The Fertilizer Industry is today going through a phase of
consolidation. Public enterprises like IFFCO have gained
almost half of the market share. The private players like
Godavari Fertilizer have acquired Deepak Fertilizer and
Tata Chemicals Limited has been merged with Hindustan
Lever Limited. Coromondel Fertilizers has also acquired
the Fertilizer Division of EID Parry in order to gain market
share. But, its growth seems to have stagnated and its
market share is stuck at around 3%. This case discusses
the strategies that Coromondel Fertilizers may have to
take in order to unshackle its stable market share.
FY2003-04 has been a mixed year. It started on a positive note with a normal monsoon in most parts of
the country. However, there was deficient rainfall in some parts of the country such as Tamil Nadu,
Karnataka and parts of Andhra Pradesh. A marginal increase in the consumption of fertilizers was
seen during the year, with urea increasing by 4.9% and Di-Ammonium Phosphate (DAP) by 1.6%.
The off take of Potash, however, fell steeply by about 11.4%, which was mainly due to non-availability
of stocks during the Rabi season.
Due to dramatic increase in the ocean freight and oil and natural gas prices, which impacted the
price of fertilizers as fertilizer inputs like ammonia, rock phosphate and phosphoric acid became more
expensive. In addition to the above factor, the availability of some of the key raw materials such as
sulphuric acid also posed difficulties in maintaining the production of certain grades of complex
fertilizers.
The next few years would see an increase in the consumption of DAP in the country by about 4%.
This, however, does not imply that India’s production of DAP will fall short of the demand as there is
adequate capacity in the short tem. |
