2002 - 2014
It is rightly said that you need to take one step backward if you want to stride forward and this adage aptly applied to GSFC during the years 1999-2002. This was a phase of one step backward which as a matter of fact facilitated endless strides forward. GSFC has never looked back since then. During the period between 1999 and 2001, it was veering to the brink of a cash crunch. This phase of GSFC can be attributed to many reasons. Some of which 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 to have technical snags which stabilised only by the end of 2003. The liquidity problems further compounded due to expansion of DAP capacity at Sikka (1999-2003) which required infusion of Rs. 180 crore. The Government of India also recovered subsidy amounting to Rs. 375 crore. 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 GSFC began from FY 2003-2004. Under the able leadership and timely intervention of then Hon’ble Chief Minister, Shri Narendra Modi in taking certain bold policy decisions, the company could work on strategies to enhance its productivity, bring down costs through technical innovations and improved management information systems. The revival measures were fully supported by the Government of Gujarat and the company was given complete autonomy to roll back to track. Finally, the major factors that brought company out of the red were improvement in the operational efficiency, reducing cost of sales, regenerating confidence in suppliers & customers, moral boosting of employees, strategising foray in the global market, consolidating through further expansions, focusing on ideal product mix to insulate performance from downtrends, etc.
Government of Gujarat provided proactive support to GSFC, bringing out a scheme for deferred sales tax of an amount of up to Rs. 45 crore per year for five years. This improved 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 the 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 pre-paid in 2006.
As a step towards backward integration as well as a part of global trotting for feed, stocks entered into a joint venture in Tunisia viz. Tunisian Indian Fertilizers S.A. (TIFFERT). This would ensure consistent supply of 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 the long run.
GSFC, during the past half-decade, 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 also has advanced Tissue Culture facilities to support horticulture and other crops. In order to provide farmers with high-tech inputs, GSFC has formed a 100% subsidiary, namely 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 encourage drip-irrigation and sprinkler irrigation systems amongst farmers. This was done to optimize the usage of water and implement/monitor the government subsidy scheme in co-ordination with GSFC.
GSFC is also contemplating an investment outlay of approx. Rs. 8,000 crore 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 as below:
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.