Nagarjuna Fertilisers and Chemicals Limited (NFCL) to position itself as a nutrition solution provider

Nagarjuna Fertilisers and Chemicals Limited (NFCL) intends to emerge as a ‘nutrition solution provider’ after its business restructuring. The company has disclosed its future business strategy in its explanatory statement on the restructuring scheme for which it would obtain shareholders’ approval in a court convened meeting on 15 April.

The scheme envisages demerger of its oil business undertaking (which is primarily an upcoming refinery at present) into Nagarjuna Oil Refinery Limited (NORL). It also envisages merger of residual NFCL (fertilizer business) and associate associate IKisan Limited (IKL) into NFCL’s wholly owned subsidiary Kakinada Fertilizers Limited (KFL). KFL would be renamed as NFCL after 1 April 2011.

As put by NFCL in the explanatory statement, “The scheme envisages segregation of like business and demerger of unlike business. The segregation of like business involves merger of Ikisan Limited into Kakinada Fertilisers Limited (KFL) along with the Fertilizer sector of NFCL for achieving synergies in businesses, inorganic growth and capturing the untapped market share by enhancing the product portfolio, service offerings, customer base and market positioning and the demerger of the Oil Business into an independent company termed 'Nagarjuna Oil Refinery Limited (NORL).”

The demerger would leave a residual fertilizer business which needs to be consolidated with similar business in view of the changing fertilizer scenario arising out of the proposed policy amendments being expected to be made by the Government of India. In this regard NFCL needs to gear itself up to become a nutrition solution provider and possess substantial knowledge and data base, the statement adds.