Gujarat State Fertilizers & Chemicals Ltd Management Discussions.

Macro-economic review: 2019-20

Year 2019-20 was a difficult year for world economy with weak business environment prevailed for global demand, manufacturing and trade. Global GDP growth at 2.9 per cent has remained slowest after global financial crises of 2009 and also dipped from 3.6 per cent in 2018-19 and 3.8 per cent in 2017-18. World economic growth has been largely impacted on account of protectionist tendencies of China & USA and rising geo-political tensions between USA and Iran experienced during the year.

Under the influence of weakening global economic parameters, Indian economy also registered a slowdown in 2019-20 with GDP growth falling from 6.8 per cent in 2018-19 to 5 per cent in 2019-20. A weak rural demand and the stress on the financial sector are being cited as key contributing factors for the sluggish growth. At the same time, reduction in the current account deficit (CAD), robust growth in Foreign Direct Investment (FDI) and acceleration of foreign exchange reserves indicates a positivity of the economy on the external front. With easing of crude prices, value of imports has contracted much sharply than exports, which have helped in narrowing CAD. Having duly recognizing the financial stresses built up in the economy, the government has taken significant steps in 2019-20 towards speeding up the insolvency resolution process under Insolvency and Bankruptcy Code (IBC) and easing of credit, particularly for the stressed real-estate and non-banking financial companies (NBFCs). The measures taken by government are well supported by an accommodative monetary policy, adjusting repo-rate to ease the credit flow in the economy.

The measures announced/implemented in 2019-20 include hike in minimum support price of agricultural crops; reduction in corporate tax rate; policy framework for development of textiles, handicrafts and electric vehicles; special programs for micro, small and medium enterprises, incentives for start-ups in India etc. Apart from this, various steps were taken to boost manufacturing, employment generation; financial inclusion; digital payments; improving ease of doing business via schemes such as Make in India, Skill India and Direct Benefit Transfer etc.

The growth in agriculture, industry and service sector in terms of GVA (gross value added) is estimated to be 2.8 per cent, 2.5 per cent and 6.9 per cent respectively in 2019-20, which is lower by 0.1 per cent, 4.4 per cent and 0.7 per cent over 2018-19. Contribution of agriculture, Industry & Service sector in the overall economic growth in terms of GVA is registered at 16.5%, 28.2% & 55.3% respectively.

Although overall growth in economy has slowed down, still India is recognized as a bright spot of the global economy. Country witnessed its best phase of macro-economic stability in the recent years. From being 11th largest economy few years back, today India has emerged as 5th largest economy in the world.

Indian Agriculture sector:

Agriculture is the primary source of livelihood for about 58% of the Indias population. It accounts for 16.5 per cent of the total GVA, which comes to about Rs 30.47 Lakh Crore in FY 2019-20. In spite of rapid development in non-agriculture sectors in India, agriculture continues to be the main driver of the rural economy. Understanding this fact, the present government has prioritized its efforts for growth in agriculture and initiated various special programmers for this sector include widening the irrigation base, access to farm credit, food processing, integrated platform for output markets, mentoring agri-entrepreneurs, agriculture exports, increased minimum support price (MSP), Transport and marketing assistance for farm produce, warehousing, cost of storages, soil health cards, Fasal Bima Yojna to secure the farmers against natural calamities and other non-farm activities to support the income of farmers.

Growth of agriculture & allied sectors has shown a marginal decline by 0.1 per cent during the year under review. It grew by 2.8% in 2019-20 as compared to growth of 2.9 per cent witnessed in 2018-19. However, it is much below the targeted growth of 4% pegged by government for agriculture sector. Having limited irrigation resource, performance of agriculture in India largely depends on behavior of South west monsoon, in terms of overall rainfall quantum and its distribution over the monsoon season. Monsoon season 2019 ended with i) higher precipitation by 10% over normal rains & ii) Prolonged rainy days by about 40 days, up to Oct19. Excessive rains caused flood like conditions in many states and damaged the standing Kharif crops. Extended monsoon has coincided the harvest time of Kharif crops and impacted the yield as well as quality and market value of Kharif outputs and also delayed the next crop cycle of Rabi crops considerably. The attack of locust in many states such as Punjab, Rajasthan, and Gujarat etc. caused significant damage to the standing Rabi crops in many areas. Rabi season started with a happy note of overall higher soil moisture status across the states due to excessive rains received in monsoon season and record reservoir levels, promising for enhanced irrigation potential. Overall sowing area in agriculture year 2019-20 has been increased to 1725 Lakh Hectare, which is 2% higher over normal crop area coverage in the country during past years. In spite of having uneven distribution of rains with excessive rains received in many states, country is likely to witness record food grain production of 296 million MT in 2019-20 season, higher by 3.7 per cent over 2018-19. However, from farmers perspective, because of various reasons, they did not get remunerative prices for their crops and therefore, increased production could not help to lift their economic conditions proportionately in true sense. Especially during Rabi season, the pandemic situation of Covid-19 has coincided with Rabi harvest time, which has delayed the harvest of matured crops, deterioration of its quality and delayed sales in mandis, hampering their cash flow severely. The disturbance in supply chain cycle during Covid 19 time has caused heavy loses to the fruit and vegetable farmers.

Performance of Fertilizer Industry in India:

Year 2019-20 started with a prediction of better monsoon to prevail in the country & also it being election year, the political desire of the Government to ensure security of fertilizer supply in the country, promising for very good demand prospects to prevail for fertilizer business. Although, overall rainfall has remained higher, its uneven distribution and prolonged period has impacted the farm economy and cash cycle at grass root level. Therefore, in spite of increased area under sowing and better availability of fertilizers, the real demand from farmers level has remained passive during the year. World prices of raw materials and also finished fertilizers have declined consistently during the year 2019-20, which has prompted for higher domestic production and also higher imports of fertilizers in the country.

Overall fertilizer production has increased to 426 Lakh MT in 2019-20, exhibiting growth of 3 % over 2018-19. Individually, production of DAP has increased with a higher scale (17%) during the year.

Imports of fertilizers have rose moderately by 1% and reported as 184 Lakh MT in 2019-20. In fact imports of DAP & MOP have reduced significantly, however, higher imports of Urea under Government account to the tune of 22% have largely contributed in increase in overall fertilizer imports during 2019-20. With improved availability of fertilizers, market has remained saddled with higher inventories throughout the year. Initially, up to mid-July19, on account of deficit rains during early Kharif season, demand of fertilizers has remained moderate. Subsequently in the later half, on account of excessive rains and prolonged monsoon period, which has largely damaged Kharif harvest followed by unseasonal rains at the time of Rabi harvest and also the Covid-19 impact at the fag end of the year has impacted the sentiments at farmers level considerably and hence although sowing area have enhanced and selling prices of fertilizers are reduced, it has not converted into enhanced real demand for inputs like fertilizers at farmers level during the agriculture year 2019-20.

Continuous decline in import prices have put a pressure on retail selling prices of Phosphatic fertilizers in India. Channels were hopping further cut in prices with continued volatility in import prices and therefore, reluctant to hold higher stocks. Overall, selling prices of Phosphatic fertilizers have declined by 15 - 20% during the year. Since raw materials are being procured in advance with a time leg of 2-3 months, decline in import prices of finished fertilizers and thereby MRP in a continuous manner in India has impacted the margins of domestic industry to considerable extent during 2019-20.

In order to facilitate the growing demand in the country, both production (2%) and Imports (22%) of Urea have been stepped up in the country. In case of Phosphatic sector, production of DAP has increased by 17 % whereas, that of NPK products has contracted marginally by 2 %. Imports of DAP has registered a decline of 22 % for want of adequate demand support in terms of real sales pull from farmers. Imports of MOP in the country have registered a negative growth of 5%. Lower growth in NPK production, decline in direct consumption of MOP in agriculture and maintaining status quo in its MRP vs. reduction made in Phosphatic fertilizers during the year have contributed in overall reduction in MOP sales in the country.

As the agriculture year 2019-20 progressed, retail demand of fertilizer has picked up reasonably during latter half of the year, which has helped in clearing the inventories lying unsold at retail level. PoS sales have picked up momentum which enabled industry to avail subsidy under DBT scheme. The budgetary provisions made by Government of India for fertilizer subsidy were inadequate and got exhausted in the early 2nd half of 2019-20, leading to financial stress at industry level. Lately Government has taken the cognizance of this aspect and made special banking arrangement (SBA) to ease the situation to some extent.

Outbreak of Covid-19 since March-20 has disrupted production, imports and distribution of fertilizer in the country, which has impacted the peak demand of fertilizers towards hot weather crop season and also advance stocking of fertilizers towards ensuing Kharif season.

Overall, in spite of having very good monsoon and increased crop area in the country as well as lower fertilizer prices, demand of fertilizers has remained passive from farmers level. Channels have all the time remained saddled with stocks and cash-flow as well as margins of the industry has remained under pressure during the year.

GSFCs Performance FY 2019-20 :

During 2019-20 although, country received excessive rains with prolonged period of monsoon, it could not help to rejuvenate the real fertilizer demand in the market. Rather, enhanced period of monsoon has damaged the standing crops significantly, initially during Kharif season, followed by delayed harvest and bringing the farm produce to market has disturbed the whole agriculture cycle at farmers level. Excessive rains received in our home state of Gujarat and also in the states like Maharashtra, Rajasthan, MP, Bihar, Karnataka, UP, constituting our major market segments have impacted the farm economy and hence affected demand pull for inputs like fertilizers to considerable extent.

In spite of lacklustre demand prevailed in the fertilizer consumption during the FY 2019-20, your company could sell 24.67 Lakh MT fertilizers, which is marginally lower by 4 % over 2018-19. Decline in aggregate fertilizer sales during the year under review is largely attributed to lower availability of Urea through both production as well as Import handling on Government account at Rozi Port.

With augmented availability of raw materials at better prices; availability of Phosphatic fertilizers through Sikka unit has enhanced which in turn helped to increase the sales of Sikka products by 15 % over FY 2018-19. With increased production of DAP through Sikka Unit, company has curtailed its imports drastically during the year. Accelerated availability of Ammonium Sulphate through Baroda Unit has helped company to achieve record sales of Ammonium Sulphate to the tune of 4.39 Lakh MT during the year. Similarly the sales of 3.47 Lakh MT Ammonium Phosphate Sulphate achieved in 2019-20 is also all time higher. For the first time GSFC has ventured into Imports of MOP fertilizer and sold 0.89 Lakh MT quantities in various states of our operation, which accounts for 3% of the national consumption. Your company has imported new NPK grade – NPK 16:20:0:13 to cater the specific demand of southern states, which has a growing consumption trend in such region. Also contemplating to commence commercial production of NPK grade 16:16:16 from Kharif-20 season at Sikka unit, which will help in enhancing our product basket further in NPK segment.

Gujarat is most economic market for GSFC, fetching highest margins in fertilizer business. We have enhanced contribution of Gujarat in overall fertilizer business of company to 40 %, 1 % higher over 2018-19.

In order to strengthen the logistics operations, first time in the history, GSFC has started fertilizer movement in container load through water ways from its Sikka Unit. This approach will also help in catering piece meal demand of individual products coming forward through different coastal states of our operation.

With a view to improve the acceptability of Imported P&K fertilizers further, company has introduced packing of such products in yellow coloured bags, which has been well received in the market.

Your company is taking up intensive promotional campaigns during Kharif and Rabi season which helps in furthering up our brand values in the market.

Areas of concern:

Continuing Urea out of the NBS policy and keeping its MRP at quite low level v/s that of P&K fertilizers, resulting into excessive use of Urea by the farmers, curtailing applications of P&K fertilizers and thereby impacting NPK ratio of the soil adversely and affecting the soil productivity.

On account of Indias over reliance on imports for both, raw materials & also finished Phosphatic fertilizers and global suppliers are by far common for both the category of imports; as far as competitiveness is concerned, domestic industry is always at disadvantage vis--vis imported finished fertilizers. Therefore, Indian Phosphatic industry is unable to run their plants to full load and about 40% capacity remains idle. Unless Government bridge this anomaly through imposing appropriate import duty on imports of finished fertilizers, it will be difficult for Indian Phosphatic industry to sustain business viability in a long run.

Timely receipt of subsidy payments through Government is very important for sustaining financial health of the industry. However, unfortunately, releasing payment of subsidy by Government gets inordinately delayed primarily because of under provisioning of fertilizer subsidy amount in the union budget besides cumbersome procedures under DBT. Delays in subsidy payments entail to liquidity crisis and higher borrowing cost at industry level.

Regulation of movement through supply plan limits the market development in various territories and results into inconsistent presence in farther but important market segments.

GSFCs higher dependence on imported raw materials, especially Phosphoric Acid (PA) for Sikka unit sometime affect the production of Phosphatic fertilizer over last few years. This constraint, however is mitigated partly through PA supplies gradually getting channelized through our JV partner TIFERT besides supplementing DAP requirement through imports on need basis.

Recent Developments and outlook for 2020-21:

Pandemic situation developed under the influence of Covid-19 has a dip and long lasting impact on agriculture and food sector. Late harvest of Rabi crops, its delayed procurement, disrupted supply chain for both supply of agri inputs to farmers and also bringing farm harvest to market, non-availability of adequate laborers, and non-remunerative prices of farm produce in the open market etc. has impacted the economics of the farming community adversely.

Operations of all the sectors of agri inputs, including Seeds, Agrochemicals, Fertilizers, Farm processing, farm machinery, Micro irrigation, warehousing and cold storage, food retail, e-commerce etc. are badly affected under the control measures taken for pandemic situation. As far as production is concerned, 15% capacity of Urea and half of the capacity of Phosphatic fertilizers remained closed for almost 45 days. Even at plant level, bagging of fertilizers and its road-rail logistics has been slowed down for want of labor force. Similarly, at ports, handling of imports and its further inland supplies have been affected to considerable extent in absence of sufficient labors. Availability of adequate rail rakes has become critical on account of higher turnaround time of the rakes due to labor crises faced under Covid situation. Distribution of stocks available at Plant, Port and in the field warehouses could not reach to farmers as road transport services got crippled for more than two months. It being essential commodity, distribution and selling of fertilizers was allowed to continue by government authorities through legal notifications, however, there were various local hindrances on account of which practically, it remained standstill for more than a months time. On account of restricted production/imports followed under present conditions, stock levels of P&K products have depleted fast in the market. Further, under the fear of non-availability of fertilizer supplies in ensuing Kharif season, farmers have started stocking fertilizers in advance, which may help to liquidate the back-log quantities lying unsold with the channels.

Bottlenecks of Direct benefit transfer (DBT) scheme of subsidy and the constraint of budgetary provisions of subsidy may continue to impact the cash flow of fertilizer industry. Subsidy rates for P&K fertilizers are reduced in the range of 0.6 % on Nitrogen, 2.2 % on Phosphorus and 9.1 % on Potash by Government of India for 2020-21.

Recent increase in the prices of Phosphoric acid, which is important raw material for manufacturing Phosphatic fertilizers will push up the cost of production of such fertilizers further and widen the gap in the economics between manufactured and imported DAP.

This phenomenon is expected to encourage higher imports in FY 2020-21. However, reduction in import prices of MOP will provide leverage to NPK industries to some extent. The recent reform package announced by the Government worth Rs 20,000 Lakh Crore, has considerable cake for agriculture and allied sectors, which will help to fuel up rural demand, including that of fertilizers in 2020-21.

India Meteorological Department (IMD) in its recent update on monsoon, predicted "Normal" rains in ensuing season, which is quite encouraging and promises for better seasonal prospects to prevail in 2020-21. Selling prices of Phosphatic fertilizers are unlikely to get improved in short run, during the 1st half of current financial year. Hike in minimum support prices (MSP) extended for Rabi crops have given enhanced return to the farmers on their output to be marketed in current season and also the purchasing power of farmers for procurement of inputs. Lately, procurement of Rabi harvest in respect of oilseeds, pulses, wheat has been accelerated, which will support the farm incomes to considerable extent. Commission for Agriculture Costs and Prices (CACP) has recommended higher support prices in the range of 2-13% for Kharif-20 season, which will encourage farmers for more plantation Further, on account of having availability of higher irrigation potential, plantation of Summer crops has reached to record level of 67 Lakh Hectare, 60% higher over normal area coverage, which will provide added breather to the farm sector. These developments will support farm incomes and also salutary effect to ease the food price pressure.

Under the influence of Covid-19, economic growth in terms of overall GDP of the country is bound to get shrink to greater extent in 2020-21. World Bank cut Indias growth forecast to 1.5-2.8% from earlier estimate of 6.1%. However, as per recent assessment of NitiAyog, the countrys farm sector is poised to grow at 3% in 2020-21, despite disruption in overall economy due to Coronavirus pandemic.

Overall, under the backdrop of bumper Rabi harvest, larger summer crop area and with prediction of better monsoon, outlook in general for agriculture and in turn for the fertilizer industry looks good for 2020-21 as far as real demand is concerned.

Raw material prices:

The international prices of raw materials were having downward trend during FY 2019 20 as compared to 2018 19.

The average CFR prices of Phosphoric Acid (PA) which was USD 752 per ton during 2018–19 went downwards to USD 664 (11.70 %) per ton during 2019 20.

The average prices of Ammonia decreased during 2019–20 as compared to 2018–19. The average CFR prices of Ammonia during 2018–19 was USD 322 per ton went down to USD 262 (18.63 %) per ton during 2019-20. On an average, there was 18.63 % decrease in prices of Ammonia as compared to 2018–19.

The average CFR price of Rock Phosphate increased during 2019 20 as compared to 2018 19. The average CFR price of Rock

Phosphate during 2018–19 was USD 85.58 per ton which went up to USD 94.61 (10.55%) per ton during 2019–20. On an average there was 10.55% increase in price of Rock Phosphate compared to 2018–19.

The price of Sulphur decreased during 2019-20 as compared to 2018-19. The average CFR price of Sulphur during 2018-19 was

USD 154.06 per ton went down to USD 91 (40.93%) per ton during 2019-20. On an average, there was 40.93% decrease in price of Sulphur as compared to 2018-19.

Average price of Raw Material products ($ / MT)

Product 2018-19 2019-20 % Increase / Decrease
Phos. Acid (C & F) 752 664 (-)11.70
Ammonia (C & F) 322 262 (-)18.63
Rock Phosphate (C & F) 85.58 94.61 (+)10.55
Sulphur (C & F) 154.06 91 (-) 40.93


The Financial year 2019-20 has witnessed series of events in terms of delayed but heavy rainfall, coupled with volatility in price of crude oil, poor demand from Auto sector, depreciated Rupee against dollar and at the end of the financial year 2019-20, COVID-19 pandemic across the globe.

The crude oil prices trajectory was impacted by the geo political tension between Saudi Arabia and Russia. The crude oil prices were continued to fall from April 2019 to March 2020 by more than 50%. The price of petrochemicals also remained under pressure due to poor demand, coupled with issues of trade war between USA and China which got further aggravated due to COVID-19 which started since Dec 2019.

The Indian automobile industry, the worlds fourth-largest, has finally embraced a slowdown after a near-decade of high growth. During May 2019, the Society of Indian Automobile Manufacturers (SIAM) announced a 17 percent decline in passenger vehicle sales for April 2019, the lowest in nearly eight years. According to the data available with SIAM, this is the 11th consecutive month since July 2018 when car sales have shown a decline. The slowdown has forced production cuts by top automakers to streamline their inventories. Overall Index of Industrial Production (IIP) data has been reported -0.7% during April to March of FY2019-20, which was 3.8% during the corresponding period of FY2018-19.

As per the estimates, Indias estimated gross domestic product (GDP) for the fourth and final quarter of FY2019-20 fell to 3.1 per cent. Data suggests that Indias GDP growth in FY2019-20 slowed down to an 11-year-low of 4.2 per cent.

Accordingly, the sales of Industrial products have been impacted during FY2019-20 in terms of prices down by more than 15% on Year of Year basis for the products like Caprolactam and Nylon -6 Chips. The volumes were also gone down by 7% for Nylon -6 Chips and 11% for Caprolactam during FY2019-20. The oversupply of Caprolactam in international market has resulted into lower price of Caprolactam globally.

The sales volume of Melamine has increased by 42% during FY2019-20 as compared to FY2018-19 due to the availability of additional quantity from Melamine –III plant. Margin of Industrial products continued to remain under pressure during FY2019-20 due to poor demand, upward price movement of raw materials like benzene which has impacted the profitability of the Industrial Products segment.

Global economic activity has come to a near standstill as COVID-19 related lockdowns and social distancing are imposed across practically 188 No. of affected countries of the world. The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic.


Particulars Units 2018-19 2019-20 CHANGE CHANGE % REASON FOR CHANGE
Debtors Turnover Days 58.25 65.16 6.91 12% change < 25 %
Inventory Turnover Times 13.66 9.29 -4.37 -32% Stock Turnover reduced due to lower sales and higher fertilizers inventory.
Interest Coverage Ratio Times 14.99 3.74 -11.24 -75% Interest Coverage ratio declined due to higher finance cost and lower profit.
Current Ratio Ratio 1.86 1.90 0.04 2% change < 25 %
Debt Equity Ratio Ratio 0.15 0.23 0.08 53% Debt Equity Ratio increased due to lower equity and increased short term borrowings.
Operating Profit Margin % 9.94 5.40 -4.54 -46% Profitability decreased due to lower margins of Industrial Products and impact of quadrennial wage revision.
Net Profit Margin % 5.76 1.30 -4.46 -77%
Return on Net Worth % 6.79 1.45 -5.34 -79%
Debtors Turnover Days 58.25 65.16 6.91 12% change < 25 %
Inventory Turnover Times 13.66 9.29 -4.37 -32% Stock Turnover reduced due to lower sales and higher fertilizers inventory.
Interest Coverage Ratio Times 14.99 3.74 -11.24 -75% Interest Coverage ratio declined due to higher finance cost and lower profit.
Current Ratio Ratio 1.86 1.90 0.04 2% change < 25 %
Debt Equity Ratio Ratio 0.15 0.23 0.08 53% Debt Equity Ratio increased due to lower equity and increased short term borrowings.
Operating Profit Margin % 9.94 5.40 -4.54 -46% Profitability decreased due to lower margins of Industrial Products and impact of quadrennial wage revision.
Net Profit Margin % 5.76 1.30 -4.46 -77%
Return on Net Worth % 6.79 1.45 -5.34 -79%

*Based on 39,84,77,530 equity shares of Face value Rs 2/- each

# Debtors Turnover is excluding subsidy income and receivables


There exists a comprehensive system of internal controls in place. The internal auditors of the Company comprehensively carry out their audit and their observations/audit queries are being discussed and debated at length by the Audit Committee. The Audit Committee of the Company also reviews the follow-up actions in respect of the items which did not get closed and seek explanation for the open items. The internal control system is so designed that a particular transaction gets filtered at different levels so as to ensure that proper recording of such transaction takes place and no unscrupulous elements get into the system. The Company uses the SAP platform where-in the roles, responsibilities and authorities are well defined and no deviation is allowed without proper management approval.


The last 10 years Product-wise performance years is given below:

Product-wise performance in terms of production and sales for the last ten years is given below:

PARTICULARS Unit 2019-20 2018-19 2017-18 2016-17 2015-16 2014-15 2013-14 2012-13 2011-12 2010-11
FERTILIZERS M T 1665824 1733957 1678958 1507991 1491741 1385857 1423059 1436535 1470350 1556172
Ammonium Sulphate M T 445630 374720 372330 337370 334030 318680 306671 315145 298000 278470
Ammonium Sulphate
Phosphate M T 267140 291940 282360 313860 328430 337930 336340 294600 302800 280500
Di-Ammonium Phosphate M T 484720 459090 503830 411850 370200 314600 390300 424520 534100 706170
N P K M T 128120 193150 154220 38340 47650 15460 19520 10280 0 0
UREA M T 332705 405360 361181 406571 411431 399187 370228 391990 335450 291032
CAPROLACTAM M T 83093 91479 86662 86191 86297 89918 84856 83180 80503 79577
NYLON-6 M T 24296 23887 20215 17421 9885 9400 9751 9659 8914 9464
MELAMINE M T 29215 14161 15188 14886 15697 14284 14916 14001 15279 13938
ARGON ‘000NM3 3116 3574 3319 3549 3581 3611 3334 3458 3270 3327
MONOMER M T 1709 3993 3187 751 2281 3435 3227 3116 4287 4547
ACRYLIC SHEETS M T 0 0 10 0 122 79 780 566 876 721
ACRYLIC PELLETS M T 0 0 9 285 1346 969 1701 1974 2046 1710
NYLON FILAMENT YARN M T 0 0 811 4044 4219 3427 3643 3080 3910 4361
NYLON CHIPS M T 0 0 2749 6559 8397 9114 9219 6563 5103 5399
FERTILIZERS* M T 1682171 1598428 1604222 1412044 1434684 1320471 1383154 1395376 1441232 1571500
Ammonium Sulphate M T 441335 385952 360555 308214 329778 315926 309843 320007 302915 336988
Ammonium Sulphate
Phosphate M T 249482 293115 262134 299025 290107 334072 334193 335865 296470 304940
Di-Ammonium Phosphate M T 524410 399309 500999 417820 368874 302666 386585 431238 543699 707529
N P K M T 141409 184270 130194 35024 46558 14628 25811 3925 0 0
UREA M T 325536 366763 313448 360879 355402 353058 325051 343736 289678 249699
CAPROLACTAM* M T 58764 65596 63217 63101 66483 68901 65725 64728 63082 61770
NYLON-6 M T 23752 25311 22569 13697 9999 9701 9915 9732 8756 9623
MELAMINE M T 26234 13953 15298 15341 15096 14283 15378 14166 15283 13319
ARGON ‘000NM3 3099 3563 3317 3546 3599 3622 3313 3453 3272 3327
MONOMER* M T 2200 3989 3236 480 1947 2934 1316 2108 2036 2292
ACRYLIC SHEETS M T 0 0 76 91 112 122 707 678 726 728
ACRYLIC PELLETS M T 0 9 44 344 1365 984 1705 1978 1993 1855
NYLONE FILAMENT YARN M T 5 20 991 4309 2706 3233 3378 2924 3319 4033
NYLON CHIPS M T 0 146 3730 4296 6262 6514 6455 6331 5121 5251

*excluding captive consumption


Changes in Government policy, currency risk, fluctuation in input prices, increase in NG prices, insufficient availability of natural gas and raw material in the international market will have an impact on Companys profitability.

Market may experience frequent changes in the price of domestic Phosphatic Fertilizers depending upon the cost of production of the manufacturers. The resistance from farming community has impacted demand. DAP sales was 111 Lakh MT during 2010-11 which has gone down substantially during the subsequent years (74 Lakh MT during 2013-14, 76 Lac MT in 2014-15 & 98 Lac MT in 2015-16). With sharp increase in NG price, prices of Phosphatic fertilizers would go up. In the current scenario, good and widely distributed rainfall, smooth & comparatively cheaper availability of raw materials and timely reimbursement of subsidy by the Govt. of India would be the prime catalysts for the Company to sustain its operations profitably.

In the above likely scenario, the Company is focusing on the efficiency improvement with higher production levels, efficiencies in raw material procurement, increased availability through imports, reduction in marketing & distribution costs, production of various complex grades at Sikka and proper product/ segment strategies to maximize the sales to achieve better contribution from its product basket.

To control the financial risks associated with the Foreign Exchange/ Currency rate movements and their impact on raw material prices, the Company has put in place a sophisticated Foreign Exchange Risk Management System.


Your company has a state-of-the-art soil testing laboratory equipped with high through-put machine i.e. ICP-OES with a testing capacity of 1 Lac samples per annum. Over a period of time, this laboratory has analysed more than 1.47 million of Soil samples across the state. With compilation of last 10 Years data, your company has developed GUJARAT SOIL ATLAS, which has complete mapping of all Taluka of Gujarat with pictorial depiction of soil nutrient deficiency in all Taluka of the state. Your company make use of the latest IT technology and with the available database; you have developed Software to generate online Fertilizers recommendations for particular crops for all Taluka of Gujarat State. This software provides options of THREE fertilizers packages to farmers along with cost benefit ratio. Your company promotes balanced fertilizer usage which is environment friendly. With an endeavour to achieve prosperity for farmers on one hand and commitment for improving the soil health, your company has been involved in organizing awareness campaigns not only in Gujarat but also in Punjab, Haryana, Maharashtra & Rajasthan. The motive is to maintain and improve the soil fertility for future generations. Your company is running round the year call centre (Toll free number-1800 123 5000) to support farmers in Hindi, Gujarati and Marathi languages. The call centre not only provides answers to general issues but has the capacity to link farmers to experts from Agricultural Universities as well.

Your Company is organizing regular & re-orientation Farm Youth Training Programs since 1986 in coordination with Agriculture Universities of Gujarat to educate the young generation of Farming Community regarding latest agricultural technology and also motivate them to adopt it for increasing farm productivity. It organizes four regular & one re-orientation Farm Youth Training Programs every year to promote high-tech agri-concepts among the farmers, who are now decision makers. Your company is publishing agricultural monthly magazine ‘KrishiJivan since 1968 in local language and in Hindi quarterly. It has one of the highest circulations i.e. 50000 copies per issue. It provides latest agriculture information to farmers based on scientific research of scientists of Agriculture Universities and acts as a link for transfer of technology from ‘Lab to Land. Your Company is concerned about the environment and ecological balance and in its endeavour it is contributing through tree plantation, garden development & maintenance etc. with an objective to turn GSFC ‘Green to Greener and thus also supporting the initiative of Govt. of Gujarat in this direction.

For encouraging urban population to increase greenery and maintaining the ecological balance, your Company sponsored Fruit, Flower & Vegetable shows in association with Baroda AgriHorti Committee. It has participated in the competitions and won accolades and appreciation and sales plants and Agro Inputs from "Kissan Suvidha Kendra".

GSFC Agrotech Limited

GSFC AgroTech Ltd., a wholly owned subsidiary of GSFC was established in the year 2012 with the aim of providing single stop solution to the farmers by providing reliable Agri-products at reasonable prices and promoting extension services either directly or in association with Government. Today GATL is one of the pioneers in organized agri-input retail in India and its services are synonymous with innovation and path breaking ventures in the agri-input industry.

GATL manages 285 plus retail outlets across the state of Gujarat and 11 in Rajasthan with a vision to expand its retail chain to other states in the upcoming year. We take pride in the fact that we are the only agri-input company in India which has deployed trained Agriculture Graduates / Post Graduates to manage its retail outlet.

We consider farmer as our partner and are committed to providing an assured supply of a comprehensive range of agri-inputs to our customers. We have thus collaborated with leading agri-inputs companies National Seed Corporation, Pioneer, Coromandel International, Indian Potash Limited, Kribhco, Rise N Shine, etc. to ensure the all-round availability of multi brand products at our retail outlets.

Keeping in view the Governments agenda of doubling farmers income, we have worked on price rationalization of our products like WSF to offer best quality agri-inputs at most reasonable prices. Product innovation is yet another endeavour at GATL. Keeping in view the best interest of the farmer, soil and environment, we are continuously involved in development and launch of newer products and variants.

With a commitment to serve the farmers, GATL is in constant touch with the latest technology and innovations. State-of-the-art Tissue Culture lab which is certified by DBT (Department of Biotechnology, Government of India) has already developed tissue culture protocols for over 10 varieties of fruits, flowers and commercial crops. We sell approximately 64 lakhs plants annually in Gujarat and have also expanded our distribution network to other states.

GATL has also established itself as a trusted implementation partner with various departments of the Government of Gujarat for its farmer welfare schemes. Projects worth Rs 70 crore have been successfully implemented for the Department of Agriculture & Tribal Development Department of Gujarat.


During the year under review, Health Safety Management System as well as elements of Process Safety Management were strengthened both of which are the fundamental building block of Safety functionaries in any industry.

HAZOP studies have been conducted as necessitated by inviting external agencies. Facelift is provided to the modules of the Contractors Safety and Visitors safety training topics. Focused Efforts have been pinned on trainings related to personal protective equipment and basic fire prevention; utilization of fire extinguishers etc.

Safety and Fire Trainings have covered more than 4125 employees, Contractors and visitors during the last FY 19-20. Public Awareness campaign was arranged for inhabitants of nearby villages in which more than 100 ladies participated and absorbed the characteristics of Chemicals utilized in GSFC with the hazards and safety measures. Both manmade and artificial disasters were covered and methods of mitigation were shared as a part of interactive sessions.

Plant shutdown and start up activities pose hazards that are different than operational plant hazards and therefore intensified safety covers have been provided in a structured way, ensured right kind of hand tools, power tools, lifting tools and tackles as well as material handling and shifting devices to ascertain robust safety during plant shut down and start up activities. Pre Start up Safety Review and Non routine work permit as per checklist and in accordance with stipulations of SOPs have been ensured. Personal protection often termed as the last line of defense has always been emphasized and ensured for Employees, Contractors and Visitors.

Project commissioning work is going on for S90WDG which again has its own set of safety challenges. Adequate measures have been taken to ensure safety during Construction, Mechanical and Electro-mechanical work by elevating the safety measures and employing safety mechanisms utilized for project related works. Site Tool box talk, Use of certified tools and tackles, Safety Supervision and capturing near miss are ensured Measures have been put in place to impart mechanical turnaround to fire fighting vehicles and as such Fire tenders are quick response vehicles can be used on the spur of the moment.

Safety measures to safeguard against COVID – 19:

Because of very nature of COVID-19; precautions are the key to safety.

GSFC Ltd, Vadodara, is committed to take care of employees, contractors and all stake holders.

Following preventive measures are being exercised at GSFC Vadodara:

• Sanitization Tunnel is made available at all the entry gates and it is ensured that the same is utilized cent percent.

• Sanitization and fumigation drives are being conducted on daily basis by the use of spray of recommended chemical as per the correct ratio using Fire tenders.

• Face masks & hand gloves are distributed among all employees on a regular basis.

• All the entrants must necessarily pass through a Temperatures scan at the entrance gate of factory itself at all time.

• All employees have been made aware of maintaining social distance by way of drawn circles.

• Medical services are acting on proactive basis.

• Instructions of State and Central Government as well as advisories are being followed in toto.

• Circulars and precautions are being utilized as flyers for the sake of employees, Contractors and all stake holders.

• Cleanliness and Hygienic activities are being maintained in all plants and departments of GSFC Vadodara.

• Chewing of tobacco, spitting here and there attracts penalty and is punishable too in GSFC Vadodara.

• Non usage of Face mask is punitive in GSFC.

• A number of interactive programs have been arranged by HR and Safety on how to remain safe during COVID 19 pandemic.

• Employees, Contractors and other stake holders who have a travel history, need to obtain medical fitness certificate before entering in GSFC Vadodara, been ensured. Personal protection often termed as the last line of defense has always been emphasized and ensured for Employees, Contractors and Visitors.


Shareholders are requested to refer to point 26 on page no. 26 of the Directors Report which forms part of the Annual Report.

For and on behalf of the Board
Place : Fertilizernagar Arvind Agarwal, IAS
Date : 02nd September, 2020 Chairman & Managing Director


Some of the statements made in this "Management Discussion & Analysis Report" regarding the economic and financial conditions and the results of operations of the Company, the Companys objectives, expectations and predictions may be futuristic within the meaning of applicable laws/regulations. These statements are based on assumptions and expectations of events that may or may not materialize in the future.

The Company does not guarantee that the assumptions and expectations are accurate and/or will materialize. The Company does not assume responsibility to publicly amend, modify or revise the statements made therein nor does it assume any liability for them. Actual performance may vary substantially from those expressed in the foregoing statements. The investors are, therefore, cautioned and are requested to take considered decisions with respect to these matters.

Data sources :

Websites of (1) Ministry of Finance, Department of Economic Affairs, (2) Ministry of Fertilizers & Chemicals, Department of Fertilizers, Govt. of India, (3) Central Statistical Bulletin, (4) FAI, New Delhi, (5) Economic Survey- 2018-19, (6) Fertilizer Market Bulletins and (7) Ministry of Agriculture & Farmers Welfare, GoI. (7) Union Budget 2019-2020(8) India Meteorological Department (IMD), Government of India.