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India.com
4 hours ago
- Business
- India.com
Meet Indian-origin richest man in Indonesia, shares close connection with Lakshmi Mittal, his net worth is Rs 725000000000, name is…, his business is…
While many Indians have relocated abroad to start new lives, few have achieved phenomenal success abroad. Sri Prakash Lohia is one such name. A visionary entrepreneur, he left India with his father over 50 years ago and settled down in Indonesia, where he eventually developed a business empire. Who is the richest Indian-origin businessman in Indonesia? Born in Kolkata on August 11, 1952, Sri Prakash Lohia is the son of Mohan Lal Lohia and Kanchan Devi Lohia. Out of four siblings, he made a move to Indonesia in 1973 that changed his life. It was there that he established Indorama Synthetics. It was in 1976 when Indorama began to produce spun yarns, and thus started the foundation of what is now recognized as an international business empire. Sri Prakash Lohia went to Delhi University to pursue his higher education. According to Forbes, Lohia is an Indonesian citizen and currently resides in London, United Kingdom. His primary source of wealth comes from the petrochemicals industry. How is he connected to steel magnate Lakshmi Mittal? Lohia got married to Seema Mittal, the sister of steel tycoon Lakshmi Mittal. The couple has been blessed with 2 kids, a son, Amit Lohia, and a daughter, Shruti Hora. Sri Prakash Lohia, founder of Indorama Corporation, is known as a king in the petrochemical world. His company is a global leader in polyester and packaging. According to Forbes, his net worth is $8.7 billion. S P Lohia, the founder of Indorama Corporation, established PT. Indo-Rama Synthetics along with his father, Mr. M.L. Lohia, in 1975. He has over four decades of industrial experience and sits on the boards of various companies of the Group. He is also the Chairman of Indorama Ventures Public Company Limited (listed on the Thai Stock Exchange), as per the Indorama Corp. website. Indorama is a global producer of essential materials, which includes fertilizers, polymers, fibers, yarns, and medical gloves.
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.
The Star
29-04-2025
- Business
- The Star
Indorama to invest US$2bil in US as tariff talks go on
JAKARTA: A company rooted in Indonesia is slated to invest US$2 billion in a blue ammonia project in the United States as part of what President Prabowo Subianto called a 'win-win solution' in the ongoing tariff negotiations. Coordinating Economic Minister Airlangga Hartarto (pic), who led a top-tier Indonesian delegation to Washington, DC, for bilateral talks last week, revealed in a press conference on Monday (April 28) that Indorama, a diversified manufacturing company, would make the investment in the US state of Louisiana. He added that the US project had reached the front end engineering design stage, which is a planning phase one step on from the feasibility study. Airlangga noted that Indorama was already operating on US soil in the production of polyethylene terephthalate (PET), the most common thermoplastic polymer, which is used for packaging as well as for food and beverages containers, among many other products. 'Indorama is a multiproduct company. It started in Purwakarta and has expanded to various countries, including the US. In the US they have a PET facility, [where they make] bottles for soft drinks,' said Airlangga after making his first report to the President following his visit to the US. His team, which also included Finance Minister Sri Mulyani Indrawati and Foreign Minister Sugiono, kicked off talks expected to take up to 60 days and aimed at averting steep import tariffs that the US has threatened to impose on Indonesian-made products. According to its website, Indorama Corporation was established in Purwakarta, West Java, in 1975 as a cotton yarn spinning business. The company has since expanded to the production of polyester fibre, PET and ammonia, among other goods, with operations in numerous countries, including Turkey, Thailand, Nigeria, Uzbekistan, India, Malaysia, Senegal, Nigeria, Brazil and Georgia. Airlangga did not explain what might happen to Indorama's investment should the bilateral negotiations fail to satisfy the two parties. Airlangga presented Indorama's investment as part of Indonesia's package of concessions to the US, alongside exclusive tariff cuts for the benefit of US companies, deregulation and an offer to import more American-made products to balance out bilateral trade in a bid to placate the White House to avert exorbitant tariffs that the US has characterised as a 'reciprocal' measure. Indorama has not immediately responded to The Jakarta Post's request for comment. Airlangga said Indonesia had made a 'fair and square' offer to bump up imports of US products by 'more than US$19.5 billion', which would go beyond the US$18 billion by which Indonesian exports to the US exceeded imports from the US last year. Prabowo said earlier this month that the archipelago could import more wheat, soybeans and cotton, alongside liquefied petroleum gas, oil and oil drilling machines from the US. The bilateral negotiations with the US are to continue over the next two months with the aim of concluding them well before the 90 days US President Donald Trump has granted trading partners to come to terms with Washington. Airlangga revealed that critical minerals were discussed in the talks but refrained from divulging more details. Indonesia is the world's largest producer and holds the biggest estimated reserves of nickel, a key material for most of the batteries used in electric vehicles built by US-based carmaker Tesla Inc. Over the past weeks, the minister has refused to specify what the archipelago is asking of the US in the negotiations, but he disclosed in the press conference that the delegation was lobbying for equality. 'For Indonesia's main export commodities to America, Indonesia requests that our tariffs be equal with [those imposed on goods from] other countries, be they Vietnam or Bangladesh, so that we get an equal, level playing field,' said Airlangga. The reciprocal tariffs imposed by the US, but suspended for 90 days to allow for negotiations, vary from one country to another. Bangladesh and Vietnam are subject to rates of 37 and 46 per cent, respectively, both higher than the 32 per cent to be imposed on Indonesia. Much like Jakarta, Dhaka and Hanoi are engaging with Washington to try and avert the tariffs, which would make their goods much less competitive in the US, the world's largest consumer market. Airlangga said the government has formed three new task forces to 'expedite the negotiations' on investment and trade and to deal with economic security, domestic employment and deregulation. Speaking to the Post on Monday, Centre of Economic and Law Studies executive director Bhima Yudistira deemed Indorama's investment as a significant move and added that each investment made by Indonesian companies in the US could serve as a bargaining chip for Jakarta in the negotiations. BCA chief economist David Sumual concurred, telling the Post on Monday that Indonesia's offshore investments had mainly concentrated on emerging markets of the Global South, like China, as well as African and Middle Eastern countries. He went on to say that the key to negotiating with Washington was less about trade balancing deals and more about aligning with US strategic interests, like industrial reshoring, which could be done through investment on US soil. 'That [investment] is what Trump really wants, which is why he uses tariffs as a negotiation tool rather than quotas,' David said, explaining that Trump's real goal was to kick-start US reindustrialisation, which was a key interest for his electoral base in labor-intensive industries that had seen mass layoffs. He added that US allies, such as Japan and Taiwan, appeared to have recognised that offering investment was the key to pleasing Trump and that Indonesia's request for equal tariffs was the 'correct' tactic in the dealmaking process, the idea being that, if other countries succeed in reducing or eliminating US tariffs imposed on them, Indonesia should be afforded the same treatment. Bank Permata chief economist Josua Pardede said Indorama's US investment plan could be considered part of a package offer, 'for example, buying ammonia from a project in the US to support the growth of a sustainable fertiliser industry in [Indonesia].' The move showed a willingness on the part of Indonesia to invest in strategic sectors that could improve industrial relations between the two countries, he said. 'Thus, Indorama's investment signifies mutually beneficial economic diplomacy,' Josua told the Post on Monday. - The Jakarta Post/ANN
