Dharamsi, Deepak Fert Eye Alliance

Dharamsi Morarji Chemical Company (DMCC), the largest single super phosphate (SSP) producer and Deepak Fertilisers are in talks for a strategic alliance for speciality chemicals.

Vinod Punshi, managing director, Dharamsi Morarji said, "We are exploring the possibility of a strategic alliance with Deepak Fertilisers to leverage manufacturing strengths of both the companies."

Both the companies follow similar manufacturing process for chemicals. This process consists of two main sub-processes, "While we are strong at one of the sub-process, Deepak Fertilisers is strong at another one. We are looking to have an arrangement where each one of us can manufacture one of the ingredients and then put them together and sell the product," added Punshi.

 

Dharamsi is also in talk with Nirma Detergents and Merdia Chemicals to source raw materials for manufacturing single super phosphate (SSP). Both these companies manufacture "pentacid" which is a by-product of their manufacturing process and produce SSP in order to do away with this affluent waste.

DMCC has temporarily stopped production at its Gujarat plant in order to reduce costs. The plant has a capacity of 60,000 tonne and the company was able to utilise only a fourth of this capacity. "We will review this decision as part of our restructuring exercise but we also want to make our plants flexible," added Punshi.

DMCC sells SSP under the brand name of "Ship" and it contributed nearly 50 per cent to its Rs 240 crore turnover this year. "We are suffering from too much capacity in a very small market. So if we can source out raw materials from other companies, those companies can get rid of their waste products and our market does not get affected as much," said Punshi.

The company is also talking to some European and American companies in order to market their agri-inputs for various cash crops such as tobacco and grapes. "This will allow us to go up the value chain from just being a fertiliser supplier," said Punshi.

The fertiliser company is also undertaking a slew of research-driven initiatives with various institutions including the National Chemical Laboratory (NCL) and the University Department of Chemical Technology (UDCT) for creating a new product line.

...business rejig over, gets 2 div -- agri input & chemicals

Dharamsi Morarji has now completed its one and half year long restructuring process and developed a new business model. As part of its restructuring, it has divided its business into two divisions - agri inputs division which will include fertilisers, micro nutrients and organic manures, and the chemicals division which will include commodity chemicals and organic chemicals.

The company wants to change its focus from just being a manufacturing concern to a marketing one.

The company will also farm out SSP manufacturing in order to be closest to the market place and reduce processing costs.

"We have rationalised our operations including manufacturing and have rightsized out staff. Our staff strength was reduced by 30 per cent through retirements and voluntary retirement schemes," said Vinod Punshi, managing director, Dharamsi Morarji.

The company is benchmarking itself against international players and hopes to gain a world market share of 25 per cent for some of its products. DMCC also plans to increase the ratio of exports in its turnover. Currently, out of its turnover of Rs 240 crore, exports contributes about Rs 16 crore. "We are looking at achieving an export content of 25 per cent in our turnover in the next three years," said Punshi.

DMCC is also going to enter micro nutrients and organic manures segments. For micro nutrients, the company has collaborated with sister company Borax Morarji and will market Borax's products.

For organic manures, DMCC will only market products of other companies. Currently, it is shortlisting companies for possible tie up. Locally, the company will market organic manure made from waste, an initiative undertaken in association with Axel Industries, which will supply culture to convert the waste into manure. This manure will also be marketed under the "Ship" brandname.