ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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EPW Research Foundation GODAVARI FERTILISERS AND CHEMICALS Reduced Turnover WITH the government decontrolling phosphatic and potassic fertilisers in August 1992 and decanalising import of di-ammonium phosphate (DAP) allowing imports under open general licence with ziero rate of duty from September"!992, this company's bottomline was affected drastically in 1992-93. Though the company produced 3,46,000 tonnes of DAP against the installed capacity of 3,00,000 tonnes achieving a capacity utilisation of 115.1 per cent as against 114.2 per cent last year, turnover which increased by more than 50 per cent in 1991-92 dropped by 30 per cent mainly due to the withdrawal of subsidy by the government on manufactured DAP as also the fall in sale volume in the industry as a whole. In spite of a fall in DAP consumption due to the decontrol of phosphatic and potassic fertilisers and the consequent increase in DAP prices with the simultaneous reduction in the price of urea by 10 per cent, the company maintained its leadership position in DAP sales in Andhra Pradesh, its primary market, by selling 2.44 lakh tonnes of DAP as against 2.12 lakh tonnes last year. Further, higher consumption of urea in the country led to better margins and the company was unable to obtain urea from the local producers who preferred to market it directly leading to a lower sale of 75,155 tonnes only compared to 1.94 lakh tonnes in the previous year Due to a less than proportionate fall in operating expenses, operating profit fell by 22 per cent, A sharp increase in short- term loans with the company utilising maximum credit limits from banks in order to meet working capital requirements resulted ih a 13 per cent rise in interest charges and while the company managed to wipe off Rs 10 crore of its accumulated losses last year when net profit saw a more than two fold increase, earnings fell by a phenomenal 98 per cent

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