MCF targets Rs 150 cr sales from granulated fertiliser

Mangalore Chemicals and Fertilizers Ltd (MCF), a Bangalore-based UB Group company engaged in the manufacture of fertiliser (urea, DAP and MOP), is geared up to relaunch its granulated fertiliser business. The company had suspended the sale of granulated fertiliser (blended fertilier) in June 2008 following the change in the fertiliser subsidy policy by the government last year.

Deepak Anand, managing director, MCF said, “The government changed the fertiliser subsidy policy and adopted nutrient-based pricing system. As a result of this, it was difficult for us to recover the cost of conversion and we had to stop sales of granulated fertiliser. Now, we understand that the government is having a relook at their policy and is likely to revoke the earlier policy.”

The department of fertilizers is in the process of recommending to the Cabinet Committee on Economic Affairs (CCEA) to clear the policy soon, he said.

Granulated fertiliser are blended fertiliser which are crop and soil specific. They are targeted at increasing the crop yields and are different in that they are prepared as per the specific requirements of farmers. At the time of suspension of the business in June 2008, MCF sold 175,000 tonnes granulated fertiliser worth Rs 150 crore.

The company had started manufacturing granulated fertiliser in 2004 with a capacity of 25,000 tonnes per annum in Karnataka and Tamil Nadu only. The granulated fertiliser business in the country is around 2 million tonnes.

MCF is in a comfortable position to relaunch this entire subsect of the fertiliser industry, which is crop and soil specific. “Once it is cleared by the government, we are prepared to relaunch immediately. We can sell around 300,000 tonnes in a single year,” Anand told Business Standard.

H M Kshetrapal, senior vice president-marketing, MCF said the company plans to manufacture it through contract manufacturers apart from its own unit in Mangalore. The company has a contract manufacturing arrangement with eight companies in the southern states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu. “If the government clears the revised policy we will be able to sell around 150,000 tonnes of granulated fertiliser in the remaining months of this year worth around Rs 120 crore.”

MCF sells its granulated fertiliser under the ‘Mangala’ brand. Its granulated fertiliser are popular among coffee growers as the company has developed a specific fertiliser with an NPK mix of 16 : 12 : 16, he said. Its other crop-specific fertiliser include paddy, maize among others.

There are 60 manufacturers of granulated fertiliser in the country with a total capa-

city of 2 million tonnes in the states of Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh.

For the year ended March 2009, MCF reported a sales of Rs 2,469 crore, a growth of 49 per cent over the previous year. Its net profit for the year were down by 31.2 per cent to Rs 27.8 crore compared to the previous year.