COROMANDEL INTERNATIONAL LIMITED
ANNUAL REPORT 2011-2012
In this momentous year as Coromandel celebrates its Golden Jubilee, it is
my privilege and honour to be a part of this great Company, built over five
decades by the dedication, commitment and perseverance of the men and women
associated with the Company since its inception.
Coromandel was started with a `promise` to play a key role in the green
revolution of the country enhancing India`s food security by making high
quality farm inputs available to the Indian farmers. Today, we have a sense
of fulfillment of having helped the farming community in achieving higher
yields and profits.
The journey has been long and the milestones many, as Coromandel grew from
strength to strength spreading across geographies with a presence both in
India and abroad. Today, Coromandel has emerged as the second largest
player in the phosphatic fertiliser segment in India. Scaling up from being
India`s first phosphatic fertiliser manufacturer to an integrated farm
solutions provider, with successful businesses in Fertilisers, Crop
Protection, Speciality Nutrients, Organic Fertilisers and Rural Retail.
Coromandel`s focus was always on getting closer to the farmer with the
intent to serve the farming community better, and the Company continues to
In this Golden Jubilee year, I remember with great appreciation the
contribution of our promoters, customers, dealers, partners, suppliers, and
the scientific community who partnered with us for mutual growth. Our
experiences have helped us to learn from each other, build strong bonds and
relationships which have weathered the storms of global downturns and
meltdowns and ensured that all of us came out as winners.
Coromandel`s shareholders have been more than supportive over these five
decades, standing firmly behind the management`s decisions in aggressively
growing this Company.
I also remember all the employees both past and present who have persevered
and contributed to building this Company over fifty successful years,
especially those great men and women who set the strong foundation of
Coromandel in terms of mission, vision, values, beliefs and culture. A
foundation that has held the Company in good stead over time, making it a
great Company to work for.
Looking back over the last year, the Company has continued its good
performance in a year fraught with global and economic challenges, a
testament to what Coromandel has always stood for over the last five
The year 2011-12 saw an economy buffeted by a number of global and domestic
challenges that impacted the growth rate. This was mainly due to the
financial crisis in Europe, sluggish growth in industrialised nations like
USA and Japan, and the hardening prices of crude oil. Investments slowed
down due to changes made in the monetary policy to combat inflation.
Despite the lower growth rate, India continues to be among the front
runners in the global arena.
As we step into the future, we in Coromandel believe that population growth
and greater economic prosperity in emerging markets will drive the future
demand for food. As demand for food increases, there is an increased need
for crop nutrients which provides an area of opportunity for the Company.
However, there are associated challenges such as limited land holdings,
shortage of labour, changing life style and food consumption patterns in
emerging countries, which also need to be addressed.
Nutrient Based Subsidy (NBS) announced by the Government of India for
phosphatic fertilisers in April 2010, is one of the most important reforms
introduced in the fertiliser sector in the last thirty years. This reform
is not only helping the Indian Government to save subsidy but is also
helpful in ensuring judicious use of fertilisers by the farmers. India does
not have the natural resources to manufacture P and K fertilisers and hence
it is very important that the Government puts in place a suitable mechanism
to fund acquisition of natural resources of P and K. Further, the
Government also needs to leverage its trade relations with resource rich
countries to secure long term supplies of P and K fertilisers to address
the food security concerns of India.
While the Government has rightly addressed the NBS philosophy through
subsidy reduction and freeing of MRPs in the P and K segment, it is
unfortunate that no progress has been made in the `N` (urea) segment. This
has led to distortion, where DAP and complex prices per tonne are five
times that of urea. The subsidy on urea has been untouched and kept
unusually high. Unless there is an increase in MRP of urea combined with
the reduction in subsidy, the current gap will lead to indiscriminate use
of urea by the farmers and will seriously affect yields and productivity at
the farm level. We sincerely hope that the urea subsidy scheme also moves
to the Nutrient Based Subsidy. This will bring in a uniform subsidy regime
for all fertilisers to ensure that there is a balanced use of all major
nutrients. The current policy of differential subsidy for urea may lead to
imbalanced use of fertilisers. Coromandel believes that enhancing soil
productivity through efficient/judicious use of crop inputs and balanced
use of nutrients is the only way to meet the challenge of the ever growing
demand from the increasing population.
With your support, we at Coromandel race forward with Energy, Vitality &
Positivity to Maximise value for all our stakeholders, while continuing to
Enrich millions of lives in building a positive and vibrant future.