IFFCO posts highest-ever production, sales and profit: Dr U S Awasthi
First IFFCO group company, ICPL to go public with IPO for its power venture
By Deepak Arora
Pix By Noyanika Arora
NEW DELHI, July 6: IFFCO Chhattisgarh Power Limited (ICPL) is all set to go public for its power project with an Initial Public Offer (IPO). This is the first IFFCO group company that will approach the equity markets for mobilizing funds from the investors.
The largest global cooperate IFFCO has achieved robust growth with about 80 percent increase in profit before tax at 1025 Crores, highest ever production of 85 lakh tonnes, sales of 125 lakh tones of fertilizers and sales turnover of Rs. 21195 crore during 2010-11, according to Dr U S Awasthi, Managing Director of IFFCO.
ICPL is a joint venture between multi-billion dollar cooperative giant, IFFCO and Chhattisgarh State Power Holding Company Ltd.
After getting the recent go ahead for stage one forest clearance to mine the Tara coal block from Ministry of Environment and Forests, the Rs. 7544 Crore, 1320 MW thermal power project is now on takeoff stage. Private land acquisition has been completed and with all statuary clearances in hand, the project is expected to commence production by 2015.
Speaking to newsmen here on Wednesday, Dr US Awasthi, Managing Director, IFFCO said, “We were awaiting the forest clearance. All preparatory work for setting up this mega power project has been initiated. In sync with our strong commitment towards
farmers and cooperatives, we shall offer 5-10 percent discount to retail investors, farming community, cooperators and people of Chhattisgarh participating in our public offer, subject to approvals by the market regulator.”
On JIFCO, Dr Awasthi said that despite the tumultuous political environment in Middle East, all project and financing agreements for the syndication of debt US $ 335.5 million were completed last month. International Finance Corporation (IFC) and European Investment Bank (EIB) are lead arrangers for the debt. The project is expected to begin commercial production by mid-2013.
Jordan India Fertilizer company, IFFCO’s joint venture with Jordan Phosphate Mines company ltd. (JPMC) is setting up a phosphoric acid plant with annual capacity of 4,75,000 tonne phosphoric acid at Eshidiya in Jordan.
Largest global cooperate IFFCO has achieved robust growth with about 80 percent increase in profit before tax at 1025 Crores, highest ever production of 85 lakh tonnes, sales of 125 lakh tones of fertilizers and sales turnover of Rs. 21195 crore during 2010-11.
"We have achieved robust growth in 2010-11 fiscal as profit after tax rose to Rs 792 crore from Rs 401 crore in the previous year," said the Managing Director.
He said the turnover has increased by 26 per cent to Rs 21,195 crore in the financial year 2010-11 as against Rs 16,808 crore in the previous fiscal. Iffco sold 125 lakh tonne of fertiliser last year. Its fertiliser production reached an all-time-high of 85 lakh tonne in 2010-11, he added. Out of 85 lakh tonnes of fertilisers, urea production was 44 lakh tonne and di-ammonium Phosphate (DAP) and other complex fertiliser at 41.7 lakh tonne.
Prestigious 'Green Leaf Award' from 'International Fertiliser Association (IFA)' for excellence and innovation in safety, health & environment is a feather in IFFCO’s crown. The award was presented at the IFA SHE Roundtable held in Bruges, Belgium.
On the Energy front, IFFCO’s plants have exhibited excellent performance by attaining lowest composite energy consumption of 5.814 Gcal per MT of urea.
On potash mining project in Bayovar, Peru promoted by API through its subsidiary Growmax Agri Corporation, Dr. Awasthi said, “The feasibility report of project with 0.25 million tonnes capacity of potash per annum is completed”.
API has also commenced exploratory drilling in Bayovar, Peru for phosphates. Its subsidiary, Petrogras Argentina S.A has acquired significant interest in shale gas blocks in Neuquen basin in Argentina. API drills first vertical shale gas well in Argentina Production of crude oil from Neuquen basin has already commenced in 2010.
Dr. Awasthi said that IFFCO always strives to maintain a balance between capital gains and societal development as “we believe that the two are mutually inclusive”.
During the last fiscal, IFFCO’s Save the Soil campaign with emphasis on ‘Soil Rejuvenation and Crop Productivity Enhancement’ gained momentum. Focus of the campaign is to improve soil health through balanced fertilization of the soil and thrust is on educating the farmers about ingenious fertilisation techniques like soil testing, crop rotation, green manuring, use of vermi compost etc.
Enlightening success of the Project, Dr Awasthi said, “The results that we have seen has been a source of encouragement for us. The farmers have witnessed an average increase of 25 percent increase in their yield and in some cases the increase has been 200 percent in the same patch of land, when the farmers used techniques suggested by IFFCO”.
He further added, “The soil health in our country has been deteriorating at an alarming pace over several decades. As a farmers’ organization, we believe that it’s our duty to come to their rescue. We could foresee the extent of damage this would have caused if it wasn’t checked at the earliest and this is what prompted us to start this project and seeing the positive results, we will now replicate this in other parts of the country”.
He appealed to the farmers to reduce the use of chemical fertilizers and amalgamate traditional methods of soil nourishment with chemical fertilization.
On investment in National Collateral management Services Ltd. (NCMSL), he said IFFCO has invested Rs. 23.75 crore as fresh equity and is now the largest shareholder with equity stake of 20.64 percent. IFFCO has thus acquired status of key shareholder in NCMSL.
“NCMSL is setting up its own warehouses across the country with an investment of Rs. 300 Crore for catering to enhancing storage capacities. This reflects our interest in promoting agriculture and its allied activities,” said Dr. Awasthi.
Legend phosphate project is strategically vital for IFFCO keeping in view the limited sources of rock phosphate worldwide. Dr. U.S Awasthi said, “Legend has obtained mining lease in significant blocks of Paradise North mines in April-2011. It earlier got mining lease in blocks of D-Tree North Rock Phosphate mines in August 2010 and mining lease for Paradise South is expected by the first quarter of 2012”.
Dr. Awasthi added, “Considering its strong commitment to the farming community and its farmers members, IFFCO continues to look for opportunities to enhance fertilisers availability and this venture will be part of backward integration strategy.
“IFFCO Kisan Special Economic Zone (SEZ) at Nellore, Andhra Pradesh, is one of our ambitious projects and we are very optimistic that the project is on track and we are in the process of scouting for investors and industries to set up their facilities at the SEZ” said Dr. Awasthi.
Final Environment Clearance for SEZ has been received along with all State Government approvals except for Master Plan which is expected in July, 2011. Project Proposals have been received and under consideration relating to Aqua Food processing, Particle boards Poultry project, Logistics Infrastructure & storages and Vegetable & Fruits processing unit.
The profit after tax of IFFCO Kisan Sanchar Ltd. for the year 2010-11 reached 12.85 Crores. IKSL received the "Coffey International Award” for "Example of Excellence" for its mPower: a unique mobile service empowering farmers through timely information delivery. This is an award to an organisation for demonstrating a positive impact against one or more of the United Nations Millennium Development Goals. This Award is instituted by the "Business in the Community (BICT)".
Highlights for 2010-11:
• IFFCO Aonla Unit was conferred with 'Green Leaf Award' from 'International Fertiliser Association (IFA)' for excellence and innovation in Safety, Health & Environment at the IFA SHE Roundtable, held in Bruges, Belgium.
• Production of new innovative customized products like 100 percent water soluble fertilizers, Urea phosphate and products like Urea Ammonium Phosphate, Neem Coated Urea has been started.
• For the Kalol expansion project of annual capacity of 1.4 Million tonnes Urea Plant with an investment of about Rs. 4660 Crore, environment clearance and other statutory approvals have been accorded.
• A new marine cargo terminal at Paradeep unit is proposed to enhance the transportation of fertilisers.
• A new project of Barge jetty at Kandla unit is proposed to handle solid raw materials and imported fertilisers. .
• CRISIL has given the GVC rating at “GVC Level 2”. This indicates that the capacity of the society with respect to wealth creation for all its stakeholders, while adopting sound & effective corporate governance practices, is high.
ATA Carnet a boon for exporters and exhibitors
NEW DELHI, July 2: ATA Carnet offered by Federation of Indian Chambers of Commerce and Industry (FICCI) has turned out to be a boon for exporters and exhibitors. Exporters who have to carry large number of samples when they travel abroad as part of sales promotion campaigns in the past faced lot of difficulties while getting custom clearances in foreign lands. Not only they wasted lot of time in getting customs clearance they also had to offer bank guarantee or bond to ensure that the goods will be carried by them on their return journey. This was a very cumbersome process.
With an ATA Carnet they are able to clear through green channel acting as a passport for goods acceptable in most of the countries. One of the biggest benefits of carnets is that it eliminates the need to spend time to complete all the different paperwork for customs clearance in India and overseas. It also saves you money, as there’s no need to put down a ‘bond’ each time you enter a foreign country. This has made life much easier for exporters and exhibitors.
Carnet used mainly for taking goods to overseas exhibitions, demonstrations, to ease the customs paperwork when professional equipment is needed overseas or for sales people to carry around valuable commercial samples. It directly helps the exporters in the country by encouraging them to participate in international trade fairs/ exhibitions and by undertaking business promotion tours. Without a carnet, it would be necessary to go through customs procedures established in each country for the temporary importation of goods.
The key benefit using an ATA Carnet is that it is valid for six months to a year and for multiple trips and a single document is enough for clearing goods in different countries. Not only does it allow exhibitors/business travelers to enter foreign countries temporarily without paying duties or taxes, it allows them to do so in 71 carnet countries and territories throughout the period of its validity.
In India, the sectors that draw utmost advantage of this system are the Media-Entertainment and the Gems and Jewellery, especially so as the invoice value in both the cases is very high and a lot of time and effort can be saved through carnet.
In the Indian jewellery industry, some of the prominent companies like Ganjam Nagappa & Son Pvt Limited, Bapalal Keshav Lal, Gili India Pvt Limited are the regular users of ATA Carnet. They have taken jewellery samples under Carnet number of times for their exhibitions/business promotion tours abroad and had hassle free trips. The recent International Jewellery Shows like Hong Kong International Jewellery Show 2011, JCK Las Vegas Show 2011 etc. have attracted several jewellery companies across India to opt for ATA Carnet.
Likewise, in the entertainment and media industry, several production houses including the likes of Dharma Productions, Shree Ashtavinayak Cine Vision Limited, Kunal Kohli Productions Pvt Limited, Excel Entertainment Pvt. Limited, NDTV etc are regular carnet users. These companies have taken expensive shooting equipments under ATA Carnet with them while traveling abroad for shooting and didn’t have to pay any duty in any of the country they visited.
Recently NDTV has taken Carnet to countries like USA, Canada, Japan and UK for its famous programme called ‘NDTV-Toyota Greenathon’. Scheduling the shoot/business meetings in more than one country would mean executing a fresh bond/bank guarantee in each of the countries which can be quite time consuming as well as annoying. As the Carnet allows multiple country visits during its validity period, no doubt, all over the world, it is the most preferred way of carrying goods on a temporary basis.
When doing business in this fast-paced world, the temporary import and export of your goods between countries can add unnecessary hurdles – but an ATA Carnet from FICCI puts your business in the fast lane.
As the approved body in India to issue ATA Carnets, FICCI has helped countless businesses transport a range of goods all over the world and back. Furthermore, FICCI ensure your business meets the relevant requirements and compliance codes of the carnet system and stay in constant contact with the Indian Customs and all the partner chambers in the network countries.
So whether it’s exhibition displays or filming equipment, testing equipment or scientific tools – FICCI is your one-stop carnet resource in India.
France's Christine Lagarde named first woman IMF chief
WASHINGTON, July 1: French Finance Minister Christine Lagarde was elected as the first woman head of the International Monetary Fund, succeeding Dominique Strauss Kahn, who resigned last month after being arrested on rape charges.
Lagarde, 55, is the first woman named to the top IMF post since the institution's inception in 1944. "The Executive Board of the International Monetary Fund (IMF) today selected Christine Lagarde to serve as IMF Managing Director and Madame Chairman of the Executive Board for a five-year term starting on July 5, 2011," an official IMF announcement said.
The IMF said the selection of Lagarde by the 24-member Executive Board, representing the IMF's 187 member countries, brings to conclusion the selection process initiated by the Executive Board on May 20.
During the process the Board met with Agustin Carstens of Mexico and Lagarde the two aspirants for the post. She also won support from Europe, China and Russia.
"Based on the candidate profile that had been established, the Executive Board, after considering all relevant information on the candidacies, proceeded to select Lagarde by consensus. The Executive Board looks forward to Ms Lagarde effectively leading the International Monetary Fund," it said.
"The IMF has served its 187 member countries well during the global economic and financial crisis, transforming itself in many positive ways. I will make it my overriding goal that our institution continues to serve its entire membership with the same focus and the same spirit," said Lagarde.
Lagarde said she was honoured and delighted by her appointment. "I am deeply honored by the trust placed in me by the Executive Board. I would like to thank the Fund's global membership warmly for the broad-based support I have received. I would also like to express my respect and esteem for my colleague and friend, Agustn Carstens," she said in her first official statement.
Lagarde also has had an extensive and noteworthy career as an anti-trust and labour lawyer, serving as a partner with the international law firm of Baker & McKenzie, where the partnership elected her as chairman in October 1999. She held the top post at the firm until June 2005 when she was named to her initial ministerial post in France.
Lagarde has degrees from Institute of Political Studies (IEP) and from the Law School of Paris University, where she also lectured prior to joining Baker & McKenzie in 1981.
She takes over at a tumultuous time when emerging nations want a greater voice at the IMF and the organisation's reputation has been tarred by a scandal involving Dominique Strauss-Kahn. Strauss-Kahn resigned last month after being charged with sexually assaulting a New York City hotel housekeeper.
India-Malaysia FTA comes into effect
NEW DELHI, July 1: The free trade agreement between India and Malaysia will come into force from Friday, giving Indian professionals like accountants, engineers and doctors access to the key South-East Asian nation.
In addition, exports of items of considerable interest to India, like basmati rice, mangoes, eggs, trucks, motorcycles and cotton garments, will attract lower or no duty in Malaysia with the implementation of the Comprehensive Economic Cooperation Agreement (CECA), according to a statement of the Commerce Ministry issued in New Delhi on Thursday.
It said sensitive sectors like agriculture, fisheries, textiles, chemicals and automobiles have been given protection from imports without duty or with significant cuts.
The CCEA will facilitate temporary movement of business people, including contractual service suppliers and independent professionals in accounting, architecture, engineering services, medical and dental, nursing and pharmacy, computer services and management consulting.
The agreement will also help boost cross-border investment between the two countries, which achieved bilateral trade of USD 10 billion in the 2010-11 fiscal.
With the help of the opening of trade in goods and services, bilateral trade between India and Malaysia is expected to reach USD 15 billion by 2015, it said.
"The CECA creates an attractive operating environment for the business communities of both countries," the statement said.
An agreement for freeing trade in goods has already been implemented with the 10-nation Association of Southeast Asian Nations (ASEAN).
The pact with Malaysia will lead to tariff liberalisation beyond the India-ASEAN FTA commitments, which were implemented by both countries on 1st January 2010.
India has also freed trade with South Korea, while a similar agreement with Japan will come into effect from August.
Bright spot on economy: Exports grow 57 pc in May
NEW DELHI, July 1: Exports witnessed huge annualised growth of 56.9 percent to USD 25.9 billion in May in a bright spot for the Indian economy, which is battling high inflation amid signs of a slowdown.
In the April-May period, exports grew by 45 percent to USD 49.7 billion vis-a-vis the same period last year.
Imports, too, increased by 54 percent to USD 40.9 billion in May -- the highest growth rate in the last four years -- leaving a trade deficit of USD 14.9 billion.
In the first two months of the 2011-12 fiscal, imports were up 33.3 percent to USD 73.7 billion and the trade gap for the period stood at USD 23.9 billion, as per data released on Friday.
In fact, the trend of healthy exports even in the previous months helped the country moderate its current account deficit to 2.6 percent of the GDP in the last fiscal.
"This is a sign of robust scenario... coupled with effective government initiative," exporters' body FIEO President Ramu S Deora said.
While the government has not formally set an export target for the current fiscal, USD 300 billion can be achieved, according to industry estimates.
Exports grew by 37.5 percent to USD 246 billion in 2010-11.
While there are signs of a slowdown in overall industrial growth of 6.3 percent and high inflation of over 9 percent in May, exporters have put out a sterling performance despite the financial woes in several European economies.
In May this year, crude oil imports grew by 18.57 percent to USD 10.1 billion year-on-year, while non-oil imports saw a huge growth of 71 percent to USD 30.7 billion during the period under review.
However, the exports in May grew at a lesser pace compared to April. In April, exports grew by 34.4 percent to USD 23.9 billion.
Standard Chartered's Head of Research Samiran Chakraborty said, the country's exports are likely to grow between 20-25 percent in 2011-12 as last fiscal's exports growth of 37.5 percent was too high and is not sustainable.
Amongst the sectors which registered maximum exports growth in May are engineering 120 percent, followed by petroleum 75 percent, ready made garments 51 percent, man-made yarns and fabrics 50 percent and electronics 117 percent.
During the first two months of 2011-12, sectors which registered healthy exports growth include engineering 115 percent, electronics 80 percent, drugs 68 percent, petroleum 64 percent, gems and jewellery 23 percent, ready made garments 31 percent, chemicals 44 percent and leather 21 percent.
However, few segments like tobacco, iron ore and fruits and vegetables recorded a negative growth.
During April-May 2011, imports of electronic goods increased by 61 percent, chemicals 9.6 percent, coal 19 percent, transport equipment 32.7 percent, ores and scraps 22 percent and vegetable oil 35 percent.
But, fertilisers and iron and steel imports declined by 35 percent and 13 percent, respectively.