Gujarat State Fertilizers & Chemicals Limited (GSFC) is an Indian manufacturer of fertilizers and Industrial Chemicals. GSFC was founded in 1967.
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 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 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. The revival measures were fully supported by Govt. of Gujarat and the Company was given complete autonomy to roll back to the track. Finally the major factors that brought company out of red were improvement in the Operational Efficiency, Reducing Cost of Sales, Regenerating Confidence in Suppliers & Customers, Moral boosting of employees, strategizing foray in the global market, consolidating through further Expansions, focusing on ideal product mix to insulate performance from downtrends etc.
Govt. of Gujarat provided the proactive support to GSFC, which brought out a scheme of deferred sales tax of an amount up to Rs. 45 Crores per year for five years, thus improving the Company's cash flow position. Another important breakthrough was the increased availability of natural gas in Gujarat, from GAIL, GSPC and Gujarat Gas, which substituted costly Naphtha and LSHS.
All these measures finally resulted into GSFC becoming a financially strong, profitable and stable Company. Coming out of Corporate Debt Restructuring (CDR), GSFC approached the CDR Cell, this time to accelerate the debt repayment. The debt, which was scheduled to be completely paid by 2013, was re-paid in 2006.
As a step towards backward integration as well as a part of global trotting for feed-stocks has participated in a joint venture in Tunisia viz. Tunisian Indian Fertilizers S.A. (TIFFERT), this would ensure the consistent supply 1, 80,000 TPA of additional Phosphoric Acid per annum required for the production of DAP. GSFC has also acquired a strategic stake in M/s Karnalyte Resources Incorporation in Canada. This secures availability of Potash for the Company in long run.
The Company during the period of past half decade has entered the Second Green Revolution phase by developing alternative energy generation facilities and initiating the spread of drip irrigation systems in Gujarat. The Company has provided valuable services to farmers by way of agricultural inputs and marketing support.
Entering the second green revolution, GSFC continued its role of encouraging agricultural growth by developing and supplying Bio-Fertilizers and Bio-technology products to the farmers under one roof. The Company has also advanced Tissue Culture facilities to support horticulture and other crops. In order to provide farmers with high-tech inputs, GSFC has formed 100% subsidiary GSFC Agrotech Limited for research and production of liquid bio-fertilizers, Plant Growth Promoters-Sardar Amin Granules/liquid, Tissue culture and Seeds.
GSFC also promoted Gujarat Green Revolution Company Limited (GGRC) to promote drip-irrigation and sprinkler irrigation systems amongst farmers so as to optimize the usage of water and implementation/monitoring the Government subsidy scheme in co-ordination with GSFC.
GSFC is also contemplating an investment outlay of approx. Rs. 8,000 Crores for setting up an integrated fertilizer and petrochemicals complex at Dahej.
The major achievements of the company during the able leadership of Shri Narendra Modi, as Chief Minister can be summarised below:
1) GSFC could achieve consistent profitability record and it has touched its highest profits 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.
2) Significantly, GSFC, which was under loss in the year 2001-02 and 2002-03 on account 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.
3) 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 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.
4) 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.
All these steps are in line with GSFC's mission of becoming a world-class, multi-product, eco-friendly global company contributing to the nation as well as for the welfare of society at large.
References
Coordinates: 22°22′28″N 73°09′20″E / 22.3745°N 73.1555°E / 22.3745; 73.1555
