lLRTlLlSLR l^DUSTRY l^ l^DlA

Abhishek | Amitam | Anirban | Chaitanya | Geetansh

| Mohan | Nishit | Sumit
8ec 8 Grou 1
Industry Ana|ys|s
resenL MarkeL Scenarlo
Agenda
!resent Industry Scenario !resent Industry Scenario
,a[or |ayers |n the Industry ,a[or |ayers |n the Industry
O India's Crop productivity is beIow the worId average
O India's food production for 2009-10 pegged at 235 MMTs and growing at 4%.
O India became worId's second Iargest fertiIiser consumer at 25.3 MMTs.
O India's imports of fertiIisers for 2009-10 pegged at 18MMTs.
Cvop Pvoductivity
!resent Industry Scenario
!resent Industry Scenario
nnual consumpLlon of ferLlllzers ln nuLrlenL Lerms (n k ) has lncreased from 07 lacs M1 ln
193132 Lo ||||on ,@ 200809
SLagnanL roducLlon ln Lhe lasL decade
lncreaslng dependency on lmporLs
MounLlng Subsldy burden
,a[or |ayers |n the Industry
CO
I%
Covomandc!
ntcv
Ii%
R C
II%
Nat!.cvti!izcv
Io%
Zuavi
nds.
%
G S C
%
Chamba! cvt.
%
G N C
%
Kvishak
Bh.Co-op
%
A C T
%
Othcvs
I%
CO
Covomandc! ntcv
R C
Nat!.cvti!izcv
Zuavi nds.
G S C
Chamba! cvt.
G N C
Kvishak Bh.Co-op
A C T
Othcvs
Scctov Capacity !akhs MT %agc Shavc
Nitvogcn Phosphatc Nitvogcn Phosphatc
Pub!ic # ## ###
Coopcvativc ## ### ## ###
Pvivatc # ### # ##
Iio.I . Ioo Ioo
Scctov -wisc and Nutvicnt wisc nsta!!cd Capacity oI cvti!izcv ManuIactuving Units as on Jan-ioo
MAN SUPPLY
eand for fert|||zers coes fro
agr|cu|ture
Constra|nts Govt contro| shortage of natura| gas
h|gher cap|ta| |nvestent
eand d|rect|y ||nked w|th food
consupt|on
GoI contro|s ex|st|ng and new capac|ty
|port quant|t|es reta|| pr|c|ng d|str|but|on
|nputs subs|dy key anufactur|ng ent|t|es
Grow|ng agr|cu|ture y|e|d |esser |and
under cu|t|vat|on
Shortage of natura| gas creates pressure on
supp||es
eand expected to grow at CAGk of 3
4
Gas f|nd|ngs at kG 8as|n w||| he|p supp||ers can
reduce governent subs|d|es by over ks 30
b||||on
Governent contro| reduc|ng w|th decontro|
through I (|port pr|ce par|ty)
eandSupp|y Scenar|o
Feiiilizei
Secioi
Raw
Matcvia!
Pvoduction
Capacity
Agvicu!tuvc
Scctov
Govcvnmcnt
Po!icics
ntcvnatio
na!
Mavkct
actors affecting ertiIizer Industry
r|ces of the fert|||sers are
f|xed a|| season
Industry |s at atur|ty stage
I|xed Costs are too h|gh
Cn|y product d|fferent|at|ng
factor |s on|y the ua||ty
!orter's ive orces
SUPPLR POWR
BARRR TO NTRY
BUYR POWR
kaw ater|a| |s short
of supp|y
Concentrat|on |s |ow
n|gh cap|ta| requ|reents
kegu|ated governent
po||c|es
keputat|on of ex|st|ng
f|rs
Spectru of subs|d|es on
fert|||sers ava||ab|e
8uyers can |pose
pressure on the governent
to prov|de subs|dy
8|ofert|||zer no harfu|
env|ronenta| effects cheap
to produce and |t a|so enhance
the fert|||ty of the so||
Iert|||sers are ade ava||ab|e
|n for of subs|d|es
SUBSTTUTS
H G H
H G H
M U M
L O W
RALRY
L O W
SWOT AnaIysis
1he players operaLlng ln Lhls secLor are
flnanclally sLrong
CovL supporL ln Lhe form of subsldy
Low CosL labour
Peavy demand
n agro based economy
STRNGTHS
lmproper feedsLock avallablllLy
8lslng global prlces of feedsLock
LoL of CovernmenL lnLervenLlon Lo sLablllze
Lhe prlces
uncerLaln pollcy sLrucLure Lhereby hurLlng
proflLablllLy of manufacLurers
Puge dependence on ralnfall for agrlculLure
uelayed cash flows of Lhe flrms
THRATS
s Lhe demand ls hlgh compared Lo supply
ferLlllzer secLor has an opporLunlLy Lo
expand capaclLy Lo fulfll Lhe local demand
LxporL due Lo global demand
lnLroducLlon of 81 crops
rlce ueregulaLlon leadlng Lo lncreased
marglns
OPPORTUNTS
Low capaclLy as compared Lo demand
(demand supply Cap)
Plgh lnlLlal CaplLal lnvesLmenL ls requlred
Plghly regulaLed lndusLry wlLh govL
lnLervenLlon
Lack of awareness regardlng proper usage of
ferLlllzers
WAKNSS
SWOT i-Matrix
Oppovtunitics Thvcats
Stvcngths
|ayers f|nanc|a||y strong
demond is hiqh expond
copocity
Govt support |n the for of
subs|dy uncertoin po/icy structure
neavy deand
6ovt stobi/ites the prices
Wcakncss
eand]supp|y gap
niqh lnitio/ copito/
Investment is required
n|gh In|t|a| Cap|ta| Investent
unovoi/obi/ity of feedstock
n|gh In|t|a| Cap|ta| Investent
kisinq prices of feedstock
n|gh In|t|a| Cap|ta| Investent
Lot of 6ovt intervention
n|gh|y regu|ated |ndustry
uncertoin po/icy structure
'aIue Chain AnaIysis
lnbound Logistics
|nbouno materlal
banollng, |nspectlon,
oellvery
%0chnoIogy
R & D ot low cost ano comple tertlllzers,
stuoy ot alternatlves, testlng, energy
management
Market researcb, Sales Alos
HRM
Low Labour Cost driving
nargins
Procur0n0nt
Feeostock ano materlals,
transportatlon servlces
Outbound Logistics
Oroer Processlng &
Sblpplng
Op0rations
Proouctlon, malntenance,
tacllltles operatlon, Quallty
Control
Mark0ting & 5aI0s
Promotlon, Sales Force
ano Aovertlslng
ecision making framework
ldenLlfy key
sttoteqlc foctots
ormulaLe Lhe Lype
of Lhe sLraLegy
8elaLlve
aLLracLlveness of
varlous sLraLegles
I atr|x
II atr|x
SWC@ ana|ys|s
Space ,atr|x
S,
QSPM - Quantltatlve Strateglc Plannlng Matrl
Tbe Quantltatlve Strateglc Plannlng Matrl ls a strateglc tool wblcb ls useo to evaluate
alternatlve set ot strategles. Tbe QSPM lncorporate earller stage oetalls ln an organlze way to
calculate tbe score ot multlple strategles ln oroer to tlno tbe best matcb strategy tor tbe
organlzatlon.
ecision making framework (QS!M)
4/ternote 1 4/ternote 2
(Acqu|re Copet|tor) (xpand Interna||y)
key factors We|ght
Attract|veness
scores @AS We|ght
Attract|veness
scores @AS
Strengths
1 lnanclal SLrengLh 01 4 04 01 3 03
2 8rand and lmage 013 3 043 02 1 02
3 MarkeLlng SLrengLh 02 2 04 02 3 06
4 Workers unlque Sklll seL 01 1 01 01 2 02
3 lncreaslng work producLlvlLy 01 2 02 003 3 013
Weakness
1 Lack of quallLy 01 3 03 01 1 01
2 oor markeLlng and sales 01 2 02 01 1 01
3 osslble acqulslLlon 003 1 003 003 0 0
Su we|ghts 00 00
Cpportun|t|es
1 new or emerglng markeL 02 4 08 01 2 02
2 prlce deregulaLlon 013 1 013 013 3 043
3 CapaclLy Lxpanslon 01 2 02 02 3 06
@hreats 0
1 lncreaslng compeLlLlon ln markeL 01 4 04 01 3 03
2 uemand LlasLlclLy 013 1 013 013 1 013
3 ollcy changes 02 1 02 02 1 02
4 unfavourable Laxes 01 1 01 01 1 01
Su we|ghts 00
40
00
36
O Feiiilisei policy las been made wiil an aim of aclieving ile maximum degiee of
self- sufficiency in ile pioduciion of feiiiliseis based on uiilisaiion of
indigenous feedsiocl and io ensuie availabiliiy of feiiiliseis io ile faimeis
O le subsidy is passed on io ile faimeis in ile foim of subsidised MRPs
Pvcvious Po!icy stvuctuvc: RPS (Rctcntion Pvicc Schcmc)
O Subsidy = Sale piice (faim gaie piice plus iaxes) - Reieniion piice (ile cosi of
pioduciion + a ieasonable ieiuin on nei woiil)
O Subsidy is also paid on impoiied feiiilizeis in oidei io biidge ile diffeience
beiween ile cosi of inpuis and ile siaiuioiily fixed consumei piice
O Cuvvcnt conccvns Iov Icvti!iscv manuIactuvcvs
O uiieni policy foi capaciiy expansion wiil ligl flooi piice males invesimeni
less aiiiaciive foi expansions oilei ilan de-boiilenecling
O No fiim allocaiion of naiuial gas is cieaiing pioblems in financial closuie of
expansion Piojecis
O No capiial subsidy io uniis swiicling fiom Naplila io naiuial ga:
!oIicy Structure
Govt has notified Nutrient Based Subsidy (NBS) policy effective from
April1,2010. The Salient features of NBS policy are:
O Subsidy is fixed based on the import parity price adjusted for MRP. "P based
on DAP , "N based on Urea and "K based on Potash and "S based on
Sulphur
O MRP is deducted from the import parity price to arrive at the Subsidy
payable per nutrient
O Under the NBS Policy, MRP has been decontrolled;
-ew -utr|ent 8ased Subs|dy
A W|nW|n ropos|t|on of -8S
NBS NBS
GO GO
ndustvy ndustvy
avmcvs avmcvs
Access to new products
and technoIogies
Strong Brand image
Intensive Extension
activities
Certainty in Subsidy amount
Reduction in Subsidy outgo
Ioru|at|ng Strategy for Cha||enger
Copany @ota| Sa|es
(,@)
,arket
Share
IIICC 8198 1373
Coroande| Int| 6477 38
k C I 364193 1082
-at|Iert|||zer 309134 977
2uar| Inds 427734 821
G S I C 40168 771
Chaba| Iert 33743 686
G - I C 261443 302
kr|shak 8hCoop 233912 491
I A C @ 214161 411
Cthers 736043 1430
@ota| 3212831 10000
Coroande| Internat|ona| L||ted
esLabllshed ln 1961 ls lndla's second largesL
producer of hosphaLlc erLlllzers
ln 2010 Coromandel reporLed 1 of
8s4682 mllllon on a Lurnover of 8s63268
mllllon or Lhe half year ended Sep 2010Lhe
company reporLed 1 of 8s 4716 mllllon on a
Lurnover of 8s 43676 mllllon
stronq 4qri p/oyer servlng Lhe lndlan farmers
by supplylng quallLy grl lnpuLs and provldlng
Llmely advlce
2nd largesL player ln hosphaLlc segmenL
SLrong operaLlonal focus hlgher efflclencles
6rown 5 times over the /ost 7 yeors
8us|ness Structure
Strateg|c |rect|on
koadap Coroande|
Conso||date
raw ater|a|
supp|y
|vers|fy |nto
va|ue added
nutr|ents
8u||d a|ternate
|ow cost
subst|tute
Iprove
,anufactur|ng
ff|c|enc|es
8ackward
|ntegrate
kock
Aon|a
Cne stop
so|ut|on for
Ind|an
farers
Wea|th
creat|onShare
of farers'
pocket
eace fro
pestsIar
noe
Copet|t|ve Ana|ys|s Industry Ana|ys|s
CosL leadershlp
1 8arrlers Lo enLry 3
MarkeL Share
2 CrowLh oLenLlal 4
8rand and lmage
3 cess Lo flnanclng 4
MarkeLlng SLrengLh
2 ConsolldaLlon 4
verage
37
I|nanc|a| Ana|ys|s nv|ronent Ana|ys|s
8C 4 lnflaLlon 3
Leverage 3 ollcy Changes 4
LlquldlLy 4 uemand and elasLlclLy 3
Cash flow 4 8lvalry 3
verage
4 3
Coroande| I]II ana|ys|s
our tota| kax|s score 7
our tota| ax|s score 00
& Source Croup nalysls
+1 +2 +3 +4 +3 +6
lS C
S
LS
6 3 4 3 2 1
+1
+2
+3
+4
+3
+6
3
4
3
2
1
6
Aggress|ve
Copet|t|ve
Conservat|ve
efens|ve
Space ,atr|x
(+7 +)
ggresslve
ey Strategic Shift
komp up vo/umes from 29 Lo 4 mn M1s
5trenqthen supp/y choin and mulLlply value
wlLh new !v for mmonla supplles
Modificotion/lmprovements ln exlsLlng planLs
Move to morket /eodership ln MaharashLra
karnaLaka and 1n and malnLaln leadershlp ln

New lvs Lo expand global fooLprlnL

Iert|||ser product|on
%nuLrlLlon and Crop proLecLlon managemenL
%lnnovaLlve llfe sLyle producLs
%arm mechanlsaLlon servlces
%CusLomlsed ferLlllsers
%CuLpuL markeLlng
%xponded Product offerinqs Lhrough !v wlLh
global ma[or
New product lnLroducLlon as per farmers
needs
%vo/ue odded products Low grade poLash
%ManufacLurlng capablllLy for Mlcro nuLrlenLs
Spec|a|ty -utr|ents
%4cquisitions Lo power growLh Cos / 8rands
%lncreased 8u focus
%controct monufocturinq wlLh MnC's
%MarkeLlng excellence / 8eLall Lo power
domesLlc growLh
%resence ln Pousehold/ nlmal PealLh
%Large volumes / compllmenLary producL range
ln acqulslLlons
|ant rotect|on
4ction coromonde/ lnt/ needs to fo//ow on oqqressive opprooch to become o /eoder in
ferti/iter industry ond expond into newer businesses mokinq use of componys strenqths
keta||
Concluslon
keferences
12/12/2011 SecLlon 8 Croup 1
27
@ nA-k CU