COMMENTARY
INTERVIEWS
SPECIALS
CHAT
ARCHIVES

RCF to recast operations, hopeful of Indo-Oman JV

The state-owned Rashtriya Chemicals and Fertilizers Limited is currently embarking on a massive restructuring programme to reorient its operations and sharpen its marketing and trading units, its chairman and managing director D K Varma said.

While the first phase of its restructuring programme is over, RCF will complete its second phase in the next three to four years. However, the restructuring of its marketing units will be complete in the next six months.

Varma said after the annual general meeting that in view of the change in marketing scenario, global competition and pressure of various products, both in the fertiliser and industrial products division, a new marketing strategy has been envisaged so as to respond to the new dynamic situation.

New marketing zones are being created to focus on the strength of the company's products and accessibility in the market. This will include farmers' training, farmers' extension services and vigorous marking in strategic areas.

Speaking about the much-talked-about $ 1.1 billion joint venture Oman India Fertilizers Company at Oman for manufacturing ammonia and urea, he said the RCF is collaborating with KRIBHCO and the Oman Oil Company for the project.

Recently, a high-level RCF and Union ministry of fertilizers and chemicals delegation went to Oman to discuss about the project.

The project will take off and debt equity ratio of 2:1 has been structured instead of the earlier 3:1 proportion, he said.

Further, elaborating on the restructural programme, Varma said there will be no retrenchment of 5,500-odd permanent manpower of the company. However, the management will be open to the voluntary retirement scheme, and will reduce the contractual labour force.

Moreover, the company believes in imparting training in computer-based systems and modern management applications. He made it clear that the company does not intend to curtail existing permanent manpower.

Talking about the results for the year 1997-98, he said they were satisfactory and has recommended a final dividend of five per cent. The company had earlier decided to pay interim dividend of two per cent. Hence the total dividend is seven per cent. This is the highest ever paid dividend of the company amounting to Rs 424.7 million.

During the current year, the company's achieved a turnover of Rs 17.80 billion compared to Rs 13.37 billion in the previous year, and earned a net profit after tax of Rs 1.89 billion compared to Rs 768.8 million in the previous year. The profit in terms of percenrage growth is a record 189 per cent.

The production of fertilizers during the year was 2.3 million metric tonnes compared to 2.1 million MT last year, and but from the constraint of gas supply from Gas Authority of India Limited, the result would have been even better, he stated.

Apart from the Indo-Oman joint venture, RCF is also considering a proposal from UCB Chemicals, Belgium, for setting up of a joint venture company at Thal for augmenting methyl amine production and its derivatives. The UCB Belgium is one of the foremost international company in chemicals and has several units and joint ventures all over the world. The proposal is currently with the government for consideration.

The company is also seeking a shipping arrangement with the Shipping Corporation of India for captive shipping needs because of increased trade and cargo for import and export.

Other projects that have been planned include a major expansion at Thal unit, ammonia retrofit at Thal and revamping of ammonia plant at Trombay in north-east Bombay.

UNI