Logistics & Supply Chain Management

Final Project Report

A STUDY ON SUPPLY CHAIN MANAGEMENT OF

CHEMICAL AND FERTILZER INDUSTRY
Submitted to
Prof. Rajendra Todalbagi

Submitted by
Section A
Group 04

18006 ANURADHA PRADEEP

18032 AMITABH PATHAK

18039 HARSHITA J

18041 MUGDHA JHALDIYAL

18061 SKANDA NARASIMHA M A

18063 SUDARSHAN R N

Batch: 2018-20

6th March 2019

Contents
GENERAL INDUSTRY ANALYSIS .................................................................................................. 1
SUPPLY CHAIN ANALYSIS ............................................................................................................. 3
SUPPLY CHAIN STRUCTURE ................................................................................................................. 3
SUPPLY CHAIN DESIGN AND SUPPLY CHAIN OPERATIONS ................................................................. 4
SUPPLY CHAIN PERFORMANCE ........................................................................................................... 7
SUPPLY CHAIN CHALLENGES ............................................................................................................... 8
SUPPLY CHAIN OPPORTUNITIES .......................................................................................................... 8
COROMANDEL INTERNATIONAL LIMITED ........................................................................... 10
INTRODUCTION ................................................................................................................................. 10
STRATEGIES FOR COROMANDEL INTERNATIONAL LIMITED ............................................................. 11
COMPETITIVE STRATEGY ................................................................................................................... 13
DEMAND AND SUPPLY ANALYSIS ...................................................................................................... 14
SOURCING STRATEGY........................................................................................................................ 17
SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF COROMANDEL INTERNATIONAL........... 17
SCOR MODEL ................................................................................................................................... 20
BENCHMARKING FINANCIAL DATA OF COROMANDEL ..................................................................... 24
GUJARAT STATE FERTILIZERS AND CEMICALS LIMITED .............................................. 27
INTRODUCTION ................................................................................................................................. 27
COMPETITIVE STRATEGY ................................................................................................................... 29
DEMAND AND SUPPLY ANALYSIS ...................................................................................................... 30
SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF GUJRAT STATE FERTILIZER .................... 33
COMPARATIVE ANALYSIS OF THE INDUSTRY ..................................................................... 36
CHALLENGES ................................................................................................................................... 40
REFERENCES .................................................................................................................................... 41

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GENERAL INDUSTRY ANALYSIS
The actual production of all the Fertilizers during the year 2016-17 was 414.41 LMT. The
estimated production of all the Fertilizers during the year 2017-18 is expected to be 462.20
LMT showing an increase of more than 11% in comparison with the previous year. The rapid
build-up of fertilizer production in the country has been achieved as a result of a favorable
policy environment facilitating investments in the public, co-operative and private sectors.

Market Dynamics

The increasing population growth has led to food security concern and increased awareness
among the farmers about the uses of fertilizers. Some of the other factors driving the growth
of the market are high government subsidies and growing investments in the fertilizer
industry. There is a shortage of raw materials in the country and the consequent dependency
on imports is leading to volatile prices in the fertilizer industry. However, the new policies
will help in stabilizing the raw material prices during the coming years.

Major companies in the sector include:

Chemical Co. Limited

Coromandel International Limited

Deepak Fertilizers

Gujarat State Fertilizers

Indian Farmers Fertilizer Co-operative Ltd

Nagarjuna Fertilizers and Chemical Limited

1
National Fertilizer Limited

2
Industry Scenario

Market size of the Chemicals industry in India stood at $ 163 bn in 2017-18.

Alkali chemicals had the largest share in the Chemical industry in India with approximately
69% share in the total production. Production of polymers account for around 59% of total
production of basic major petrochemicals.

 The petrochemical market in India is expected to grow at a CAGR of 10% over the next
5 years to reach $ 100 bn by 2022.

 The market for crop protection chemicals in India is expected to reach $ 7.5 bn by 2019.
This growth in demand is based on a rapidly growing population and a decrease in per
capita availability of arable land, both of which result in a greater need to increase
agricultural yield.

 The specialty chemicals market has witnessed a growth of 14% in the last five years;
the market size is expected to reach $ 70 bn by 2020

SUPPLY CHAIN ANALYSIS

SUPPLY CHAIN STRUCTURE

Supply chain structure in the fertiliser industry is difficult because of the complexities
associated with this industry.

 Conventional manufacturing (discrete manufacturing) uses bills of materials that

specify the parts that go in the final product, assembles the products, and produces lots
consisting of distinct units.
 In process manufacturing there is use formulas and manufacturing recipes. They
produce goods in batches or a continuous stream. SCP is based on modelling constraints
and key parameters.

In factories many tightly interconnected operating units for blending, separating, reacting and
packaging of final products is used.

Tanks are used everywhere, within operating units, between units to balance operations, and
for temporarily storing materials, work-in-process, and finished goods inventory. Planning
requires an explicit understanding of the complex, non-linear chemical processes occurring
within process units. Complex relationships between raw material variability, operating units
3
and constraints on product changes must still be thoroughly modelled to develop optimal
schedules.

Supply chain costs-Total costs include all the supply chain costs, including material, transport,
inventory, and facility costs. These costs are usually dependent on one another. Using
expensive air transportation instead of cheap sea transportation could for example give overall
cost savings, if the cost savings from reduced inventories more than offset the difference.
Companies may focus on minimizing functional costs such as transportation, when they instead
should recognize that the goal should be to reduce the total logistics costs.

In addition to modelling manufacturing, a good supply chain solution needs to model demand
and inventory. This is important because the central process in supply chain management is
sales & operations planning (S&OP), which is increasingly being referred to as “integrated
business planning” (IBP). IBP balances supply and demand in a manner that optimizes an
organization’s key financial goals. Running demand-supply simulations is incredibly clunky
and time consuming at best. But it can be all but impossible for complex chemical supply
chains unless demand, inventory, and manufacturing parameters and constraints are in one
model.

SUPPLY CHAIN DESIGN AND SUPPLY CHAIN OPERATIONS

There are various processes involved in the supply chain. It consists of mainly three processes.

4
 Procurement of raw materials
As the raw materials for a fertilizer industry, minerals like rock phosphate, sulphur are
not available in India and the ammonia production in India is also very low, many
fertilizer manufacturing companies in India import the raw material required for
manufacturing process.
This procurement of raw materials involves many procedures involving contracts with
suppliers, dealing with government regarding customs, port operation, etc. dealing
with external agencies for completing the procedure of imports, transportation of raw
materials from port to the plant and storing.
 Manufacturing of fertiliser

Manufacturing process in process industry like fertilizer industry is more complex than
mechanical manufacturing. As the manufacturing process in fertilizer industry cannot
be stopped as simply as in mechanical manufacturing, it requires critical planning. The
processes are mostly automated due to their nature. So, it involves higher degree of
advanced technology and engineering. And also, to obtain the end product, various
processes should be coordinated to follow a specific sequence.

For example, consider the manufacturing process of DAP/NP fertilizer. As you can see,
to ensure a uniform production of end products, the intermediate products should be
produced accordingly. So, it requires high coordination between these processes in
various parameters.

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  Distribution of the finished product

 After the fertilizer is ready, it should be ensured that all the fertilizer is available to all
potential customers (farmers). Again, in fertilizer industry, it is a difficult task. As the
potential customers are distributed throughout the rural areas of the country, the
distribution network is large and requires more resources for managing. The uniform
production pattern in the plant should be matched with the highly varying demand
pattern for different regions of the country. This requires high degree of planning from
management and high availability of warehousing facilities.

 Normally, the mode of transport preferred is railways due to its low cost and high
connectivity to rural areas. So, in India, the distribution of fertilizer and cost of
distribution is highly dependent of Indian railways infrastructure and freight charges.
Road and sea modes are also used but in a smaller extent.

 In India, marketing and sales of fertilizer is an easy function because of the fact that
demand exceeds supply. So, the product can be sold once it reaches the market. In
fertilizer industry, distribution is the main function in marketing.

Supporting Activities

To ensure the steady flow along the supply chain various kind of critical supporting activities,
apart from the core activities, are to be performed. Some of them are:

 Power generation (for the consumption of plant)

 Forex management (Hedging to averse the risk of volatile raw material prices)
 Human resource management (Recruitment & Training)
 Administration
 Department for environmental protective measures
 Systems Dept, etc.

Central planning

In this fertilizer value chain, the most important function is planning and coordinating of all
these important chain functions. In procurement of raw materials, a company has to plan for

6
ordering of raw materials based on demand pattern and production requirement. As buying of
raw material involves risk of currency fluctuation and international market price fluctuation,
hedging strategies should be adopted to averse these risks. In manufacturing process,
production cannot be done accordingly with the demand pattern. So, the production should be
planned so to meet the seasonal demand of fertilizers.

And also, the manufacturing plants should meet the safety and environmental standards laid
out by the government to carry out the production operations continuously. In marketing, even
though demand exceeds supply, estimating demand for different types of fertilizers at different
geographical locations and seasons is challenging and complex task. Distribution requires
planning and maintenance of distribution network that spread through rural areas.

SUPPLY CHAIN PERFORMANCE

 Manufacturing activities of the chemical industries are slowly moving to low cost
regions like Eastern Europe and Asia
 Increased in plant capacity in low cost product have made competition (on the price
front) severe
 The demand is down after the economic downturn hit the Asian region in 1997

7
SUPPLY CHAIN CHALLENGES

 Raw material availability and pricing

The Indian fertilizers industry faces some serious challenges in the form of
availability and fluctuating prices of raw materials required to produce fertilizers.
The primary cause of fertilizer price fluctuations is related to the supply and
demand factors. India also faces a handicap due to lack of natural resources
required to produce fertilizers. In case of urea, there is not enough natural gas
available in the country.
 Process information ensures quality and efficiency

The ammonia production process passes through a number of stages, from

desulfurization and the primary reformer to the synthesis reactor. The composition
of the material flow must therefore always be closely inspected. Any fluctuations
would impact on all subsequent stages, and so the consequences for process
quality and efficiency would be serious

 Complex manufacturing process

There are many tightly interconnected operating units for blending, separating,
reacting and packaging of final products

SUPPLY CHAIN OPPORTUNITIES

 Digitalisation

Digitalization can improve chemical industry maintenance performance and give

companies who embrace technology a decided advantage in today’s globally
competitive environment. According to a recent MarketResearch.com blog on
megatrends in the chemical industry, digital technology can help chemical
companies in many ways

8
 Good demand forecasting
This makes sense, as the effects of demand planning on the supply chain are wide-
ranging. Stockouts are reduced and delivery times are shortened because of more
accurate predictions, safety-stock levels can be reduced because of lower demand
uncertainty, and production and transportation costs are reduced because of
increased and smoothed manufacturing utilization.
 Improper training
During 2009, 4.3 out of every 100 workers in the industry were involved in
accidents. A large portion of these accidents occurred as a result of improper
training of personnel.

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COROMANDEL INTERNATIONAL LIMITED

INTRODUCTION

Coromandel International Limited is an Indian company established in the early 1960s by way
of IMC and Chevron Companies of USA. Originally named Coromandel Fertilisers, the
company is in the business of fertilizers, pesticides and uniqueness nutrients. The organization
is also in rural retail business in the country of Andhra Pradesh through its Mana Gromor
Centres. Coromandel International is a subsidiary of each the Muruguppa group and EID Parry,
which holds 62.82% of the fairness in the company. The corporation has eight manufacturing
gadgets located in the states of Andhra Pradesh, Tamil Nadu, Maharashtra, Gujarat and Jammu
and Kashmir. Its product line consists of Gromor, Godavari, Paramfos, Parry Gold and Parry
Super. The enterprise produces and sells phosphatic fertilisers of a variety of grades, including
Diammonium phosphate and Single Super Phosphate.

Coromandel was once ranked #16 of Business Todays’ 2009 listing of the Best Companies to
work for in India. The organization confers Borlaug Award for excellent Indian scientist in the
area of agriculture and environment

Coromandel International Limited, India’s 2nd greatest Phosphatic fertilizer player, is in the
business segments of Fertilizers, Specialty Nutrients, Crop Protection and Retail. The
Company manufactures a wide range of fertilizers and markets around 4.5 million tons making
it a leader in its addressable markets.

In its endeavour to be a entire plant nutrition solutions Company, Coromandel has also brought
a range of Specialty Nutrient products which include Organic Fertilizers. The Crop Protection
commercial enterprise produces insecticides, fungicides and herbicides and markets these
products in India and throughout the globe. Coromandel is the 2nd largest producer of Malathi-
on and only the 2nd manufacturer of Phenthoate. Coromandel has additionally ventured into
the retail commercial enterprise setting up around 800 rural retail hubs in the States of Andhra
Pradesh, Telangana, Karnataka and Maharashtra.

The Company clocked a turnover of Rs. 11,049 Crore in the course of FY 2017-18. It was
ranked among the top 20 fantastic companies to work for by Business Today and was once
additionally voted as one of the ten greenest agencies in India by using TERI, reflecting its
dedication to the environment and society. Coromandel is a section of the INR 329 Billion
(32,893 Crores) Murugappa Group.

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STRATEGIES FOR COROMANDEL INTERNATIONAL LIMITED

Speciality Nutrients Division (SND) Strategy

 Continuous innovation to introduce customized products suitable to soil, region and

crop requirements - Improve nutrient use efficiency
 Leverage SQM to bring global best practices in crop nutrition management
 Independent & specialized marketing teams to bring crop focus- Developing market
based on total nutrition package
 Crop based, and soil based new product introduction to address farmer needs
Crop Protection Strategy

 Increase R&D focus – Starting R&D centre for crop protection business in Hyderabad
 Improving souring efficiency and generate market information through China office
 Expand business in LATAM, Africa and APAC by leveraging strong registration
portfolio
 Focus on Export Registrations to improve market penetration
Retail Strategy

 Positioning Retail as a complete “Farming Solutions” platform

 Constantly deliver significantly improved customer value proposition than competition
in terms of products & services
 Leverage farm implements knowledge of Yanmar to expand operations
 Increasing business efficiencies and margin expansion
 Strengthening Multi brand and expansion of range assortment

COMPETITORS OF COROMANDEL INTERNATIONAL LIMITED

Agronomy Company of Canada is perceived as one of Coromandel's biggest rivals. Agronomy

Company of Canada was founded in null, and is headquartered in Thorndale, Ontario.

11
Agronomy Company of Canada is in the Agricultural Products industry. Agronomy Company
of Canada generates $1.7B less revenue vs. Coromandel.

Loveland Products is a top competitor of Coromandel. Loveland Products is a Private company

that was founded in 1970 in Loveland, Colorado. Loveland Products operates in the
Agricultural Products industry. Compared to Coromandel, Loveland Products has 4,240 fewer
employees.

Agria is Coromandel's #3 rival. Agria is headquartered in Shenzhen, Hong Kong Special

Administrative Region, and was founded in 2000. Agria competes in the Agricultural Products
industry. Agria generates 47% the revenue of Coromandel.

12
COMPETITIVE STRATEGY

 ‘Make in India’ policy to incentivize domestic fertiliser manufacturing and improve

plant capacity utilization
 Digitization of the Fertiliser Supply chain under Direct Benefit Transfer to improve
stock visibility and bring transparency in operations
 Agri infrastructure development – Strengthening of Irrigation, cold chain, rural
electrification and digital connectivity to bring structural reforms in rural India
 Doubling farm income by 2022 - Higher Minimum Support Price, price discovery
through electronic markets and agriculture insurance to improve disposable income for
the farmers and support higher agri inputs usage
 By 2022, ~26 Crop Protection molecules are going off patent, which provides
significant growth opportunities for generic manufacturers
 Policy change in SSP mandating marketers to print brand name of the manufacturers
on the bags to promote quality consciousness among consumers
 Entry into bio pesticide business to provide access to US and European markets
Strengths

 Amongst the pioneers and market leaders in Organic Fertiliser, Specialty Nutrients,
Phosphatic fertilisers in India
 Significant presence and brand equity in high agri inputs consuming South, West and
East India markets
 Diversified product portfolio with non-subsidy businesses contributing significant
share in Company’s profitability
 Differentiated crop solutions provider with nearly one-third of domestic sales coming
from unique products
 Direct consumer connect through 800 Retail Centers in Andhra Pradesh, Telangana,
Karnataka and Maharashtra offering products and services to around 3 million farmers
 Captive Phosphoric Acid and Sulphuric Acid manufacturing capacity improving the
cost structure of Phosphatic products
 State of the Art R&D facilities for new product development in Nutrient and Crop
Protection space
 ‘Make in India’ policy to incentivize domestic fertiliser manufacturing and improve
plant capacity utilization

13
  Tax reforms introduced under GST to help in eliminating spurious players, bringing
transparency in operations and benefiting organized players
 Digitization of the Fertilizer Supply chain under Direct Benefit Transfer to improve
stock visibility and bring transparency in operations
 Agri infrastructure development – Strengthening of Irrigation, cold chain, rural
electrification and digital connectivity to bring structural reforms in rural India.

The table below shows the risks associated with the company and how it handles the risk using
a mitigation plan.

DEMAND AND SUPPLY ANALYSIS

During the year, the global economy witnessed a cyclical recovery with revival in investment,
manufacturing activity and trade. For the first time since the global financial crisis in the year
2007-08, all major regions of the world experienced an uptick in economic growth. However,
increased protectionism, trade barriers and rising geo political tensions poses downside risk to
this growth momentum. As per the World Bank estimate, Global GDP is projected to grow
from 2.4% in 2016 to 3.0% in 2017, with advanced economies growing at 2.3% and developing
& emerging economies growing at 4.3%. Prices of industrial commodities continued to
strengthen during the year. In the oil market, inventories moderated amid strong demand,
OPEC production restraint, and stabilizing U.S. shale oil production, resulting in recovery in

14
Crude oil prices. Metal prices surged in 2017 due to strong demand and supply constraints,
notably Chinese environmentally driven supply cuts. Agricultural prices were broadly
unchanged in 2017 and are anticipated to gain marginally in 2018.

On the domestic side, the year used to be marked by introduction of fundamental tax reform-
Goods and Services Tax (GST). Though the transition of such scale and complexity led to few
challenges leading to damaging effect on economy at some point of the first half of the year,
the systems are beginning to stabilize since. Further, the new Insolvency and Bankruptcy Code
for addressing the pressured property and enforcing a most important recapitalization bundle
to reinforce the public quarter banks have been delivered at some point of the year. Stable
exchange rate, low inflation, expanded modern account balance, exports growth and stable
commodity environment supported eco-nomic growth, which used to be partly slowed through
GST and demonetization impact. Foreign ex-change reserves endured to grow at 11% to USD
409 billion, signalling a healthy capital in-flow led by using foreign investment and banking
capital.

As per Central Statistics Office (CSO) estimates, India’s GDP is likely to develop through
6.7% during the year, driven through recovery in government & personal consumption
and capital formation. With global recovery possibly to continue in 2018, stabilization in GST,
revival in funding and ongoing structural reforms, India’s economic system is expected to grow
via 7.3% (as per World Bank), with downside chance due to surge in crude prices, tightening
of financial conditions in the developed countries and protectionist policies.

Global fertiliser consumption for 2017-18 is projected to grow at a slower pace (+0.9% to 190.7
Mt), as low international expenses for most agricultural commodities and a growing emphasis
on more efficient use of mineral and natural fertilisers stored growth under check. Further,
China’s (world’s biggest fertiliser consumer) policy for Zero-Growth in fertiliser use by 2020
and substituting mineral fertilisers with organic alternatives, is possibly to result in marginal
consumption increase. As per the International Fertilizer Association (IFA), global fertiliser
demand is anticipated to extend through 1% over the subsequent year.

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SUPPLY CHAIN STRATEGY OF COROMANDEL:

ORDER DELIVERY LEADE TIME (AVERAGED FOR A YEAR_)

The inventory is 2227.13 as of March 2018. Thus, the company follows MTS strategy

SUPPLY CHAIN RESPONSIVENESS & PRODUCT VARIETY:

Coromandel markets a wide range of Phosphatic Fertilisers, Crop Protection Products,

Speciality Nutrients like Sulphur Pastelles, Water Soluble Fertilisers, Micro Nutrients and
Organic Fertilisers. The Company exports its Crop Protection products to countries across the
globe. Coromandel also provides agriculture input solutions to the farmers. The company is a

This shows that the company makes innovative products and thus, responsive supply chain is
used.

This also shows the variety of products produced in Coromandel

16
SOURCING STRATEGY

Their purchasing power is high

PRODUCT NAME SALES VALUE (Rs Cr.)

Ammonium Phosphatic Fertilizers 8257.2800

Subsidy 2673.1400

Other Operating Revenue 56.1200

Their supplier risk is low.Thus, they use leverage product strategy

SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF COROMANDEL

INTERNATIONAL

1. Facilities- Coromandel is a flagship company of the Murugappa Group and is a

subsidiary of E.I.D Parry (India) Limited which holds 60.59% of the equity share
capital in the Company. The Company operates through two major segments: Nutrients
& other allied business and Crop Protection, offering farming solutions comprising of
Fertilisers, Crop Protection, Specialty Nutrients and Organic compost. The Company
also operates a network of around 800 rural retail outlets under its retail business across
Andhra Pradesh, Telangana, Karnataka and Maharashtra. The Company has 15
manufacturing facilities located in Andhra Pradesh, Tamil Nadu, Karnataka,
Maharashtra, Madhya Pradesh, Uttar Pradesh, Rajasthan, Gujarat and Jammu &
Kashmir. The Company’s products are marketed all over the country through an
extensive network of dealers and its own retail centers. The crop protection products
are exported to various countries. During the year, Coromandel acquired the Bio
pesticide business from E.I.D Parry (India) Limited which would enable the Company
to gain entry in high growth bio pesticide segment in Indian, North American and
European markets.
The coromandel retail outlets which operates around 800 stores in Andra Pradesh,
Telangana, Karnataka and Maharashtra offering the entire range of agri-product and

17
 Fservices to three million farmers. The upgraded manufacturing facilities and capacity
expansions have created considerable flexibility in the Company's production portfolio
to meet the emerging fertiliser requirements of markets it is present in and do so while
producing quality material.
 The company has completed the launch of umbrella brand for its crop protection
products and now sell them under GROMOR SURAKSHA
 The company took a disciplined approach to reduce the fertilizer pipeline
inventory
 The R&D facilities for new product development in nutrient and crop protection
space
 Collaborating with farmers and bringing the latest innovations in farm
technology to improve their overall well-being through their high quality
products
 The plants have operational flexibility to manufacture multiple grades through
different rock phosphate and phosphatic acid combination making the company
lowest cost producers in India
 Introduction of high yield variety seeds and intensive cropping increases the
crop production of the country
 It offers GROMOR unique grade offered which contains nitrogen, phosphorus
and potassium best for all kinds of crops like cotton, groundnut, chilly ,soya
bean and potato

2. Inventory-The company owns channel inventory and strengthened business processes,

Coromandel expects to sustain its growth momentum for 2018-19. Going forward,
Company plans to strengthen its existing operations and capture new opportunities
through expanding its markets, product & services, business adjacencies and agri
technologies. The assets of the Company, including its plant and machinery, work in
process inventory and finished stocks are adequately insured against loss or destruction
by fire and allied perils. The process of planning, implementing and controlling the
efficient, cost-effective flow and storage of raw materials, in-process inventory,
finished goods

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3. Transportation and Logistics
Optimisation of rail road transportation-Operations optimisation is the main business
of railways. Both train operators and infrastructure managers create the best solutions
for activities within a given context of infrastructure and rolling stock. Quality is
measured by punctuality and the number of trains running at peak times. Company will
focus on primary markets to reduce logistics cost, improve customer centricity and
create quality awareness through extensive quick test campaigns. To improve
efficiency and throughput in its plants, Business will complete technology upgradation
and debottlenecking the capacities.

4. Sourcing
Long term tie up with Foskor, south Africa and Tunisia supply agreement for ammonia
and sulphur with Mitsui Potash from Canpotex Ammonia from QAFCO, Joint venture
with SQM Chile, a global player in specialty plant nutrition, improving Coromandel’s
sourcing capability, manufacturing and technical knowledge in Water Soluble Fertiliser
Strategic investment in Tifert (in Tunisia) and Foskor (in South Africa) for upstream
integration for Phosphoric Acid sourcing
 Entry into Specialty Nutrient and Organic Fertiliser segment
 Acquisition of erstwhile Sabero Oganics providing access to international
markets
 Technology tie up with Shell Technology for new product development
 Acquisition of Bio Pesticide business from EID Parry
 Joint venture with SQM Chile, a global player in specialty plant nutrition,
improving Coromandel’s sourcing capability manufacturing and technical
knowledge in Water Soluble Fertiliser

5. Distribution Network- we have set up our own distribution network in key states and
are steadily enhancing our reach. Direct consumer connects through 800 Retail Centers
in Andhra Pradesh, Telangana, Karnataka and Maharashtra offering products and
services to around 3 million farmers. he Company has its own corporate internal audit
function to monitor and assess the adequacy and effectiveness of the Internal Controls
and System across all key processes covering various locations.
Coromandel has 4 Fertiliser plants and 4 Crop Protection plants across 5 states in India.

19
  Expansion in Retail segment through opening 300 outlets in Andhra
 Expansion of Retail operations in Maharashtra markets

Fertiliser plants at: Kakinada & Visakhapatnam in Andhra Pradesh, Ennore & Ranipet
in Tamil Nadu, Ennore & Ranipet in Tamil Nadu.

Crop Protection plants at: Ranipet in Tamil Nadu, Navi Mumbai in Maharashtra,
Ankleshwar in Gujarat and Jammu in J&K.

Coromandel's marketing branches servicing the farming community across India

are located at:

Hyderabad, Kurnool, Vijayawada and Visakhapatnam in Andhra Pradesh, Bangalore

and Raichur in Karnataka, Trichy in Tamil Nadu, Aurangabad in Maharashtra,
Ahmedabad in Gujarat, Indore in Madhya Pradesh, Raipur in Chhattisgarh and
Bhubaneswar in Orissa, Kolkata in West Bengal, Ghaziabad in Uttar Pradesh.

SCOR MODEL
The Supply chain operations reference (SCOR Model) model provides a unique framework
that provides a unique framework that links the performance, processes best practices and
people into a unified structure. The frame work supports between supply chain partners and
enhances the effectiveness of supply chain management, technology and related supply chain
improvement activities.

SCOR solves the supply chain challenges

 Superior customer service: The SCOR model provides a framework for measuring
and understanding the current supply chain conditions and performance and creates a
foundation for improvement
 Cost control: SCOR metrics provides the basis of an organization to measure hoe
successful it is in achieving its desired objectives. SCOR metrics are supposed to be
used in the supply chain performance attributes, making it easier to compare different
supply chains and different supply chain strategies

20
  Planning and risk management: SCOR helps users establish rules and strategies,
assign responsibilities, coordinate responses and monitor current conditions.
 Supplier/ Partner relationship management: SCOR provides a common language
for supply chain classification and analysis. Using a common language and framework
makes it easier for teams to communicate, spends benchmarking efforts and enhances
the evaluation of best practices
 Talent: The SCOR skills management framework complements process reference,
metrics reference and practice reference components with baseline skills, experience,
aptitude and training

SCOR Model in Coromandel Corporation

SCOR framework model

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  Level 1: It defines the scope and content of the supply chain
 Level 2: Here companies will implement operational strategies
 Level 3: It defines the ability to compete successfully in the market

The above process involves raw materials, suppliers, manufacturer, distributor and consumer.
Level 1 to 3 includes the schedule of product delivery, return of material, product verification
and transportation of product.

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The SCOR Model Attributes

Performance attributes Strategic metrics

Customer Reliability Addresses the ability to

perform tasks as expected. It
is a customer focused
attribute

Responsiveness It describes the speed at

which the tasks are
performed

Agility This describes the ability to

respond to external
influences and abilities to
change

Internal Cost It describes the cost of

operating the process. It is
internally focused attribute

Assets It describes the ability to

efficiently utilize the assets.

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BENCHMARKING FINANCIAL DATA OF COROMANDEL

Industry Fertiliser Sales (in Lakh tons)

Year' Urea Phosphatics MOP
FY 2015-16 320 186 24
FY 2016-17 296 171 28
FY 2017-18 303 175 32

Industry Fertiliser Sales (in Lakh tons)

600
500 24 32
28
400 186 171 175
300
200
320 296 303
100
0
FY 2015-16 FY 2016-17 FY 2017-18

Urea Phosphatics MOP

Industry Phosphatic Performance (in Lakh tons)

Year' Production Imports Sales
FY 2015-16 112 66 186
FY 2016-17 123 49 171
FY 2017-18 129 47 175

24
 Industry Phosphatic Performance (in
Lakh tons)
200
186
171 175
150 66 49 47

100

123 129
50 112

0
FY 2015-16 FY 2016-17 FY 2017-18

Production Imports Sales

Gross Revenue (Rs. in crore)

Year' Rs in crore
2009 9668
2010 6527
2011 7719
2012 9940
2013 8627
2014 9442
2015 11341
2016 11690
2017 10239
2018 11044

25
 Gross Revenue (Rs. in crore)
14000

12000 11341 11690 11044

9940 10239
9668 9442
10000 8627
7719
8000
6527
6000

4000

2000

0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Profitability Trend (Rs. in crore)

Profit after Profit before
Year tax tax
FY 2013-14 345 494
FY 2014-15 403 592
FY 2015-16 358 529
FY 2016-17 477 712
FY 2017-18 659 1003

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GUJARAT STATE FERTILIZERS AND CEMICALS LIMITED

INTRODUCTION

Gujarat State Fertilizers & Chemicals Limited (GSFC) is an Indian manufacturer of fertilizers
and Industrial Chemicals. GSFC was founded in 1962. Oil and gas discoveries in Bombay High
and South Basin triggered the birth of 8 new generation fertilizer plants to fulfil the growing
food needs of India.

The company is listed on the Bombay Stock Exchange with the Security Code 500690, and as
at Monday 28 September 2014 it had a market capitalisation of Rs 3,030.42 crore. GSFC
maintains its headquarters in Vadodara in the state of Gujarat, on the Vadodara-Ahmedabad
National Highway. It manufacturers plastics, nylons, fibres, industrial gases and varied
chemicals including urea, ammonia, ammonium sulphate, sulfuric acid, phosphoric acid &
diammonium phosphate, Caprolactam, Malemine, Methanol.

THE BIRTH OF A GIANT (1962-1972)

GSFC was incorporated in 1962 and its plants went into production of fertilizers in 1967. In its
very first decade of existence, GSFC became known for its path-breaking achievements, to
name a few, it was the first industrial complex in the country set up in joint sector, first company
to set up fertilizer plants within a short span of two years of getting requisite approvals, it was
the first industrial project to secure direct and active equity participation of farmers, the first
fertilizer unit to get assistance from IDBI's Assistance Fund, and the first Company to adopt
the Steam Naphtha Reforming process for manufacture of Ammonia.

GSFC has set up the first DAP fertilizer complex in India at Sikka, Jamnagar on the west coast
of Gujarat. Its technical edge as well as engineering resources acquired during its very first
decade have been catalysts in providing impetus to its expansion and diversification strategies
spread over the next four decades.

NEW FRONTIERS OF DIVERSIFICATION (1972-2002)

Originally conceived and started as a Fertilizer company with an objective of providing

agricultural boost to the farmers in the State of Gujarat and at the same time making Gujarat
self-sufficient in fertilizers. Visualising the market pulse well in time, the Company, as a
structured diversification strategy, ventured into the foray of industrial chemicals segment.
Having this objective in mind, Company's integrated complex at Vadodara has been so

27
designed and structured that it shall be more or less self-sustained by using the by-products
generated by its fertilizer group of plants.

GSFC was the first Company in India to establish a Caprolactam plant in the year 1974. This
was the apt time when Caprolactam was in great demand mainly for the manufacture of
downstream products like nylon yarn, tyre cord etc. As a way forward, it led to expansion into
Nylon-6 production. GSFC was also the first to recover Argon gas from purge gas, thus
entering into the foray of industrial gases by making Argon gas which is prominently used in
welding and this was done way back in the year 1981.

GSFC also has to its credit of setting up India's first Melamine plant. The expansion and
diversification of GSFC's product portfolio unfolded new growth vistas to the nation by
providing much needed fertilizers for agricultural growth and the chemicals for industrial
growth.

AN IMPRESSIVE GROWTH STORY (2002-2014)

It is rightly said that you need to take one step backwards if you want to stride forward and this
adage equally applied to GSFC and the phase between 1999-2002 was a phase of one step
backwards which in fact facilitated endless strides forward. GSFC never ever then looked back.
The period between 1999 to 2001 was a phase where it was veering on the brink of a cash
crunch. This phase of GSFC was attributed to many reasons. To name a few are increased
energy costs, technical hiccups and delayed commissioning of new Ammonia plant after a
gestation period of eight years and resultant increased project cost, excess outflow of interest
etc. This new Ammonia plant continued with technical snags which could stabilise only by end
of 2003. The liquidity problems further compounded due to expansion of DAP capacity at
Sikka (1999-2003) which required infusion of Rs. 180 Crores. The Government of India also
recovered subsidy amounting to Rs. 375 Crores. The drought during this period further
depressed prices and demand for all products. There was also a shortage of gas that resulted
into use of costly LSHS and Naphtha. The margins in Melamine and Caprolactam, GSFC's
blue chip products, were low in this period due to depressed industrial demand internationally.

The turnaround story of the Company began from FY 2003-2004. Under able leadership and
timely intervention of then Hon. Chief Minister Shri Narendra Modi in taking certain bold
policy decisions, the company could work on the strategies to enhance its productivity, bring
down costs through technical innovations and improved management information systems.

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COMPETITIVE STRATEGY

 GSFC could achieve consistent profitability record and it has touched its highest prof-
its during the period 2001-02 to 2012-13. Its net profit touched ever highest level of
Rs.759 Crores during 2011-12 and the total profit after tax during 2001-02 to 2012-13
was Rs.3594 Crores, as compared to total profit after tax of Rs. 1166 Crores earned
during the period 1988-89 to 1999-2000.
 Significantly, GSFC, which was under loss in the year 2001-02 and 2002-03 on ac-
count of various factors, not only turned around but also earned its highest ever profit.
Turn-over per share increased from Rs.255/- to Rs.665/- per share.
 During this period, GSFC diversified into new chemicals like MEK-Oxime and other
raw materials such as Phosphoric Acid, Potassic Acid, etc. It also diversified and in-
creased significantly its Fertilizers portfolio. Its Fertilizers manufacturing capacity to-
day stands at 1.7 Million Tons. It also added significantly to its wind energy portfolio
which stands at over 150 MW. The total projects invested by GSFC during the period
of Hon'ble Chief Minister is Rs. 8340 Crores.
 This performance of the company is brought out amply by investments made by
domestic institutional investors as well as foreign institutional investors which stands
at close to 40% of its total paid up capital.
STRENGTHS

 Zero Debt Company.

 Fully integrated Production Facilities.
 Better & efficient Management of Utilities viz. Power & Gas.
 Proper & timely plant Maintenance Schedule.
 Strong Brand Image and Market Network.
OPPURTUNITIES

 Argo products consolidation.

 Exploring tie-ups with countries like Togo, Uganda, Senegal, Canada etc. for consistent
supply of raw material.
 Capacity addition in complex fertilizers.
 Expanding fertilizer business reach through franchise network.
 Trading of fertilizers & techno products to tap growing demands.

29
DEMAND AND SUPPLY ANALYSIS

Past year has been marked by some key structural initiatives taken by present government to
build strength across macroeconomic parameters for sustainable growth in future. The
transformational Goods and Service Tax (GST) was launched in July 2017 with an aim to
consolidate all other indirect tax laws and also to bring a harmonized approach in tax web.
With a policy change of such scale, scope and complexity, the transition unsurprisingly
encountered challenges of policy, law and information technology system, which especially
affected the informal sector of business more. However, expeditious responses followed from
Government side to rationalize and reduce tax rates in many sectors at a later date and
simplify the compliance burden, which helped in creating accelerated acceptance of GST.
Further, the new Indian Bankruptcy Code (IBC) has provided resolution framework that will
help corporates clean up their balance sheets and reduce their debt. In another critical move
government announced a large recapitalization package to strengthen the public sector banks.
Under the shadow of such vital macro-economic adjustments, Indian economy has been
marked by swings during last FY. In the first half, India’s economy temporarily decelerated,
but remained second best performer among major countries, with strong macroeconomic
fundamentals, signalling better time ahead. The major reasons for dismal growth were
aftershocks of demonetization, teething difficulties in the new GST implementation, high and
rising real interest rates, rising crude prices and sharp falls in certain food prices that
impacted agriculture incomes. However, in the second half, the economy witnessed robust
signs of revival. Economic growth improved as the shocks began to fade, corrective actions
were taken, and the synchronous global economic recovery boosted exports. The actions
taken in correcting macroeconomic fundamentals helped in improving India’s ranking in
World Banks index of “Ease of Doing Business” remarkably during the FY. With ongoing
reforms, if the world economy maintains its growth momentum, oil prices remain range
bound, the Indian economy is undoubtedly heading towards regaining its status of fastest
growing economy I medium term.

Until 2016, India’s growth had been accelerating when growth in other countries was
decelerating. But in 2017 it has happened other way round, primarily on account of structural
reforms initiated/implemented by the government through demonetization process & GST.
The world economy embarked on a synchronous recovery, but India’s GDP growth and
indeed a number of other indicators such as industrial production, credit, and investment

30
decelerated. As anticipated, growth in the 1st half of 2017-18 has slowed down substantially
to the level of 6%, which has gradually recovered in third and fourth quarter, leading to
overall recovery of about 7.5 % in second half. In all, as per the 2nd advance estimates of
GDP that the Central Statistics Office (CSO) released recently, the growth rate of GDP at
constant market prices for the year 2017-18 is placed at 6.6 per cent, which is the lowest
growth in the last four fiscals. The slow pace of growth is largely attributed to slower growth
in agriculture to 3% in the fiscal under review from 6.3 % achieved in preceding year.
Similarly, the growth in manufacturing sector too has decelerated to 5.1%, lowest in last six
years. As a result, the farm sector, which employs the greatest number of people, has its share
to GDP falling steadily. Share of agriculture as per cent of GDP has come down to 14.8 per
cent from 15.3 per cent last year. While contribution of industries has marginally dropped to
31.04 % from 31.05% in the previous year. Even the declined growth of about 6.6 per cent
still makes India’s growth and its potential noteworthy on the map of world economy.

Indian Agriculture sector:

At the sectoral level, although growth of agriculture & allied sectors is estimated to remain
dismal @ 3.0%, since the same is predicted by CSO on limited data base available up to
Dec17, the actual growth figures may come out much higher. The optimism of achieving
higher than estimated growth rate of 3.0% stems from the fact that the Rabi 2017 has shown
much improved performance.

Demand of Urea has continued throughout the year but in a little defused manner. Unlike past
seasons, there was no any hue and cry about deficit availability of Urea in the states.
Government was also cautious on deciding Urea imports. It appears that partly because of
improved use efficiency attained through Neem coating and also general awareness created
among the farmers for balanced fertilization through soil health card campaign of
Government, supported by the promotional efforts of the industry, gradually, the glitter of
applying Urea in excess than what it is required is reducing. Moderated demand of Urea has
impacted the imports of DAP made by the Urea companies, which used to make trading of
such imports largely on the strength of higher stake in Urea segment.

All India Production, Imports & Sales of Urea, DAP & NPK (Lac MT) (Lakh MT)

31
 State Urea DAP NPK

2016- 2017- % 2016- 2017- % 2016- 2017- %

17 18 Variation 17 18 Variation 17 18 Variation

Production 242 238.6 -1 43.3 46.3 7 79.2 83.2 5

Imports 54.8 59.8 9 43.9 42.2 -4 5.2 5 -4

Sales 296.1 303.1 2 88.2 89.8 2 82.5 90.7 10

Closing
13.4 10.2 -23 5.7 2 -61 6.4 7.3 14
Stock

GUJARAT STATE FERTILIZERS:

ORDER DELIVERY LEAD TIME(AVERAGED FOR A YEAR)

The inventory is 806.41. Since this is not too large, one can conclude that CTO is followed

DELIVERY RELIABILTY:

GSFC continuously achieves and maintains prompt deliveries & services of highest standards
for every product. This claim is well substantiated by a string of National & International
Awards, but TOTAL Customer Satisfaction is the MOST VALUED AWARD at GSFC.

Thus, there is good delivery reliability.

SUPPLY CHAIN RESPONSIVENESS:

Since the fertilizers like ammonium phosphatic fertilizers are used, the products are highly
innovative in nature. Thus, responsive supply chain is used

PRODUCT VARIETY:

GSFC produces more than 24brands of fertilizers to petrochemicals, chemicals, industrial

gases, plastic fibres and other products. With this product variety they are managing other
parameters like order delivery lead-time (mentioned above).

32
SOURCING STRATEGY:

There is good profit in the year 2017-18. Thus, purchasing value is high

There is major dependency on suppliers. But there are limited suppliers for the world. Thus,
suppliers’ risk is high.

Thus, Strategic Products sourcing strategy is used.

SUPPLY CHAIN DESIGN, PLANNING AND OPERATIONS OF GUJRAT STATE

FERTILIZER

1. Facilities- With a market presence exceeding 45 years GSFC has carved out an
irreplaceable image for itself on the Indian marketing scene. Integration of
technologies and brilliant innovative research ensures that the products touch all
walks of life. From household consumer to core industrial consumer, GSFC
continuously fulfils multi-fold needs of the market. GSFC's incessant strive for
product diversification and value addition has created a product mix ranging from
more than 24 brands of fertilizers to petrochemicals, chemicals, industrial gases,
plastics, fibers and other products. GSFC has Customer Service Centers both in
Agriculture Field (AD&AS) and Industrial Field (ADC) to disseminate the latest
technical knowledge for efficient use of the Products. Dedicated chemical trading
terminal having storage capacity of 15000+ mts at Sikka (Jamnagar) under
renovation
 GSFC started with a commitment of twin objectives of selling the fertilizers
and services for improving productivity of various agricultural activities for
overall development.
 Immediate solution & advice to the farmers on various day to day problems
faced by farmers related to agriculture practices, pest, diseases & their
control etc. through telephone.
 To improve use-efficiencies of Water, Energy, Nutrient and Human
Effort in Agriculture.
 To extend the benefits of irrigated agriculture to more people with the
available water.

33
  To facilitate better crop management through Fertigation and
Chemigation
 Numbers of crop demonstrations and special trials have been conducted on
farmers' fields to demonstrate the importance of chemical fertilizers, their
efficient utilization, Bio-fertilizers, new varieties, Tissue Culture plants,
Urea, Gypsum and Zinc and Biological inputs etc.
 establish its own NURSERY for maintaining greenery and supply of plants
for encouraging awareness for clean environment to society. Horticulture
Nursery was started with establishment of Chemical Plants right from
beginning.
 Gujarat State Fertilizers & Chemicals Limited is having a state of the art
Soil & Water Testing Laboratory established in1969 and providing Soil
testing (for Macro & Micro nutrient) & Irrigation Water testing services.
One Mobile Soil testing cum Audio-visual Van is also working &
providing services of Soil & Irrigation water testing at the doorstep of the
farmers and guide them regarding balance use of fertilizers, suggest
reclamation measure for saline and alkaline soil & also guide regarding
use of saline water by testing the quality of Irrigation water through
computerized recommendation reports.
 GSFC is also providing Potable Water Testing Services for the people to
know the quality of their drinking water.
 During this period, GSFC diversified into new chemicals like MEK-Oxime
and other raw materials such as Phosphoric Acid, Potassic Acid, etc. It also
diversified and increased significantly its Fertilizers portfolio. Its Fertilizers
manufacturing capacity today stands at 1.7 Million Ton
2. Inventory- Concentrated effort are initiated to economize the cost, especially
logistic & Inventory management of the company product. With a view to remain
More market centric and large access to the market the effect of inventory
performance on profitability of the firm. It also investigates the impact of gross
margin, capital intensity, firm’s size and growth on inventory performance.
 Flow of materials from their sources through necessary processes including
their storage, retrieval and the delivery of raw materials.
 Flow of finished goods from the factory to the end user in the
distribution channels.
34
  Flow of money including advances from organizations to suppliers of raw
 Materials etc.

3. Transportation & logistics- GSFC intends to invite expression of interest from

reputed & professional Transport Contractors to enlist “Registration” for execution
of transport related works handled by Marketing Department at Rozy Port,
Jamnagar (inside, outside port Limit, & from nearby WH at Rozy/ Jamnagar near
wind mill godown) for Transportation of Neem coated Urea/ Other fertilizers to
Various destinations (depots & WH) at all districts of Gujarat and the state of
Rajasthan & MP. “The list of approved transport contractors” of GSFC for
submission of tender immediately and the rates shall have to be quoted for all the
destinations (depots & WH) without any choice for all the districts of Gujarat and
separately for state of Rajasthan & Madhya Pradesh. Evaluation and empanelment
of transporters shall be carried out on the basis of the details submitted in the
application
4. Sourcing-Sourcing and large amount of inputs as most of the raw materials are
sourced directly from large scale manufacturers in India and outside India Sourcing
of Jatropha selections from 4-5 different Argo-climatic Zones sourcing of different
integrated pest management inputs cuttings as planting material & transplantation
parameters
5. Distribution Network-
Unit-wise Plant locations
The company units are as follows
Baroda Unit Fertilizer nagar, Nandesari Vadodara, fibre unit at Kuwarda and sikka
unit moti khawdi
Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Nagercoil, Nasik,
New Delhi and pune

35
COMPARATIVE ANALYSIS OF THE INDUSTRY
Table(1):

The equity share data given in the above table shows the comparative study of Gujarat state
fertilizers and coromandel international limited.

Generally, a high P/E ratio means that investors are anticipating higher growth in the future.
Coromandel international has a higher p/e ratio, implies a high P/E ratio indicates that investors
expect higher earnings. However, a stock with a high P/E ratio is not necessarily a better
investment than one with a lower P/E ratio, as a high P/E ratio can indicate that the stock is
being overvalued.

The price to book ratio compares a company's market value to its book value. ... Traditionally,
any value under 1.0 is considered a good P/B value, indicating a potentially undervalued stock.
However, value investors often consider stocks with a P/B value under 3.0. Gujarat state
fertilizers has a ratio 0.8, which is good for the company. Coromandel international has a ratio
of 4.2, which is of concern.

36
The dividend yield or dividend-price ratio of a share is the dividend per share, divided by the
price per share. It is also a company's total annual dividend payments divided by its market
capitalization, assuming the number of shares is constant. It is often expressed as a percentage.

Gujarat state fertilizers has a better dividend yield ratio compared to coromandel international.

Table(2):

The net sales of Gujarat chemical state fertilizers is lesser than net sales of coromandel
international.

The gross profit margin is higher for coromandel international.

The effective tax rate is the average rate at which an individual is taxed on earned income, or
the average rate at which a corporation is taxed on pre-tax profits. The effective tax rate for
coromandel international is very high, which implies that the net profit margin will be low for
the company.

Table(3):

37
Generally, a high P/E ratio means that investors are anticipating higher growth in the future.
The current average market P/E ratio is roughly 20 to 25 times earnings. Coromandel
international has very high p/e ratio compared to Gujarat state fertilizers.

Mobility for Sales and Supply Chain for Coromandel International

Coromandel International Limited, India’s second largest phosphate fertilizer player, is in the
business segments of fertilizers, specialty nutrients, crop protection, and retail. The company
manufactures a wide range of fertilizers and produces around 2.9 million tons, making it a
market leader in the industry.

Reduction in delivery time and order time:

Before adopting the iNotify solution, activities like sales and purchase orders were reported
manually via mail and then forwarded to the area office. Once received, the warehouse would
enter the related information concerning delivery (creation and status), GR (by rail, road) and
stock status manually. This data was then sent by either email or by post. The entire process
took 10 to 15 days to complete.

The iNotify mobile enterprise application platform was deployed to be accessed by their sales
officers and warehouse agents. This enabled people on the move to access ERP, which
increased their sales productivity and enabled effective and optimized inventory allocation and
automated railhead clearing.

After implementation of iNotify-based solutions, CFL is able to capture sales to their dealers
effectively, allowing and improved order-to-cash cycle. Sales officers have access to real-time
information about warehouse stock levels, dispatches, etc. which help them to improve
customer satisfaction. Inventory allocation to warehouses was effectively done along with
automation of railhead clearing.

Mobility for Sales and Supply Chain for Gujarat state fertilizers and chemicals limited

Recently, the company has entered into new market of Himachal Pradesh and also
contemplating to start business in Uttarakhand from current season besides consolidating its
presence into existing markets so as to expand overall volumes. Concerted efforts are initiated
to economies the cost, especially logistic & inventory management of our products. With a
view to remain more market centric, our access to the market has been accelerated during the
year under review.

38
Special promotional efforts are initiated for enhancing our brand preference in the market.
Focused campaigns are organized to promote Sulphur based fertilizers and NPK products in
various states. Stringent monitoring and close follow up for recovery of out standings in the
market, deployment of special chasers in some of the states having higher stake in over dues
and also following up with GoI for pending subsidy bills on daily basis has helped us to recover
major amount and sustain cash flow.

Aiming to reduce the freight cost of farmers on fertilizers and ensure timely availability of
fresh and quality material, company has launched “Door to Door” (D2D) delivery scheme in
Gujarat on experimental scale, wherein fertilizers are supplied to the farmers in truck-loads
free of freight cost within stipulated timeline, which has been well received by the farming
community. Company through its retail arm GATL has also opened up first urban outlet at its
corporate office and planning to expand the numbers specially to satisfy the multiple needs of
urban customers.

Reduction in Delivery time

A fertilizer vending machine has been installed at Vadodara so as to facilitate purchase of

required quantities of fertilizers in loose by the kitchen garden lovers as well as small and
marginal farmers. Company has entered into special MoU with M/s Hindustan Petroleum to
set up such vending machines at various strategic outlets of HP in a phased manner.

Special software developed by the company provides details to the farmers on necessity for
applications of various fertilizers with different cost options, once farmer get the soil sample
analysed through GATL outlets. On biotechnology front, company has started developing TCB
entrepreneurs which will help in generating rural employment, besides furthering up business
opportunities for Tissue culture-based plants.

39
CHALLENGES
 The reality of the fertilizer market is currently weak demand and oversupply, with crop
prices also low. Global fertilizer demand is expected to grow by an average of 1.6% per
year over the next five years, according to IFA estimates Jawahery said. Meanwhile,
structural overcapacity for urea, phosphoric acid and potash is expected. Global
capacity growth of 12% is expected between 2016 and 2020, assuming that projects are
realised as scheduled.
 Urgent need to bridge increasing demand and supply
A high growth can be achieved only by substantially increasing the productivity of land
which can come through efficient utilization of land area and to meet the challenges of
the demand and supply.

40
REFERENCES

 https://coromandel.biz
 https://coromandel.biz/AR_DigitalVersion/2017-18/content/garden3/management-
discussion-and-analysis.html
 https://coromandel.biz/pdf/2018-2019/AnnualReport2017-2018.pdf
 https://www.gsfclimited.com/aboutus.asp?mnuid=1&fid=1#f3
 https://en.wikipedia.org/wiki/Gujarat_State_Fertilizers_and_Chemicals
 https://www.indiainfoline.com/company/gujarat-state-fertilizers-chemicals-
ltd/management-discussions/226
 https://www.moneycontrol.com/financials/coromandelinternational/balance-sheet/CI45
 https://coromandel.biz/products.html
 https://economictimes.indiatimes.com/coromandel-international-
ltd/finishedproducts/companyid-13851.cms
 https://gsfclimited.com/products.asp
 https://www.moneycontrol.com/financials/gujaratstatefertilizerschemicals/balance-
sheet/GSF
 https://gsfclimited.com/products.asp
 https://economictimes.indiatimes.com/gujarat-state-fertilizer-&-chemicals-
ltd/directorsreport/companyid-13678.cms

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