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Zuari-Chambal group still in race for NFL

Richa Mishra

NEW DELHI, Nov. 29

THE K. K. Birla-controlled Zuari-Chambal group has declared that it is still very much in the race for strategic buy-out of the Centres equity in National Fertiliser Ltd (NFL), notwithstanding the Department of Fertilisers recent move to drastically slas h the retention prices for the urea units of Zuari Industries and Chambal Fertilisers & Chemicals Ltd (CFCL) in Goa and Kota, respectively.

Whenever the Government proposes to go in for disinvestment, we are in reckoning, company sources told Business Line. Explaining the rationale behind the interest in NFL, sources said that the larger you are, the more flexible you can be.

The Department of Fertilisers had, on November 5, undertaken an interim downward revision in the retention prices for 13 urea plants, as part of efforts to contain the Centres spiralling fertiliser subsidy bill. Accordingly, the retention price of CFCLs Kota I unit was reduced from Rs 7,381 per tonne for April 1, 2000 to Rs 6,986 per tonne. The corresponding price reduction was even more drastic for Zuari Industries - from Rs 13,441 to Rs 12,586 per tonne.

The official, however, dismissed the impact of the retention price reduction on the two group companies as temporary. The sales of Zuaris fertiliser division for the year 2000-01 increased to Rs 1,173.81 crore from Rs 1,073.51 crore in the previous fisca l. The sales of CFCL increased by Rs 441 crore to Rs 1,803.75 crore (Rs 1,362.65 crore) during 2000-01 showing an increase of 32 per cent over the previous year.

The official said that there were no plans to merge Zuaris fertiliser division with CFCL, keeping in view the latters greater efficiency and lower retention price. The Zuari-Chambal group is focusing on building on the strengths of the two companies, he said, adding that the acquisition of NFL would add further to the size of the groups fertiliser business.

Already, the group was the largest fertiliser combine in the private sector, taking into account its combined production capacity, distribution network, and rural reach, with a total capacity of around two million tonnes per annum of urea of Indias total urea capacity of 20 million tonnes.

The two group companies have a distribution network consisting of 36,000 outlets spread over 10 States in North, West and South India.