June 1, 2012

India's GSFC posts net profit of US$135 million in 2011-12

After posting an almost flat net profit for fiscal 2011-12 at INR758 crore (US$135 million), Gujarat State Fertilisers & Chemicals (GSFC) Ltd, a public sector undertaking (PSU) is now set to expand its fertiliser production capacity.

In the coming years, the Gujarat government-owned company is set to invest INR875 crore (US$156 million) to expand production capacity of fertilisers, chemicals and enhance its operational capacity on port of Sikka.

Of the total new investment, the biggest share will go to Dahej. "We want to replicate the whole Vadodara unit at Dahej. This means that whatever is produced at the Vadodara plant will also be manufactured in Dahej. However, the production capacities are not yet decided. For this project, we have already bought 500 hectares of land in Dahej at a cost of INR400 crore (US$71.4 million)," said GSFC executive director of finance, BM Bhorania.

Simultaneously, its methanol plant at Vadodara is already under expansion as well.

"Apart from that, we want to revamp the ammonia plant at a cost of INR85 crore (US$15.2 million). We are also increasing our nylon production capacity which is presently 9,000 tonnes by adding another 15,000 tonnes at an investment of INR125 crore (US$22 million). We will also be making nylon yarn and to revamp the plant for the same, we will be investing INR40 crore (US$7.1 million)," he said.

In addition, the company also has a coastal phosphate fertiliser plant at Sikka near Jamnagar. "We are increasing our capacities at Sikka as well, where we will be investing INR225 crore (US$22 million)," said Bhorania.

Announcing the financial results of GSFC, he said that despite the depreciating currency, with help from the hedging mechanism, the company succeeded in posting a marginal rise in its net profit.

"The net profit at INR758 crore (US$135 million) for 2011-12, is also the highest ever earned as against INR749 crore (US$134 million) for the previous financial year. The board of the company has recommended a dividend of 75% on its equity shares. The net profit of GSFC for the March 2012 quarter was INR230 crore (US$41 million), up 12% over INR205 crore (US$36.66 million) in the corresponding period of the previous fiscal," he said.