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IFFCO - A SUCCESSFUL COOPERATIVE IN INDIA AND BEYOND G N Saxena Director (Cooperative Development) IFFCO, India National Retail Consumer Conference [ 24.

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Presentation on theme: "IFFCO - A SUCCESSFUL COOPERATIVE IN INDIA AND BEYOND G N Saxena Director (Cooperative Development) IFFCO, India National Retail Consumer Conference [ 24."— Presentation transcript:

1 IFFCO - A SUCCESSFUL COOPERATIVE IN INDIA AND BEYOND G N Saxena Director (Cooperative Development) IFFCO, India National Retail Consumer Conference [ 24 th February, 2013]

2 IFFCO- OVERVIEW A MULTI- STATE COOPERATIVE SOCIETY INCORPORATED ON 3 RD NOVEMBER 1967, AT THE INITIATIVE OF COOPERATIVE LEAGUE OF USA (CLUSA) NOW KNOWN AS NCBA; AND EFFORTS OF GOVERNMENT OF INDIA. WHOLLY OWNED BY THE MEMBER COOPERATIVE SOCIETIES. LARGEST PRODUCER & MARKETEER OF FERTILISERS IN INDIA, WITH ASSOCIATION OF ABOUT 40,000 MEMBER SOCIETIES & OVER 55 MILLION FARMERS.

3 GROWTH OF IFFCO * AS ON 31 ST MARCH, 2012

4 PRODUCTION MANUFACTURING UNITS (FIVE) UNITS YEAR PRODUCTPROD. CAPACITY 1.KALOL UNIT - (1975) - UREA MILLION TONNES 2.KANDLA UNIT - (1975) - NPK/DAP MILLION TONNES 3.AONLA UNIT - (1988) - UREA MILLION TONNES 4.PHULPUR UNIT - (1981) - UREA MILLION TONNES 5.PARADEEP UNIT - (2005) - NPK/DAP MILLION TONNES EVERY FOURTH BAG OF UREA AND EVERY THIRD BAG OF NPK/DAP PRODUCED IN INDIA IS OF IFFCO.

5 DISTRIBUTION OF FERTILISERS ONLY THROUGH THE COOPERATIVE SYSTEM:  STATE LEVEL APEX COOPERATIVE MARKETING FEDERATION ACTS AS WHOLESALER.  DIRECT SUPPLIES TO SOCIETIES IN SOME STATES.  158 IFFCO FARMERS SERVICE CENTRES. MARKETING CHANNEL SALE OF FERTILISER MATERIALS DURING UREA : 6.8 MILLION TONNES NPK/DAP : 5.4 MILLION TONNES TOTAL : MILLION TONNES

6 FINANCIAL PERFORMANCE DURING YEAR * TURNOVERRs MILLION (£ 3200MILLION) PROFIT BEFORE TAXRs MILLION (£ 127 MILLION) PROFIT AFTER TAXRs MILLION (£ 96 MILLION) NET WORTHRs MILLION (£ 705 MILLION) * AS ON 31 ST MARCH, 2012

7 DIVIDEND COMMENCED PAYING DIVIDEND TO ITS SHAREHOLDERS FROM THE VERY FIRST YEAR OF GOING INTO COMMERCIAL OPERATIONS IN CONTINUOUSLY FOR LAST 38 YEARS, IFFCO IS PAYING DIVIDEND TO ITS MEMBERS. FOR THE LAST CONSECUTIVE ELEVEN YEARS, IFFCO IS PAYING 20% (MAXIMUM PERMISSIBLE DIVIDEND AS PER BYE-LAWS) TO ITS MEMBER SOCIETIES.

8 IFFCO HAS A “REPRESENTATIVE GENERAL BODY (RGB)” WHICH AS PER LAW EXCERCISES THE RIGHTS OF THE GENERAL BODY. MEMBER SOCIETIES FIRST ELECT MEMBERS OF RGB (ABOUT 1000) AND RGB MEMBERS ELECTS THE ELEVEN DIRECTORS ON THE BOARD. THE COMPOSITION OF THE BOARD IN IFFCO IS AS FOLLOWS:- ELECTED DIRECTORS 11 DIRECTORS FROM STATE FEDERATION 10 FUNCTIONAL DIRECTORS 7 COOPTED DIRECTORS 2 (EXPERTS FROM FIELD) DIRECTORS AMONG THEMSELVES ELECT CHAIRMAN AND VICE- CHAIRMAN OF IFFCO. GOVERNANCE IN IFFCO TOTAL NUMBER OF DIRECTORS 30

9 OUR CONCERNS EMPOWERMENT OF MEMBER SOCIETIES & FARMERS IMPROVEMENT IN BUSINESS EFFICIENCY AGRICULTURAL PRODUCTIVITY ENVIRONMENT DEPLETING SOIL HEALTH ADHERENCE TO COOPERATIVE PRINCIPLES AND SUSTAINABLE DEVELOPMENT

10 SERVICE TO FARMERS MAIN THRUST OF SERVICE IS ON  PROMOTION OF BALANCED FERTILIZATION  TRANSFER OF MODERN AGRICULTURAL TECHNOLOGY TO THE FARMING COMMUNITY  SOIL REJUVENATION CAMPAIGN. CONDUCTS VARIOUS EXTENSION AND PROMOTIONAL ACTIVITIES.  FARMERS MEETINGS  ON-FARM DEMONSTRATIONS  CROP SEMINARS  SOIL TESTING CAMPAIGNS  FIELD DAYS

11 SEED MULTIPLICATION PROGRAMME VILLAGE ADOPTION PROGRAMME FARMERS VISIT TO RESEARCH INSTITUTES/ AGRI-VARSITIES, INTER- STATE AND MANUFACTURING PLANTS. DISTRIBUTION OF CRITICAL INPUT PACKAGE (CIP) KITS. SPECIAL PROJECTS ON LAND RECLAMATION, DRY LAND FARMING, WATERSHED MANAGEMENT PROJECT AND DEVELOPING WATER RESOURCES. CONTINUED….

12 MEMBER EMPOWERMENT ENHANCED PROFITABILITY OF MEMBER SOCIETIES THROUGH DIVIDEND ON THEIR EQUITY AND REBATES ON PRODUCT FOR THEIR ECONOMIC EMPOWERMENT. MARKETING OF PRODUCTS ENTIRELY THROUGH MEMBER COOPERATIVES HELPS IN IMPROVING THEIR ECONOMIC VIABLITY & BUSINESS CAPABILITIES. - HANDLING AND TRANSPORTATION OF FERTILISERS. - STORAGE OF FERTILISERS IN SOCIETIES WAREHOUSES. - INSURANCE BUSINESS -RURAL TELEPHONY PROVIDE ACCIDENTAL INSURANCE TO THE FARMING COMMUNITY THROUGH UNIQUE ACCIDENT INSURANCE POLICY“SANKAT HARAN BIMA YOJNA”.

13 IFFCO- DIVERSIFICATION MULTIPLE DIVERSIFICATION ONE AIM : TO EMPOWER THE FARMERS AND STRENGTHEN THE COOPERATIVE MOVEMENT FERTILISERSGENERAL INSURANCEINTERNATIONAL TRADINGSPECIAL ECONOMIC ZONEPOWER GENERATIONRURAL TELEPHONYFARM FORESTRYCOMMODITY EXCHANGES

14 IFFCO ASSOCIATES - INDIA IFFCO-TOKIO GENERAL INSURANCE COMPANY LTD. IFFCO KISAN SANCHAR LTD.  IFFCO HOLDS 72.64% SHAREHOLDING WITH INVESTMENT OF Rs MILLION (£ 49 MILLION).  CATER THE INSURANCE REQUIREMENT OF THE FARMERS.  IFFCO HOLDS 72.99% SHAREHOLDING WITH INVESTMENT OF Rs MILLION (£ 0.5 MILLION).  PROVIDE TELECOM SERVICES IN THE RURAL INDIA. IFFCO CHHATTISGARH POWER LTD  DIVERSIFIED INTO POWER SECTOR  THE PROJECT COST IS ESTIMATED AT Rs MILLION (£ 943MILLION).

15 NATIONAL COMMODITY & DERIVATIVE EXCHANGE  IFFCO HOLDS 8.88% SHAREHOLDING WITH INVESTMENT OF Rs. 135 MILLION (£ 1.6 MILLION).  FOR PROVIDING A PLATFORM FOR FARMERS TO GET REMUNERATIVE PRICES FOR THEIR AGRI COMMODITIES. NATIONAL COLLATERAL MANAGEMENT SERVICES LTD.  IFFCO HOLDS 20.64% SHAREHOLDING WITH INVESTMENT OF Rs MILLION (£ 3.5 MILLION).  PROVIDES WAREHOUSING AND COLLATERAL RISK MANAGEMENT SERVICES. CONTINUED…. UNIVERSAL COMMODITY EXCHANGE LTD.  IFFCO ACQUIRES EQUITY STAKE WITH INVESTMENT OF Rs. 150 MILLION (£ 1.8 MILLION).  TO ENSURE THAT FARMERS GET MARKET PRICE FOR THEIR AGRI COMMODITIES.

16 INDIAN POTASH LTD.  IFFCO HOLDS 34% SHAREHOLDING WITH INVESTMENT OF RS. 27 MILLION (£ 0.4 MILLION).  ENGAGED IN MARKETING OF POTASH AND IMPORTED FERTILISERS IFFCO KISAN BAZAR & LOGISTICS LTD. IKBLL  WHOLLY OWNED SUBSIDIARY OF IFFCO WITH INVESTMENT OF Rs.150 MILLION (£ 1.80 MILLION).  INCORPORATED WITH OBJECTIVE TO UNDERTAKE BUSINESS IN AGRI-INPUTS & CONSUMER GOODS.  EXPAND ITS ACTIVITY INTO SETTING UP & DEVELOPMENT OF LOGISTICS, INFRASTRUCTURE, INDUSTRIAL AND COMMERCIAL STRUCTURES. CONTINUED….

17 IFFCO ASSOCIATES - OVERSEAS OMAN INDIA FERTILISER COMPANY, OMAN JORDAN INDIA FERTILIZER COMPANY, JORDAN  CO-PROMOTED BY OMAN OIL COMPANY SAOC.  IFFCO HOLDS 25% SHAREHOLDING WITH INVESTMENT OF Rs MILLION (£ 41 MILLION).  MANUFACTURES AMMONIA AND UREA.  JOINT VENTURE COMPANY, WITH JORDAN PHOSPHATE MINES COMPANY LTD (JPMC) TO SET UP A PHOSPHORIC ACID PLANT AT ESHIDIYA IN JORDAN.  INVESTMENT OF Rs MILLION (£ 34 MILLION) WITH EQUITY SHAREHOLDING OF 27 PERCENT.  EXPECTED TO START PRODUCTION IN 2013.

18 INDUSTRIES CHIMIQUES DU SENEGAL, SENEGAL  IFFCO HOLDS 18.54% SHAREHOLDING WITH INVESTMENT OF Rs MILLION (£ 10 MILLION).  MANUFACTURES PHOSPHORIC ACID FOR EXPORTS & PHOSPHATIC FERTILISERS FOR DOMESTIC CONSUMPTION.  A WHOLLY OWNED SUBSIDIARY SET UP IN DUBAI, WITH INVESTMENT OF Rs. 12 MILLION (£ 0.2 MILLION).  HANDLE IMPORT, EXPORT & LOGISTIC SUPPORT FOR VARIOUS FERTILISER, FERTILISER RAW MATERIALS & INTERMEDIATES. KISAN INTERNATIONAL TRADING FZE, DUBAI CONTINUED….

19  ACQUIRED ABOUT 15% STAKE IN AMERICAS PETROGAS INC. (API), CANADA, ALONGWITH 20% STAKE IN ITS SUBSIDIARY GROWMAX AGRI CORP., PERU.  API IS HAVING OIL & GAS FIELDS IN ARGENTINA AND POTASH PROJECT IN PERU AMERICAS PETROGAS INC., CANADA  IFFCO ENTERED INTO A SHAREHOLDERS AGREEMENT FOR EQUITY PARTICIPATION IN LEGEND AND IMPORT OF ROCK PHOSPHATE FROM LEGEND’S MINING PROJECT. CONTINUED…. LEGEND INTERNATIONAL HOLDING INC., AUSTRALIA

20  INTER- REGIONAL COLLABORATION BETWENN LA COOP FÉDÉRÉE COOPERATIVE OF CANADA & IFFCO.  ESTABLISH AN UREA FERTILISER PLANT IN BÉCANCOUR, CANADA WITH A COMBINED INVESTMENT OF $1.2 BILLION (£ 0.80 BILLION).  EXPECTED TO START COMMERCIAL PRODUCTION IN IFFCO CANADA ENTERPRISES LTD., CANADA CONTINUED….

21 IFFCO SOCIAL ASPECTS IFFCO IS COMMITED TOWARDS SUSTAINABLE ECONOMIC DEVELOPMENT, BALANCING CAPITAL GAINS WITH SOCIETAL DEVELOPMENT. IFFCO UNDERTAKES ACTIVITIES IN THE AREA OF COMMUNITY DEVELOPMENT, ENVIRONMENTAL PROTECTION, HEALTH CARE, MEDICAL FACILITIES, LITERACY ENHANCEMENT PROGRAMS. IFFCO SPENT Rs. 426 MILLION (£ 5 MILLION) ON VARIOUS SOCIAL DEVELOPMENT ACTIVITIES DURING

22 COOPERATIVE RURAL DEVELOPMENT TRUST INDIAN FARM FORESTRY DEVELOPMENT COOP. LTD.  IMPROVE THE SKILLS OF THE FARMERS ON VARIOUS ASPECTS OF CROP PRODUCTION  ORGANISING TRAINING WORKSHOPS  SOIL TESTING AND ANALYSIS  DEVELOPMENT OF FARM FORESTRY  NATURAL RESOURCE CONSERVATION & MANAGEMENT  SUSTAINABLE RURAL LIVELIHOOD IMPROVEMENT  WOMEN EMPOWERMENT  MICRO- ENTERPRISE DEVELOPMENT VEHICLES FOR SOCIAL DEVELOPMENT

23  BRAIN TRUST OF IFFCO  PROMOTE COOPERATIVE DEVELOPMENT  ENHANCE TECHNICAL & BUSINESS COMPETENCE OF COOPERATIVES  ORGANIZE TRAINING WORKSHOPS  PROMOTES RURAL ART AND CULTURE.  PROVIDE RELIEF & REHABILITATION TO VICTIMS IN THE EVENT OF NATURAL CALAMITIES  UNDERTAKES PROGRAMMES FOR HEALTH CARE & CRITICAL MEDICAL ATTENTION OF NEEDY FARMERS. IFFCO FOUNDATION CONTINUED…. IFFCO KISAN SEWA TRUST

24 IFFCO - PRESENCE IN INDIA COVERS WHOLE INDIA ZONAL OFFICE : 5 STATE OFFICE : 20 AREA OFFICE : 70 MANUFACTURING UNITS

25 GLOBAL PRESENCE CANADA PERU SENEGAL JORDAN OMAN DUBAI AUSTRALIA

26 FUTURE PLANS – VISION 2015 TO STAND AS A GLOBAL LEADER IN FERTILIZERS PRODUCTION THROUGH EXPANSION OF EXISTING MANUFACTURING UNITS AND SETTING OF FERTILISER PRODUCTION FACILITIES IN INDIA AND ABROAD. STRENGTHENING RAW MATERIAL SOURCING THROUGH STRATEGIC JOINT VENTURES & SYNERGISTIC ACQUISITIONS IN INDIA & ABROAD. DIVERSIFICATION INTO OTHER PROFITABLE SECTORS AND USEFUL TO FARMERS. TO HELP THE COOPERATIVE SOCIETIES BECOME ECONOMICALLY STRONG AND PROFESSIONALLY MANAGED.

27 INDIA’S FIRST AGRI-BASED SEZ IN NELLORE DISTRICT OF ANDHRA PRADESH. SPREAD OVER APPROX HECTARES. LOCATIONAL ADVANTAGE. BASED ON THE CONCEPT OF INTEGRATED AGROPARK. CUSTOM DUTY, EXCISE DUTY, SERVICE TAX, SALES TAX EXEMPTIONS. INCOME TAX HOLIDAY FOR UPTO 15 YEARS. WORLD CLASS COMMON INFRASTRUCTURE. IFFCO KISAN SEZ

28 BUSINESS OPPORTUNITIES  PROCESSING OF CEREALS & PULSES  PROCESSING OF FRUITS AND VEGETABLES  AQUALCULTURE  MEAT AND POULTRY  DAIRY PROCESSING  MEDICINAL AND AROMATIC PLANTS  FEED MANUFACTURING  NUTRACEUTICALS AND FOOD ADDITIVES  SPICES 20 KM NORTH OF NELLORE TOWN. -LOCATED ON NH-5 CONNECTING TWO LARGE METROS. -HAS THE MOST PROMISING SEA PORT, KRISHNAPATNAM AT A DISTANCE OF JUST 40 KM.

29 GOVT. SCHEMES FOR FDI’s IN RETAILING UNTIL 2011, FDI IN MULTI-BRAND RETAIL IN INDIA WAS PROHIBITED, EVEN SINGLE BRAND RETAIL WAS LIMITED TO 51% OWNERSHIP. IN JANUARY, 2012 GOVT. OF INDIA APPROVED 100% OWNERSHIP FOR SINGLE BRAND STORES WELCOMING ANYONE IN WORLD TO INNOVATE IN INDIAN RETAIL MARKET PROVIDED RETAILERS SOURCE 30% OF ITS GOODS FROM INDIA. IN SEPTEMBER, 2012 GOVT. OF INDIA OPENS FDI IN MULTI-BRAND RETAIL TRADING UPTO 51%, SUBJECT TO APPROVAL BY INDIVIDUAL STATES. 10 STATES HAVE ALREADY GIVEN THEIR APPROVAL.

30 INDIA’S POSITION IN WORLD AGRICULTURE

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