I am happy to inform you that NFL has implemented the feedstock conversion projects at
Panipat, Bathinda and Nangal by changing over from fuel-oil to natural gas. With the
commissioning of feedstock conversion projects, NFL is marching towards using cleaner
feedstock for better environment.
During the year gone by, your company has produced 32.11 Lakh MT of urea. The
production during 2012-13 remained lower due to extended shutdown at Vijaipur for hooking
up & commissioning of revamp projects. On the marketing front, sale of Urea was
recorded at 31.62 LMT. The sale was less due to lower production and limited dispatches.
The above factors and higher energy consumption due to lower production at the Units
adversely affected the profitability and the Company has reported a loss post tax of Rs.
170.73 crores during 2012-13. Bottom line of the Company was also adversely impacted due
to non-revision of New Pricing Scheme Stage-III parameters of urea. Under the existing
policy, reimbursement of fixed cost is based on the financial year 2002-03. Further, delay
in receipt of subsidy has increased the interest expenses on working capital loan.
The Company has been making regular forays into diverse agri-based businesses including
seeds, compost, Bentonite Sulphur and pesticides. During the year, turnover of Rs. 30.08
crores was recorded in these businesses.
Your Company has been strongly advocating and promoting balanced and efficient use of
fertilizers. With this objective, a number of programmes such as in-house training of
farmers at Kisan Vikas Kendras were organized. In addition to this, more than 50,000 soil
samples are collected and analyzed with the reports to the farmers.
The Company is committed towards upliftment of underprivileged sections of the society
and has supported various social and community initiatives touching the lives large number
of people. The Company is engaged in various CSR activities with prime focus on creating
awareness about health and hygiene, children education, women empowerment, skill
development for self employment, use of non-conventional energy resources, water
conservation, rain water harvesting and ground water recharging. For the above initiatives
in CSR, your Company was awarded Caring Company Award in the World CSR Congress at Mumbai
in February, 2013.
Your Company has taken various initiatives in adopting best practices for environment
management, energy conservation and social upliftment leading to sustainable development.
Other than use of cleaner and greener fuel in all its plants, NFL is continuously
endeavouring to improve the energy efficiency. Your Company has installed and commissioned
Carbon Dioxide Recovery System at Vijaipur, which will help in reducing the carbon foot
print from Vijaipur in addition to increase in the production of urea. Your Company is
also installing Purge Gas Recovery System and Process Air Compressor at Vijaipur to
increase production and improve energy efficiency of the plant. On the safety front,
Panipat Unit has been awarded Shreshtha Suraksha Puraskar by National Safety Council and
National Level Safety Award from Fertilizer Association of India for excellence in safety.
The Government has notified the New Investment Policy 2012 in the urea sector with the
objective of encouraging investments to increase indigenous capacities. It is expected
that fresh investments shall come for expansion, revival and setting up of new projects.
The Government has also decided to implement direct cash transfer to the farmers in a
phased manner, which would help target small, marginal and other farmers. Urea price is
abnormally low, which is leading to excessive use of this fertilizer in comparison to P
& K Nutrients.
Notification of New Investment Policy (NIP), 2012 in the urea sector provides an
opportunity to make investments in the sector. Government of India on nomination basis has
allotted NFL and Engineers India Limited (EIL) for revival of closed unit of Fertilizer
Corporation of India Limited (FCIL) at Ramagundam. This venture will provide the Company
an opportunity to establish itself as a market leader in urea.
Capacity augmentation of urea projects at Vijaipur-I & II and switchover of
feed-stock from fuel-oil to Natural Gas at Bathinda, Panipat and Nangal has provided an
opportunity for the Company to consolidate its position in urea production at competitive
Company has a well-knit marketing set-up and dealer-network with significant presence
in Northern and Central India. With the implementation of Nutrient Based Subsidy (NBS),
there is an opportunity for undertaking trading of P&K fertilizers. Company is also
conducting feasibility study of installation of Single Super Phosphate (SSP) plant at
Panipat. Trading of agro-inputs like seeds, compost and pesticides is also being explored
on large scale. Company also sees an opportunity in use of customized fertilizers.
Timely monsoons in North India will give a boost to the fertilizer consumption. Company
would use this opportunity to have better sales and cutting down inventory.
To comply with the market regulator Securities and Exchange Board of India (SEBI)
norms, the Government of India has further divested 7.64 percent of its stake in the
Company thereby reducing its holding to 90%. As per the SEBI norms, Government`s
shareholding in the listed government companies should be below 90 percent.
Since its inception, NFL has ever performed well. May it be production, marketing or
finance, the Company has requisite strengths to meet the internal and external challenges.
The present situation is also challenging one. I am confident that Company will continue
to retain its position, which it has achieved after years of toil and hard work and serve