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Gujarat Narmada Valley Fertilizers & Chemicals Ltd.

BSE: 500670 Sector: Agri and agri inputs
NSE: GNFC ISIN Code: INE113A01013
BSE LIVE 15:58 | 15 Dec 476.70 28.50
(6.36%)
OPEN

458.00

HIGH

483.60

LOW

458.00

NSE 15:59 | 15 Dec 477.25 28.95
(6.46%)
OPEN

460.00

HIGH

483.90

LOW

458.25

OPEN 458.00
PREVIOUS CLOSE 448.20
VOLUME 493200
52-Week high 548.50
52-Week low 198.30
P/E 23.47
Mkt Cap.(Rs cr) 7,409
Buy Price 476.70
Buy Qty 40.00
Sell Price 0.00
Sell Qty 0.00
OPEN 458.00
CLOSE 448.20
VOLUME 493200
52-Week high 548.50
52-Week low 198.30
P/E 23.47
Mkt Cap.(Rs cr) 7,409
Buy Price 476.70
Buy Qty 40.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Narmada Valley Fertilizers & Chemicals Ltd. (GNFC) - Chairman Speech

Company chairman speech

GUJARAT NARMADA VALLEY FERTILIZERS COMPANY LIMITED ANNUAL REPORT 2001-2002 CHAIRMAN'S REPORT CHAIRMAN'S STATEMENT 26th ANNUAL GENERAL MEETING Ladies and Gentlemen, I feel privileged and honoured to be with you this afternoon. On behalf of my colleagues on the Board and on my behalf, I extend you all a very cordial welcome to this 26th Annual General Meeting of the Company. It is my pleasant duty to present to you the Annual Report and Audited Accounts of the Company for the year ended 31st March, 2002, for your consideration and adoption. The Annual Report containing the Directors' Report and Audited Accounts for the year ended 31st March, 2002, is already with you and with your permission, I shall take them as read. The Annual Report gives a comprehensive account of the Company's performance and hence, I would like to mention only the outstanding features of the performance of the Company in my statement. It is indeed in gratifying to note that the year 2001-2002 has been yet another rewarding year for the Company. The COmpany has, during the year, achieved several records on the operational, marketing and financial fronts. Before I share the achievements of your Company, I purpose to give you the background of the Economic Scenario and of the Government Policy for Fertilizer Industry so as to enable you to appraise the performance of your Company vis-a-vis the environment in which the Company has been functioning over the last few years. Pradipsinh Jadia Chairman, GNFC ECONOMIC SCENARIO The year 2001-2002 proved to be. a very difficult year for the Indian Economy. The continued global recession coupled with economic slowdown adversely affected the Indian Economy too. The terrorist attack on the, World Trade Centre on September 11, 2001, in USA aggravated the recessionary trend. Even in these trying circumstances, the Indian Economy showed greater resilience and registered an appreciable growth rate of 5.4% in the year 2001-2002 compared to 4% in the year 2000-2001. The Agriculture Sector wits the mainstay of the growth during the financial year. The sector-wise analysis of the Country's economic performance during 2001-2002 shows that Agriculture and allied sectors registered an impressive growth rate of 5.7% during 2001-2002, as against the growth mete of 0.2% in 2000- 2001. The Industrial Sector recorded the lowest growth rate of only 3.3% since 1992-93. Inflation as measured by Wholesale Price index was lower at 3.7% during 2001-2002 in comparison to 7.1% during2000-2001. Realising the need of the hour, the Government of India (GoI), pushed through various economic reforms such as disinvestment of Public Sector Undertakings, allowing Foreign Direct Investment and various other reforms in Telecom, Oil and Insurance Sectors to boost up the economy. As announced recently by Reserve Bank of India, the Country's forex reserves as at 13th September, 2002 amounted to $6,202.1 Million. This has caused the Rupee to strengthen against the Dollar. The economic performance of the Country largely depends upon the Monsoon. The late onset of Monsoon in the several parts of the Country and condition of drought in several states will have dampening effect on the Indian Economy. It is, however, hoped that the Indian Economy will emerge out of the recessionary trend with the signs of recovery. It is projected that the GDP will grow at 6 to 6.5% while the inflation will remain low below 4% during the current year. FERTILIZER INDUSTRY- GOVERNMENT POLICY I had mentioned to you last year about the Government of India is decision to implement the recommendation of the Expenditure Reforms Commission (ERC). The Government of India has made a modest, beginning by announcing 5% increase in the retail selling price of Urea as against 7% annual increase recommended by ERC. The new group concession scheme recommended by ERC is yet not finalized by Government of India. The Government of India is making all efforts to frame the long term policy for the Fertilizer Industry and in this direction, it has set up a group of Ministers to look into the matters relating to the 7th and 8th pricing period under the retention price scheme, to advise on implementing the recommendations of ERG and Fertilizer Policy in general. The Department of Fertilizers hats finalized the retention price as applicable to Urea manufactured by the Company in respect of the 7th and 8th pricing period from July 1997 to March, 2003 or till the new pricing polity is announced, whichever is earlier. It is hoped that the long term policy for Fertilizer Industry will be announced during the current year. PERFORMANCE HIGHLIGHTS During the year 2001-2002, as many as 68 new records of production and sales were established. The Company has, during the year, crossed many milestones, a few of which deserve special mention. They are:  Highest ever turnover of Rs.1,477.63 Crore and the highest ever profit before tax of Rs.118.19 Crore were achieved during the year.  Both the Ammonia and Urea Plants achieved more than 100% capacity utilization for the 11th year in succession.  Ammonia Plant produced 5,21,589 MTs of Ammonia achieving the highest ever capacity utilization of 117%.  Formic Acid Plant produced 10,415 MTs of Formic Acid registering the highest ever capacity utilization of 208%.  Acetic Acid Plant produced 71,079 MTs of Acetic Acid registering the highest ever capacity utilization of 142%.  Nitrophosphate Group of Plants excelled in the production performance achieving the highest ever yearly production by producing 274,385 MTs of Weak Nitric Acid, 56,404 MTs of Concentrated Nitric Acid and 166,010 MTs of Ammonium Nitrophosphate. These Plants also achieved highest ever capacity utilization.  The Fertilizer Association of India awarded the Company: (i) the best Technical Innovation Award for novel approach to H2S removal and Ammonia recovery from D-403 Process Condensate; and (ii) the Production Performance Award for nitrogen (Ammonia Plant) (Runners-up). CORPORATE PLAN (A) Project completed during 2001-2002 Third Gasifier Train The Third Gasifier Train with an investment of Rs.66 Crore has been set up in Ammonia Plant. It was successfully commissioned in May 2001 and is in operation since then. The Third Gasifier Train has improved the plant reliability to a considerable extent and has contributed towards the record production of Ammonia Plant and its down stream units. (B) Projects under execution 1.0 Acetic Acid Expansion Project The capacity of existing Acetic Acid Plant is being enhanced from 50,000 MTA to 1,00,000 MTA by debottlenecking, using improved technology developed by BP Chemicals, UK, the original licensor. The Project is expected to be completed well before the scheduled date of completion and commissioning activities of the Project will commence by end October 2002. 2.0 Carbon Monoxide (CO-II) Plant To meet with the additional requirement of Carbon Monoxide for Acetic Acid Expansion Project, another CO Plant with a capacity of 3,500 NM3/Hr has been put up with technology from M/s. Linde AG, Germany. This CO-II Plant has been commissioned during May, 2002. 3.0 Isothermal Reactor for Methanol -I Plant The existing Adiabetic (Quench Type Reactor) for Methanol - I Plant is being replaced with energy efficient Isothermal Reactor, at an estimated investment of Rs.13.88 Crore. Contracts for basic engineering, supply of imported items and expatriate services have been entered into with M/s. Linde AG, Germany. It is likely to be commissioned by end 2003. 4.0 Fomic Acid Plant - Capacity Enhancement Presently, around 2000 MTA Formic Acid is being imported in the Country every year. To cater to this domestic demand of Formic Acid, it has been decided to enhance the capacity of existing Formic Acid Plant from 10,500 MTA to 12,705 MTA, with an investment of Rs.5.9 Crore through in-house efforts only. This project is slated to be completed by end 2003. (C) Projects on anvil With a view to achieving the stability and reliability in Plant operations, as also better profitability, the Company is actively evaluating revamping of existing Air Separation Unit, expansion of Methanol Capacity, setting-up of Prilled Ammonium Nitrate (ANFO-Grade) based on Ammonium Nitrate Melt, small capacity WNA Plant and other revamping / modification schemes. SUBSIDIARY COMPANY Following the footprints of your Company Narmada Chematur Petrochemicals Limited (NCPL), the Subsidiary of your Company also excelled in the production performance despite the longer Annual Shutdown taken during the First Quarter. NCPL achieved the highest ever yearly production of 26,170 MTs of Aniline and 10,770 MTs of TDI during the year 2001-2002, crossing International benchmarks of capacity utilization. It also achieved a turnover of Rs.241.32 Crore and profit after tax of Rs.17.80 Crore during the year 2001-2002 after wiping out the past accumulated losses of Rs.2.66 Crore. ENVIRONMENT PROTECTION Your Company accords the highest priority to the protection preservation of environment and human safety. Adequate steps have been taken by your Company for the treatment of effluent and gaseous emission. In appreciation of the R&D efforts in the field of pollution control and environment protection, your Company has been awarded "National Award-2001" by the Department of Scientific Research, Ministry of Science & Technology Government of India. For fulfilling the objectives laid down in the Environment Policy of the Company, the Company carried out an analysis of the environmental aspects of its activities in detail. Internal Audit of the Environment Management System (EMS) covering all the Departments was also carried out, as per the documented procedure. The Members will he happy to note that your Company has been accredited with the Certification front M/s. RWTUV, Anlagentechnik, GmbH for establishing an Environmental Management System for its entire Plant campus, fulfilling the requirements of ISO 14001. HUMAN RESOURCES People are our greatest strength. Your Company has a high quality work force and the motivation amongst the Employees is high. Through their dedication, commitment to hardwork, creativity from strength to strength. Our congratulations are due to the Management and the Employees at all levels. FUTURE OUTLOOK With the modernization of Methanol, Formic Acid and Nitric Acid Plants, the production capacity of these plants has improved. With the commissioning of Acetic. Acid expansion project during November 2002, additional revenue will he generated. The Company is the market leader in most of the Chemicals it produces and enjoys the confidence of its customers. The international prices of Methanol, Acetic Acid and Formic Acid are looking up. All these will have a positive impact on the profitability of the Company. The selling price of CAN has direct relationship with subsidized selling price of Urea and. with the 5% increase in selling price of Urea announced by Government of India, the realization of decontrolled CAN Fertilizer will also improve. With its inherent strengths and equipped with the strong network of distribution in the Country, no serious problems are envisaged in the distribution and sale of fertilizer products when Urea is decontrolled. You would be happy to know that your Company has continued its excellent performance during the first quarter of the current financial year. You would have noticed from the published unaudited financial results for the quarter ended 30th June, 2002, that the Company has during the first three months, achieved a sales turnover of Rs.269.74 Crore and earned net profit of Rs.23.17 Crore. After providing for deferred tax liability, the net profit of the Company for the first quarter remained at Rs.17.33 Crore as against Rs.14.81 Crore during the corresponding period for the financial year 2001-2002. This is indeed a welcome trend for the beginning of the new year. The poor monsoon and the drought conditions in many parts of the Country, may however, impact your Company's performance in the remaining quarters. We are, however, hopeful that with the aggressive marketing efforts, the Company will have little difficulty in selling the Fertilizers. We look to the future with optimism and hope that the year will bring happiness and wealth. EARTHQUAKE - REHABILITATION WORK In the aftermath of the Earthquake that hit Gujarat on 26 January, 2001, your Company participated in a humble way by undertaking reconstruction /rehabilitation of Village Sokhda in Morbi Taluka. In less than 10 months time, 141 seismic resistant houses were built under the joint aegis of Government of Gujarat and Narmadanagar Rural Development Society, a voluntary organization affiliated to the Company. Besides this, the Company constructed the amenity building, and two public schools with seismic resistant design. The World Bank Team, which visited the site, appreciated the efforts of the Company in the reconstruction / rehabilitation of Village Sokhda. Hon'ble Chief Minister of Gujarat dedicated these houses to earthquake affected people of Sokhda Village on 20th April, 2002 and since then, the people have been using the houses, schools and other public utilities. ACKNOWLEDGMENTS I shall be failing in my duties if I fail to mention my gratitude to the Governments, both at the Centre and at the State but for whose support and cooperation, it would not have been possible for the Company to achieve such a splendid performance. We owe our gratitude to the Financial Institutions and Banks, Farmer Consumers, Dealers, other Customers and Valued Investors for the confidence reposed by them in the Management of the Company. The Management, Employees and my Colleagues on the Board, join the in conveying our heartfelt thanks to every Stakeholder in the Company.