February 28, 2012

India's IFFCO under pressure to reduce profit target

IFFCO, one of India's major fertiliser companies, is under pressure to reduce its profit target for 2012-13 to INR800 crore (US$163 million) from the original INR1,000 crore (US$203 million), due to the poor economy.

"Due to various factors, we are likely to scale down our profit target for the next financial year to Rs 800 crore, though the target this year is INR1,000 crore (US$203 million)," India's IFFCO Managing Director U S Awasthi said.

The cooperative fertiliser giant would also refrain from pumping fresh investments, launching new projects and undertaking major expansion activities, diversification and acquisition due to fluid economic situation, he said.

However, the profit targeted during the current fiscal would certainly be met, said Awasthi, adding that IFFCO would also surpass the production target of 8.3 million tonnes of fertilisers by its five plants this year.

"Similarly, the turnover target of INR25,000 crore (US$5.09 billion) for 2011-12 would also be met by IFFCO, fertiliser leader in the cooperative sector," said Awasthi after a visit to the IFFCO plant in Paradip.

"Apart from sluggishness abroad, the domestic situation also remains bleak. The fertiliser sector in the country, particularly the urea industry, continues to be in a bad shape as the proposed new policy appeared to have been pushed to the cold storage," Awasthi said.

"Though it was a welcome move on the part of the government to shift fertiliser subsidy to 'nutrient-based subsidy regime' about two years ago, no concrete step has so far been taken to give it a real shape," he said.