RCF in talks with rural retailers for tie-ups

State-run Rashtriya Chemicals and Fertilisers (RCF) is in talks with some leading private sector rural retail chains for innovative marketing strategies and for trading in new arenas.

RCF, which last year entered into strategic alliance with rural marketing companies such as ITC e-Choupal and Godrej Aadhar, is planning to rope in more such retail chains to enter into trading of cement, pesticides and seeds.

RCF, which is one of the largest domestic fertiliser and industrial chemical manufacturers, is in discussions with regional retail players such as the DCM Sriram Group for an alliance in South India and with Triveni of Uttar radesh.

“We are also talking to Hindustan Insecticides (HIL) to offer their entire pesticide range to farmers and with two to three cement manufacturers for strategic marketing alliances to offer cement through our network and reach. Though margins are thin in trading business, it contributes to our growth and product basket since the needs of the rural markets are changing,” said J Kohareswaran, director (marketing) of the Rs 5,243-crore turnover company.

Further, the company is planning to take up floriculture as another area of diversified business, utilising the surplus land available at its facilities. A Yes Bank report estimates that India’s rural retail market is expected to grow by 29 per cent to Rs 1.8 lakh crore by 2010, thanks to rising incomes and changing consumption patterns.

Kohareswaran said the marketing initiatives include soil testing and field demonstrations, undertaken in association with the expertise of rural retailers. The farmers will get scientific advice and training in modern agricultural practices to increase productivity through such programmes and the increase in turnover was mainly from the acceptance of such initiatives. The firm carried out over 4,000 field demonstrations during the 2007-08 period, alone with ITC e-Choupal.

RCF, which achieved the highest ever turnover during last year with a quantum jump of 46.17 per cent from the previous year’s Rs 3,643 crore, had 43 per cent of its revenues from sales of traded products.