Vadodara-based Gujarat State Fertilisers and Chemicals Ltd. (GSFC) has lined up a capex of Rs 4,000 crore. VD Nanavaty, ED, Finance & CFO of the company said that a fourth plant for ammonium sulphate will be coming up by December this year. This plant will have an annual capacity of 1,32,000 metric tonne.

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Nanavaty said, “Ammonium sulphate fourth plant will be coming up this calendar year (December, 2023) and that is a 1,32,000 metric tonne fertiliser plant. It will run at full volume maybe next year. Similarly, we have a small plant of HX crystal that also will be coming up in stream next year.”

"Three more plants will be commissioned next year. These include HX crystal, sulphuric acid fifth plant, a solar power plant of 15 megawatt capacity and one more plant of urea (revamping) will also be coming up by say March 2025. These are with a capex of around Rs 450 crore.”

GSFC makes standard quality Caprolactam, which is well accepted globally. Nanavaty is optimistic about the pricing trends in the industry. "We are expecting the Caprolactam Benzene spreads to remain within the range of $800-900," he said.

One of the most promising predictions from Nanavaty was the expectation of substantial volume growth in the fertiliser segment. "We anticipate a growth of 15-20 percent in volume within the fertiliser segment," he affirmed.

Nanavaty observed a notable alteration in government policies related to subsidies, and its subsequent influence on margins. He explained that the preceding year was of significant importance for both the fertiliser sector and GSFC. The government displayed a commitment to safeguarding farmers, extending its support liberally to the industry through increased subsidies.

However, with input prices experiencing a decline, subsidies have also reduced correspondingly. While a direct comparison with the upcoming year isn't straightforward, the overall outlook for fertiliser margins remains optimistic. Nanavaty emphasised that the prospects for both fertilizer volume and margins appear promising or stable.

The stock was trading at Rs 163.35 on the NSE, up by 1.05 percent. It has lost over 1 percent in the last one months.

(Edited by : C H Unnikrishnan)

First Published:Aug 23, 2023 5:23 PM IST