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Coromandel International Ltd.

BSE: 506395 Sector: Agri and agri inputs
NSE: COROMANDEL ISIN Code: INE169A01031
BSE LIVE 15:40 | 22 Feb 333.90 -0.75
(-0.22%)
OPEN

338.50

HIGH

338.50

LOW

330.80

NSE LIVE 15:42 | 22 Feb 334.20 0.10
(0.03%)
OPEN

335.05

HIGH

339.00

LOW

330.00

OPEN 338.50
PREVIOUS CLOSE 334.65
VOLUME 6454
52-Week high 358.35
52-Week low 165.35
P/E 22.90
Mkt Cap.(Rs cr) 9739.86
Buy Price 334.25
Buy Qty 15.00
Sell Price 0.00
Sell Qty 0.00
OPEN 338.50
CLOSE 334.65
VOLUME 6454
52-Week high 358.35
52-Week low 165.35
P/E 22.90
Mkt Cap.(Rs cr) 9739.86
Buy Price 334.25
Buy Qty 15.00
Sell Price 0.00
Sell Qty 0.00

Coromandel International Ltd. (COROMANDEL) - Chairman Speech

Company chairman speech

The fortunes of Coromandel are closely tied to Agriculture a sector that has beenseverely challenged for the last few years due to vagaries of the monsoon and thedown-trend in output prices for major crops. However Agriculture continues to be themainstay of Indian economy employing close to half the population and contributing 10percent to exports earnings. For nation to continue its growth and maintain inclusiveprogress agriculture and farmer’s role remains quintessential. However it hasvastly remained insulated to the post liberalization growth. Farmer still bears the bruntof monsoon vagaries (historically thrice a decade) but continues to ensure the foodavailability to the masses. Post-independence India has transformed from being a chronicfood deficit nation to a food exporter thanks to the advent of green revolution in foodgrains technology interventions in cash crops and use of modern agri inputs likefertilisers and pesticides. However the Indian consumer is fast changing postliberalization and this has led to shift in dietary pattern. As nation grows at a steadypace the second wave of agriculture revolution is the need of the moment to satiate thegrowing aspiration and consumption needs. We still lag far behind in the globalagriculture productivity parameters. The systemic bottlenecks like low irrigationcoverage fragmented landholdings lower farm mechanization penetration weak researchlimited credit access and poor soil health continue to bog down the crop yields and farmincome. We at Coromandel are poised to work towards developing the required agrisolutions to enhance farmer prosperity. The year 2015-16 was a challenging one for theIndian agriculture experiencing two consecutive drought years. The lower reservoir levelsand prolonged moisture stress impacted the Kharif and Rabi crop sowings. Coupled with lowglobal agri commodity prices the farming sector witnessed one of its most difficultoperating environment in recent times. Indian agriculture experienced low growth and itsagri GDP grew at a rate of 1.2 percent in 2015-16 with food grain output maintained atlast year levels. Considering the environmental severities it is a welcome trendunderscoring resilience of the farming sector. I hail the indomitable spirit showed by ourfarming community in second consecutive year of drought and thank them for ensuring foodsecurity to the nation.

During the year Coromandel had a satisfactory performance considering that theSouthern markets were affected by weak monsoon and lower crop sowings. We improved ourphosphatic fertiliser volumes and gained market share in our primary markets of AndhraPradesh and Telangana. Crop Protection’s exports segment improved its performance dueto higher demand for its key molecules and fall in utilities cost which expanded marginsfor the technical business. Specialty Nutrients and Organic Business remained more or lessat last year levels and added to our presence and value offering in this fast growingagri input space. In SSP our major thrust on quality helped in gaining market share andstrengthen our brand presence. Retail Mana Gromor Centers are fast becoming the face ofthe Company and helped in further enhancing the farmer trust and generating equity.

In terms of farming solutions we expanded our coverage in the farm mechanizationspace. Our Retail centers leveraged technology tools for knowledge dissemination and agriextension services. Crop specific new product launches in Specialty nutrients receivedpositive response from the growers. We tested our new fortified Zincated SSP offering andthe initial results have shown an improvement in nutrient delivery for farmers of oilseedand pulses segment. Unique phosphatic grades have addressed the nutrient imbalanceimproving soil health and crop yields. Crop protection business’s campaign focusingon customer health and safety during usage of crop protection chemicals has generatedgoodwill in our operating areas. On the policy side Government has ushered a series ofagricultural reforms targeting the key issues of output price discovery price supportsoil health and insurance coverage. I am confident that these changes will act as enablersto the Government’s ambitious vison of doubling farmer income over next six years.Direct Benefit Transfer of fertiliser subsidy is likely to be pilot tested across fewdistricts from Rabi’16 which is a welcome sign for the industry and the farmingcommunity. However fertiliser subsidy reforms still remains elusive creating a disparityin pricing between Urea and NPKs and leading to imbalanced usage of crop nutrients. Duringthe year the nutrient application ratios for N:P:K continued to remain at unstable levelsof 7.8:3.2:1 against the optimum levels of 4:2:1. This distortion in increased urea usageaffected balanced nutrition and farm level productivity which is due to the distortion inurea versus DAP prices. World over urea prices are around 50% of DAP prices. However inIndia due to excessive subsidy being given to urea as against phosphatics the urea priceis only 20-25% of DAP price. This is the main cause for excessive usage of urea which isperceived as a cheaper fertiliser but in reality distorts the balanced nutrition andaffects farm level productivity.

In addition to the subsidy reforms we expect corrections to happen in duty structureof raw materials to make domestic manufacturing more sustainable and foster innovation.This may reduce the imports of finished goods and promote manufacturing self-sufficiencywhich bodes well with ‘Make in India’ theme. Also we expect the extension offreight subsidy reforms to SSP segment to promote its usage among small and marginalfarmers. Going forward we expect the policy corrections to happen in this direction thatcan improve the productivity levels and farm returns.

I am confident that Coromandel can contribute significantly towards achieving the goalof self-sufficiency in fertiliser production. Over course of a decade Coromandel hastransformed from being product centric to a service oriented customer centricorganization. Our presence across the farming value chain from Seed to Harvest stagepositions us uniquely to understand the farming needs and deliver innovative solutions.With presence of around 800 Mana Gromor Centers we have moved closer to the farmingfraternity and are leveraging the technology and knowledge platform to bring difference tothe farmer’s life. We are committed towards partnering with the agriculturefraternity to usher a new phase of growth and prosperity.

A. Vellayan

Chairman