutions entity in agri & consumer space

August 19: In its platinum jubilee year, Tata Chemicals Limited (TCL) is transforming itself as a “branded solutions company in the agri business and retail consumer space” from being a leader in the Inorganic Industrial Chemicals segment.
8In its annual report for 2013-14, TCL explains: “Within the Agri business space, bulk fertilisers like urea, Di-ammonium Phosphate (DAP) and NPK are regulated commodities and are therefore, dependent on subsidy payments. This is the reason the Company is moving towards branded and specialty agricultural products. The Company’s TKS (Tata Kisan Sansar) network comprises 957 stores and continues to grow through greater farmer connect. The network provides products and solutions under one roof, along with value-added advisory services that benefit farmers. The Company’s subsidiaries Rallis and Metahelix are also playing a significant role in the transformation process.”
8It says: “The focus, going forward, will be to adopt technology as a differentiator, to invest in high-tech products such as specialty fertilisers, herbicides, weedicides and high-grade seeds. TCL (including its subsidiaries Rallis and Metahelix) is continuing to strengthen its deep engagement with the Indian farming community.
8It adds: “Nutritional Solutions, the new business line that the Company developed from its Innovation Centre, is expecting to start commercial production for its first product called Fructooligosaccharide (FOS) soon. This is an outcome of the Company’s continued focus and investments in technology that will continue
to be the driver for growth through differentiated products and offerings, many of which are already in the pipeline.”
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TCL voices concern over adverse policy framework urea self-sufficiency

August 19: Tata Chemicals Limited (TCL) has voiced concern over the unfavourable business environment for urea business and imbalanced application of nutrients to crops.
8According to the Company's annual report for 2013-14, “Given that the gas prices are slated to increase in FY 2014-15, the domestic production over “cut off ” levels may see some reduction if the international prices do not prove to be supportive.”
8The Report observes: “The New Investment Policy 2012 for urea has been tweaked during the year and may undergo further changes with the functioning of the Government. The policy, as it stands today, is not attractive enough to invest in the expansion of urea capacity. The Government announced an increase in the fixed cost subsidy for existing urea plants, effective for FY 2014-15. The fixed cost considered is now moving closer to the actual expenses incurred by the companies.”
8As regards customised fertilizers, the report says: “The Company has so far registered four grades for major crops like paddy, wheat, potato and sugarcane for Western U.P. Although the product has received a favourable response from farmers, with respect to the convenience of use, increased yield, as well as the improved quality of the produce, sales have been low, due to the drastic increase in the prices of decontrolled fertilizers and initial hesitation in adopting a new fertiliser application practice. The Company is continuing its eff orts in popularizing the product by targeting select clusters and conducting focused awareness-building activities in those areas. In the case of sugarcane grade, the Company is trying to popularise the products by involving sugar mills in the process.”
8The report notes that the key concern for FY 2014-15 would be the impact of El Nino conditions on the monsoon, which is currently predicted at 95% of the long period average. This could see some shift in the cropping patterns. Another concern involves the insuffi cient subsidy allocation, which will lead to high arrears of subsidy. The Government intends to monitor the farmer prices (MRP) even in the decontrolled segments. In addition, the caution displayed by the manufacturers and importers may adversely impact the availability of fertilisers whenever prices are strengthening. The dis-proportionate use of nitrogen and its impact on balanced nutrition continues to remain a concern; the current NPK balance in soil has deteriorated to 8.7:3.4:1.
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MMTC solicits offers for urea supply in September

August 18: 8MMTC Limited has invited tenders for import of 20,000 quantity of urea for arrival at Indian port by first half of September 2014.
8The prospective suppliers have the flexibility to offer prilled urea in bulk or in bags. While specifying the packaging format, MMTC has, stated: "Buyer holds the right to decide the final form of packaging."
8The last date for submission of bids is 21st August.
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PPL expected to complete debottlenecking & CPP during Q4 2014-15

August 18: Paradeep Phosphates Limited (PPL) is bracing to complete its debottlenecking project and captive power plant during the fourth quarter of current financial year.
8While revising its outlook on the company’s rating on long-term debt to stable from negative, ICRA says: "the company is expected to complete its debottlenecking projects and captive power plant during Q4 FY15 (delayed to some extent due to cyclone during October 2013, although significant cost overruns are not expected), which should help improve the cost structure further."
8The Rs 715-crore project would help PPL increase its production capacity for diammonium phosphate, NPK complex fertilizer as well as for sulphuric acid & phosphoric acid at Paradeep plant in Odisha.
8According to an ICRA release, PPL has been short-listed for a US$ 1.2 billion ammonia-urea complex in Tanzania. In case the company is awarded the project, it may result in a significant commitment in terms of capital and technical requirements. Since there is no clarity regarding the award of the project and possible financial implications, ICRA has not factored in the same while reaffirming the rating.
8PPL is currently among the top few integrated DAP plants in India with an installed annual capacity of 0.72 million metric tonnes per annum (MMTPA) of DAP / NPK complex fertilisers, 0.225 MMTPA of phosphoric acid and 0.66 MMTPA of sulphuric acid. Actual production of DAP / NPK fertilisers has remained higher than the installed capacity over the past few years due to initiation of several operational improvement and debottlenecking projects by the management.
8The company has also scaled up trading operations of various P&K fertilisers, pesticides and agro-chemicals, etc. in recent years.
It says: "The revision in outlook on the long-term rating reflects the improvement in financial performance in H1 CY14 (revenues of Rs. 2038 crore, EBITDA of Rs. 124 crore and net profit of Rs. 46 crore) post substantial losses (net loss of Rs. 173 crore) in 9m FY14."
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NFL eyes potash extraction from underground brine water in Kutch

August 14: National Fertilizers Limited (NFL) has embarked on research and development (R&D) for production of potassic fertilizers to reduce the county’s total dependence on imported potash.
8According to the Company's annual report for 2013-14, NFL is undertaking R&D study to explore possibility for production of Sulphate of Potash/ Murate of Potash.
8The Report says: NFL has "tied up with CSMCRI, Bhawnagar for a R&D study in regard to possible production of SoP/MoP from underground brine obtained from HSL Salt Works, Rann of Kutch.”
8Under a separate , the company is considering increasing the product variant of Bio Fertilizer by launching Potash Soluble strains in addition to the existing strains.
8NFL currently producing “three types of Bio Fertilizers in both Powder and Liquid base i.e. Rhizobium, Azectobactor and PSB. To increase the shelf life of Bio Fertilizers, NFL is gradually shifting from Powder Bio Fertilizers to Liquid Bio Fertilizers. This has resulted in less use of Lignite, which is used as a carrier for Powder Bio Fertilizer. This has also resulted in lesser use of Natural resources.”
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RCF mulls 'leasing' of its phosphogypsum derivatives plant

August 14: Rashtriya Chemicals and Fertilisers Limited (RCF) intends to offer its phosphogypsum-derived building products plant at Trombay to a suitable company on operate, maintain and market (OMM) contract basis for initial period of five years.
 8RCF would retain the ownership of the facility named 'Rapidwall plant'. It would charge the contractor for supply of phosogypsum. The contractor would also pay fixed contract fee to RCF. The company has stipulated that “the Bidder shall produce and market the products under the trade name 'Rapidwall'.”
 8To begin with, RCF has invited expression of interest (EOI) from competent firms for the proposed contract. After short-listing the most suitable from the applicants, the company would work out the detailed modalities of the contract and incorporate them in the notice inviting tenders.
 8Commissioned in 2010, the plant is based on technology provided by Australia's Rapidwall Building Systems Pty. Ltd. The plant is equipped to manufacture Rapidwall panels, wall putty and wall plaster.
 8The panels can be used for walling as well as for flooring/roofing in combination with RCC as a composite material. RCF has constructed a demonstration building in its factory premises using Rapidwall panels. Panels can be cut to specific sizes as per the customer's requirements.
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NFL turns corner in first quarter of 2014-15

August 13: National Fertilizers Limited (NFL) has earned net profit of Rs 18.02 crore in the first quarter (April-June 2014) of current financial year, as compared to net loss to Rs 77.03 crore in the corresponding period of previous year.
8The turnaround was facilitated by increase in net sales to Rs 2160.99 crore from Rs 1549.31 crore following stabilization of operations of plants on completion of feedstock changeover and energy efficiency projects in 2013.
8NFL had recorded lower sales and posted net loss in the first quarter of last financial year due to projects-related shutdown of three plants for varying period.
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ABNL's agri business boosts its Q1 profit by 30%

August 13: Aditya Birla Nuvo Limited’s (ABNL’s) agri-business has enhanced its profit (EBDITA) by 30% to Rs 26 crore in the first quarter (April-June 2014) of current financial year from Rs 20 crore in the corresponding period of preceding year.
8In a presentation on its Q1 results, the multi-sector giant said: “EBITDA is higher at Rs 26 Cr. led by energy savings and higher fixed cost reimbursement as per Government policy.”
8The agribusiness’ sales grew by 16% to Rs 564 crore from Rs 487 crore with trading revenue rising to Rs 89 crore from Rs 56 crore. The agri-business, whose lion’s share is accounted for by urea manufacturing, includes marketing of outsourced fertilizers, pesticides and seeds.
8The presentation says: “Urea sales de-grew by 7% due to plant breakdown / shutdown for 15 days as against 9 days breakdown in Q1 last year.”
8It adds: “Outstanding subsidy & receivables reduced q-o-q from Rs 1,176 Cr. in Mar’14 to Rs 1,066 Cr. in Jun’14 (PY: Rs 1,105 Cr.).”
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BRPSE moots additional compensation for FACT for using RLNG

August 12: The Board for Reconstruction of Public Sector Enterprises (BRPSE) has advised Government to grant of additional compensation to Fertilisers and Chemicals Travancore Limited (FACT) for use imported gas as feedstock.
8The Minister of State for Chemicals and Fertilizers Nihal Chand informed Lok Sabha on Tuesday that “BRPSE at its meeting held on 20.12.2013 have recommended a financial relief to FACT which includes infusion of fresh funds, waiver of GOI loans & interests, grant of additional compensation for use of LNG etc. The recommendation of the BRPSE is under the consideration of Department of Fertilizers for seeking the approval of Cabinet.”
8He said that FACT has submitted a proposal to the Government for release of fund for renovation of its fertilizer plants during the current financial year.
8Replying to another part of the same question, Mr. Chand said that under New Urea Investment Policy 2008, sixteen units have undertaken revamp which has resulted in production of around 20 lakh metric tonne of urea per annum.
8He added: “The Government had notified the New Investment Policy (NIP)-2012 on 2nd January, 2012 to facilitate fresh investment in urea sector in future to reduce India’s import dependency in urea production. Under NIP-2012, the energy norms of new projects will be recognized at 5 Gcal/MT, which is comparable to the best urea units around the world.”
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NFL eyes petroleum coke as alternative feedstock

August 11: National Fertilizers Limited (NFL) is studying the prospects of dual feedstock mode at its fertiliser plants at Panipat, Bathinda and Nangal units that have recently switched over gas from fuel oil under its Ammonia Feedstock Changeover Project (AFCP).
8The company is exploring the scope for gasification of petroleum coke at the front-end sections of these plants that have become redundant after the completion of AFCP in 2013. The redundant equipment include gasifiers might be used to produce synthesis gas from petcoke thereby making it alternative cheaper feedstock.
8According to NFL’s annual report for2013-14, “Considering non-availability of domestic gas and steep increase in price of RLNG, Company is examining the feasibility of utilization of the redundant section for Petroleum Coke gasification, so that it becomes an alternate cheaper feedstock. Various options to use Pet-coke in redundant sections of Ammonia plants for generation of additional Ammonia / Synthetic NG are being studied with the help of M/s. EIL. Once the technology is adapted in NFL units, it will go a long way to address to the energy needs of these plants at a cheaper cost and would increase the sustainability and competitiveness of the Company in the times to come.”
8The Report says: “Study is also being done to find alternate utilization the old NMP I plant at Nangal for production of Methanol/alternate chemicals.”
8It adds: “Due to decline in the availability of Administered Pricing Mechanism (APM)/ Non-APM and Panna Mukta Tapti (PMT) Gases, spot gas was procured during the year to sustain production at optimum levels. Domestic gas is yet to be allocated for three Fuel-oil Units converted to gas. As an interim arrangement, Company is purchasing high cost spot RLNG for Bathinda, Panipat and Nangal Units. Allocation of indigenous gas supply to these Units is being followed up regularly with the Department of Fertilizers. Out of total requirement of 0.9 mmscmd gas at Bathinda, domestic gas of 0.7 mmscmd is under allocation.”
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News Brief's

August 11: 8Ministry to assess extent of preparedness of OMCs for setting up of LNG terminals: The petroleum ministry is set to assess the extent of preparedness of OMCs for setting up of LNG terminals.
 --To enable it to do so, the ministry has put together a format which it has sent out to the various OMCs, where it has asked the companies to specify details on their proposed LNG sites, land availability, dredging costs, port traffic congestion, port navigational characteristics, harbour protection, LNG berth isolation, proximity to markets, pipeline connectivity,among others
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August 11: Fertilizer secretary writes to petroleum ministry: 31.5 mmscmd of gas not enough   Details
August 11: Zuari shuts ammonia-urea plant following emergence of a snag   Details
August 8: CFCL's fertilizers business enhances its Q1 profit by 15.11%   Details
August 8: GSFC's fertilizer business boosts its Q1 profit by 241.26%   Details
August 7: New gas allocation policy-I: Only urea and not all fertilizer plants to get domestic gas   Details
 
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