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Mint
4 days ago
- Business
- Mint
Why Coromandel International has thrived while many fertilizer companies have struggled
Kakinada/Vishakapatnam/Hyderabad: The first thing you notice as you enter Coromandel International's phosphatic fertilizer plant at Kakinada in North-Eastern Andhra Pradesh is not a smoke stack but a bird sanctuary. Spread across 25 acres, it has a large pond, over 200,000 trees and very bushy flora. Every year 97 different types of birds, including Grey Heron, Painted Storks, Northern Pintails, Eurasian Wigeons, and Indian Darters, some from as far away as Siberia, visit the sanctuary, which is now recognized by the United Nations Development Programme. The tall trees and bushes make for ideal nesting ground for the birds. About 20,000 fishes are added to the pond every November to provide the birds with food when they start visiting from mid-June. The bird sanctuary has become the pride of the company and all expansions over the last 10 years have religiously maintained its sanctity. This apparent focus on ecological preservation is perhaps one of the reasons why Coromandel, a part of the ₹77,800 crore Murugappa Group, is ranked among the top 7% of the global chemical companies in the Dow Jones Sustainability Index. 'Only companies with high Environment, Sustainability and Governance (ESG) scores can thrive in the long run," Natarajan Srinivasan, executive vice chairman, Coromandel International, told Mint. 'Such companies tend to be investor friendly and investment worthy," he added. Coromandel is not looking for funds, be it equity or debt. It is sitting on a cash pile of ₹4,400 crore and is debt free. In 2024-25 alone, it generated cash to the tune of ₹2,464 crore from its operations. The company, nevertheless, wants to be ready with strong ESG credentials if a need arises to raise low-cost funds in the future. Companies with high ESG ratings are eligible to issue green bonds at an interest cost that is at least 2% lower than market rates. It is this approach to business that has made Coromandel International one of the most efficient and profitable producers of fertilizers in the country, in a sector that is highly regulated and very challenging even on a good day. So much so, that some of its peers have exited the business. In 2020, Aditya Birla group sold Indo Gulf Fertilizers to Indorama Corporation. Two years earlier, Tata Chemicals had sold its phosphatic fertilizer business to a subsidiary of Indorama Corporation. Coromandel, however, is going strong. In 2024-25, it posted a standalone revenue of ₹24,428 crore and profit after tax (PAT) of ₹1,941 crore. Fertilizers accounted for 89% of its sales and crop protection chemicals the rest. The company's Ebitda (Earnings before interest, taxes, depreciation and amortisation) margin was at 12% and PAT margin at 8%. In March, rating agency Crisil Ratings reaffirmed its AAA rating for Coromandel, which is the only fertilizer company with the top rating. 'The ratings continued to reflect the strong position of Coromandel in India's phosphatic-fertilizer market, strong operating efficiency supported by backward integration facilities and robust financial risk profile," read Crisil's rating rationale. Equity analysts, too, have been bullish on the company. Motilal Oswal Financial Services, in its recent report, has said that the company is well-positioned to deliver a sustained performance and long-term value backed by favourable market dynamics, strategic product focus and operational efficiencies. Coromandel's stock closed at ₹2,436.80 on 25 July, up over 50% in the last one year. Meanwhile, the company's benchmark Nifty Midcap 150 index remained nearly flat in the same time period. What has Coromandel, the second largest phosphatic fertilizer producer (after IFFCO) and a major name in crop-protection chemicals with 18 units across the country, done differently? To answer that question, it is essential to understand the industry's importance to the economy and the challenges it faces as a consequence. 'It's strangulation' India is the second largest consumer of fertilizers in the world after China. After all, agriculture accounts for 18% of India's gross domestic product (GDP) and plant nutrients are critical in ensuring good farm output and thereby food security. Higher output keeps food prices under control and the economy strong. The agriculture sector also supports the livelihood of 42% of the population. What makes the fertilizer sector even more attractive is that demand exceeds domestic supply. Imports account for 16% of India's fertilizer consumption. Considering the sector's importance, the government has chosen to regulate it tightly. 'It decides almost everything, from the quantum of production, to where to supply and when," said Amir Alvi, chief operating officer, fertilizer, Coromandel International. Though retail prices are purportedly deregulated, they are usually 'indicated' by the government. Thanks to the principle of 'reasonableness of return', the post tax return is capped at 12%, he added. Regulation, or strangulation, as some industry insiders call it, is not the only challenge. Companies are obligated to sell critical fertilizers to farmers at 75% of the cost. The remaining 25% comes as a subsidy from the government. In the past these payments have been delayed, forcing the companies to borrow more to meet the working capital shortfall. With Indian farming being predominantly rain-fed, the demand for fertilizers is directly linked to rainfall. Less rain or worse, a drought, will cause fertilizer offtake to drop sharply, leading to an inventory pile-up. The industry, which operates at a very low margin of 3% to 4%, does not have the wherewithal to absorb any shocks. This makes fertilizer companies particularly vulnerable, as key raw materials, be it rock phosphate, phosphoric acid, sulphur, ammonia, or muriate of potash, are entirely imported. A depreciation in the value of the rupee will eat into the industry's already wafer-thin margins. In recent times, geopolitical tensions have created havoc. When Russia invaded Ukraine, the conflict disrupted the supply of natural gas, a key ingredient in the production of fertilizers and other inputs such as ammonia, urea and potash, causing a spike in their prices. More recently, the Israel-Iran war saw supply of urea and ammonia being affected. These factors have created a dichotomy. While the fertilizer sector is absolutely critical for India and offers strong demand potential, no new entity, Indian or foreign, is keen on entering it. Existing companies hesitate to make large investments. Under these circumstances, how is Coromandel bucking the trend? 'Coromandel's strong performance in the recent past reflects its disciplined focus on backward integration, operational excellence and differentiated product portfolios," said Arun Alagappan, executive chairman, Coromandel International. He added that manufacturing efficiency has been enhanced through targeted capacity debottlenecking, investments in multi-product plants, and the deployment of precision agri-services, by leveraging drones and satellite-based diagnostics. Backward integration With thin margins and strong vulnerabilities both on the demand and supply side, the company chose to heavily re-invest its profits with a special focus on backward and forward integration. Projects worth ₹2,000 crore are currently in progress. The company's Kakinada plant, which produces two-third of its complex fertilizers (those that contain all three primary nutrients: nitrogen, phosphorus and potassium), imports sulphuric acid and phosphoric acid, its key raw materials. But supply of phosphoric acid is tight globally while international prices of sulphuric acid fluctuate widely. 'We are setting up sulphuric acid and phosphoric acid units in Kakinada at a cost of ₹1,100 crore. This will make us more self-sufficient on the raw material front and less vulnerable to geopolitical shocks," explained S Sankarasubramanian, MD & CEO, Coromandel International. Rock phosphate and sulphur, which go into production of phosphoric acid and sulphuric acid, respectively, are available in plenty and can be imported easily. The backward integration has other benefits as well. Production of sulphuric acid also has an additional benefit as it helps generate power (by harnessing the steam resulting from the production process), and this reduces the company's power costs. Similarly, production of phosphoric acid generates gypsum. The company has initiated plans to value-add gypsum to produce boards and plaster of paris. These measures, analysts say, will enhance its margins significantly. De-risking The company, which currently has the capacity to produce 3.5 million tonnes of phosphatic fertilizers, is setting up a new line that will add 750,000 tonnes at Kakinada. An expansion is being planned at Visakhapatnam, as well. 'We want to take our capacity to 10 million tonnes in the next few years," Alvi said. The additional capacity will help Coromandel become a pan-India player, substantially de-risking its business. Today, a drought in Andhra Pradesh and Telangana will hurt the company significantly as it has a 70% share in these markets. Raw material security Fertilizer companies typically suffer from poor capacity utilisation due to lack of adequate raw material supply. Coromandel, too, faced such issues. Its capacity utilisation was below 75% five years ago. To overcome this problem, it began building relationships with suppliers and inked long-term contracts. Today, almost 80% of its raw material needs are met through such contracts. The company has also formed joint ventures, with Foskor in South Africa and TIFERT in Tunisia, to procure phosphoric acid, but the JVs have not delivered as expected. Recently, Coromandel acquired Baobab Mining and Chemical Corporation (BMCC) in Senegal. BMCC operates a rock phosphate mine. After initial challenges, it now meets 15% of Coromandel's rock phosphate needs. These measures have ensured raw material security and in 2024-25, the company's capacity utilization touched 100%. Fertilizer sector experts say the biggest success of Coromandel International is its versatile production process, which can handle different grades of raw material. 'We are the only company in India to have a miniature pilot plant, which we use to adapt the process to different quality inputs," Sankarasubramanian said. The ability to handle multiple grades of raw material adds to the company's raw material security and improves its margins. Farmer connect In a unique move, Coromandel International began setting up its own 'Growmor' retail shops in 2008 and saw many benefits. Sales through its own shops help it save on the dealer margin, which is anywhere between 6% and 10%. They also help in brand promotion and protecting market share as dealers have little brand loyalty. 'Most importantly, we wanted to have a direct connection with the farmers. Today, these shops help us in understanding their purchase pattern, pest scenario, and get feedback, which is then used to improve the products," said G. Babu, head, retail business. As of end-May, Coromandel's retail network was 903 outlets strong, spread across the southern states (barring Kerala) and Maharashtra. It also plans to enter Madhya Pradesh this year. These shops serve 3 million farmers and have come in handy as the company is now offering services such as spraying of fertilizers through drones. Coromandel recently invested ₹150 crore to acquire a 58% stake in Dhaksha Unmanned Systems Private Ltd, a drone maker. The retail rollout was not easy. Between 2021 and 2024, the company had to halt the process and review the model as many stores failed to deliver profits. Many were shut and a few were relocated. The rollout restarted last fiscal year. Today, Coromandel sees this retail network as a critical part of its transition to become an agri solutions enterprise. Coromandel is also tweaking its product portfolio in a bid to reduce its share of subsidy-based products by focussing more on crop protection chemicals, and advanced products such as nano-DAP, nano-Urea and purified phosphoric acid (used in battery manufacturing). But success has been limited. Subsidy-based products continue to account for 80% of the sales. The company survived a scare in December 2023 when ammonia gas leaked from the under-sea pipeline at its Ennore plant in Chennai. About 67.6 tonnes of the gas leaked in just 15 minutes, causing discomfort to nearby residents. Protests erupted and calls were made to shut the plant permanently. A study by a technical committee concluded that large boulders had moved during Cyclone Michaung, damaging the pipeline. A fine of ₹5.92 crore was imposed on the company, which has not operated the fertilizer plant at Ennore since the incident. While analysts and industry experts commend the company for its efforts towards efficiency, they say a lot of work lies ahead. Farming is changing and Coromandel needs to develop non-chemical fertilizers that can fuel plant growth without hurting the soil, they say. Precision farming is taking root and technology, including artificial intelligence, will play a significant role from now on. Though Coromandel has taken initial steps in this area, its task is cut out.
India.com
17-07-2025
- India.com
7 Hidden Saltwater Lakes Near Delhi You Must Visit For An Unforgettable Birdwatching Experience
The capital of India Delhi provides residents with more than political and cultural opportunities because the city leads toward dreamlike natural environments. The vital bird habitats include saltwater lakes which host both migratory and resident bird species. Saline water bodies develop exclusive habitats that attract numerous bird species which can be observed by birdwatchers. Birdwatchers can explore this guide to discover amongst the best saltwater lake locations around Delhi for their pastime. 1. Sultanpur National Park Sultanpur National Park stands as a prominent bird sanctuary in the Delhi vicinity at its 50-kilometer distance. The park holds seasonal wetlands with slight salinity because it stands near arid locations although it lacks complete saltwater characteristics. The shallow winter waters of this site attract thousands of migrating Northern Shoveler and Greater Flamingo and Bar-headed Goose species. Indian Peafowl together with the Grey Heron inhabit the park area throughout the year. Birdwatchers of every experience level can find pleasure at this location because of its excellent trail conditions coupled with observation platforms throughout the park. 2. Bharatpur Bird Sanctuary (Keoladeo Ghana National Park) The Keoladeo Ghana National Park deserves UNESCO World Heritage Site recognition for its global significance even though its distance from Delhi reaches 180 kilometers. The sanctuary combines freshwater marshlands with saltier wetlands which create various ecological habitats. During peak migration season (October to March), over 370 bird species visit this haven. Siberian Cranes and Painted Storks together with Pelicans are among the animals often seen at this location. People often visit this place from Delhi by road because of its convenient accessibility. 3. Surajpur Wetland From central Delhi's position at 45 kilometers distance one can find the bird-watching destination of Surajpur Wetland within Greater Noida. Part of the freshwater region but some sections have slightly salty water because of agricultural drainage and soil mineral content. Black-winged Stilts Common Teals together with Eurasian Spoonbills make up more than 200 bird species which inhabit the wetland. Enticing winter guests arrive at the site to become visible as Greylag Geese and Ruff. Public transport reaches the site directly and the place provides special pathways for walking visitors. 4. Okhla Bird Sanctuary Okhla Bird Sanctuary exists on the banks of the Yamuna River as it bridges the Delhi-UP state border and maintains its biodiversity in a small protected area. A mere 4 square kilometer area lets this site serve as an important habitat for countless birds who find comfort in its freshwater and mildly salty waters. Three hundred different bird species have been identified at this location which features two exceptional bird species—the Baer's Pochard and Ferruginous Duck. The sanctuary gains its fame from the winter gathering of waterfowl that occurs there. The well-built path enables people to observe nature without causing any disturbance to wildlife. 5. Basai Wetland The lesser-known birdwatcher destination Basai Wetland finds its location around 60 kilometers northwest of Delhi. The wetland continues to hold vital importance as an avifauna conservation site despite ongoing threats from urban development. Saltwater pools form in selected locations of this wetland because of industrial waste and natural water chemistry. The Black-tailed Godwit together with the Red-crested Pochard and Yellow-wattled Lapwing are commonly observed species at this location. The untouched birdwatching environment provides a peaceful sanctuary where protection work continues to defend against expanding development. 6. Dadhana Wetland Bird-lovers keep Dadhana Wetland as a hidden treasure based in Haryana's Jhajjar district which lies about 70 kilometers from Delhi. The saltwater combination in this habitat enables it to nurture life from the aquatic realm as well as birds of all types. Northern Pintail together with Gadwall and Common Coot birds migrate to this site when winter arrives. The wetland becomes brighter during all seasons because it sustains two native bird species: Purple Swamphen and the resident Indian Spot-billed Duck. The uncommercial site of Dadhana presents inherent natural beauty together with plenty of photo-worthy subjects. 7. Badkhal Lake Before neglect, the Badkhal Lake served as a local attraction for visitors who engaged in boating and organized picnics between Faridabad and Delhi which are about 30 kilometers apart. The lake experienced years of abandonment that resulted in its dry sections where only salinity remained. Conservation work in recent years brought back elements of the lake which now host Little Grebe and Moorhen and Cotton Pygmy Goose species. The protection and restoration work at Badkhal Lake position it as a potential upcoming birdwatching location if present conservation strategies continue achieving positive results. Why Saltwater Lakes Are Important for Birdwatching A network of saltwater lakes functions as a vital habitat for maintaining different bird species. Their particular chemical properties enable the development of special vegetation and water-based organisms that provide food for numerous bird species. Migratory birds make stopover use of these locations as they travel between continents. The high nutrient levels in saline waters create conditions that result in large ecta fish and insect populations which supply birds with ample food resources. Tips for Birdwatching Near Delhi The optimal hours for observing birds in their natural activity occur during early morning and late afternoon. Desert Birdwatchers need to purchase binoculars together with cameras that include strong zoom capabilities for distant wildlife observation. Choose Clothing Items with Neutral Colors because these tones will not alarm birds while matching the background environment better. Your distance from wildlife nesting areas and use of quiet activities can help prevent disturbing their habitats. Observing seasonal migratory movements will help you decide the best time to visit the area for bird observation. The vicinity of Delhi to multiple saltwater lakes and wetland areas creates extraordinary conditions for bird observation. All birdwatchers will find valuable viewing opportunities at these sites where they can observe both large flamingos and delicate warblers. Both responsible visits and advocacy efforts will help sustain these valuable ecosystems as vibrant environments throughout the generations. The serene beauty of nature awaits everyone who rests their gear to step outside and experience its symphonic appeal.
Wales Online
06-05-2025
- Wales Online
Rare habitat in Wales threatened by jet skiers, dog walkers and sewage
Rare habitat in Wales threatened by jet skiers, dog walkers and sewage A community nature group is calling on Vale of Glamorgan Council to turn an old harbour into a local nature reserve in order to protect the numerous species there A community group is calling for the old harbour in Barry to be turned into a local nature reserve A community group has called for better protection of nature at Barry's old harbour amid concerns jet skiers and "irresponsible dog walkers" are affecting wildlife there. Barry Action for Nature and hundreds of residents have called on Vale of Glamorgan Council to turn the site, which is just to the east of the Harbour Road car park on Barry Island, into a local nature reserve. The local authority has two main local nature reserves. These are Cosmeston Lakes Country Park and Porthkerry Country Park. Vale Council said it was currently looking into the possibility of making the old harbour in Barry and several other locations a local nature reserve. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here . Chairman of Barry Action for Nature, Rob Curtis, said: "Saltwater marsh is one of the rarest habitats in the UK. "The Old Harbour's saltwater marsh supports wintering red listed species such as Curlew and Whimbrel. "It also supports other waders and seabirds such as Shelduck, Grey Heron, Little Egret, Knot and Redshank. Article continues below "We call on the Vale of Glamorgan Council to declare this area a Local Nature Reserve which can contribute to the Welsh Government's aim of protecting 30% of Wales for nature by 2030. "We are concerned that jet ski users and some irresponsible dog walkers are disturbing resting and feeding birds. "We are also concerned at the sewage pollution currently being discharged into this harbour. Please help us protect our local wildlife." Vale of Glamorgan Council is the owner of the old harbour in Barry. It was the original anchorage and harbour at Barry before Barry Docks opened in 1889. A Vale of Glamorgan Council spokesperson said: "The Council and Vale Nature Partnership are looking into the possibility of making this and several other areas of the Vale designated Local Nature Reserves (LNRs). 'It is believed 20 or so species of rare bird are found there, along with butterflies and moths, while it is also one of few places in the Vale where seagrass could be reintroduced, a plant that is excellent at capturing carbon. 'To gain the designation as an LNR, the old harbour would need to have sufficient wildlife value so work will be carried out to see if it reaches that threshold. 'Any sewage discharge into the area is a matter for Dwr Cynru/Welsh Water and Natural Resources Wales and we will work with them to investigate this.' Article continues below
