IFFCO - A SUCCESSFUL COOPERATIVE IN INDIA AND BEYOND

G N Saxena

Director (Cooperative Development)

IFFCO, India

National Retail Consumer Conference[ 24th February, 2013]

IFFCO- OVERVIEW

A MULTI- STATE COOPERATIVE SOCIETY INCORPORATED ON 3RD

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.

GROWTH OF IFFCO

* AS ON 31ST MARCH, 2012

PRODUCTION

MANUFACTURING UNITS (FIVE)

UNITS YEAR PRODUCT PROD. CAPACITY

1.KALOL UNIT - (1975) - UREA - 0.55 MILLION TONNES

2.KANDLA UNIT - (1975) - NPK/DAP - 2.45 MILLION TONNES

3.AONLA UNIT - (1988) - UREA - 2.00 MILLION TONNES

4.PHULPUR UNIT - (1981) - UREA - 1.70 MILLION TONNES

5.PARADEEP UNIT - (2005) - NPK/DAP - 1.90 MILLION TONNES

EVERY FOURTH BAG OF UREA AND EVERY THIRD BAG OF NPK/DAP PRODUCED IN INDIA IS OF IFFCO.

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 MATERIALSDURING 2011-12

UREA : 6.8 MILLION TONNESNPK/DAP : 5.4 MILLION TONNESTOTAL : 12.20 MILLION TONNES

FINANCIAL PERFORMANCE

DURING YEAR 2011-12*

TURNOVER Rs. 255990 MILLION(£ 3200MILLION)

PROFIT BEFORE TAX Rs. 10177.80 MILLION(£ 127 MILLION)

PROFIT AFTER TAX Rs. 7721.80 MILLION(£ 96 MILLION)

NET WORTH Rs. 56453.70 MILLION

(£ 705 MILLION)

* AS ON 31ST MARCH, 2012

DIVIDEND

COMMENCED PAYING DIVIDEND TO ITS SHAREHOLDERS FROM

THE VERY FIRST YEAR OF GOING INTO COMMERCIAL

OPERATIONS IN 1975.

CONTINUOUSLY FOR LAST 38 YEARS , IFFCO IS PAYING DIVIDEND

TO ITS MEMBERS.

FOR THE LAST CONSECUTIVE ELEVEN YEARS, IFFCO IS PAYING

DIVIDEND @ 20% (MAXIMUM PERMISSIBLE DIVIDEND AS PER

BYE-LAWS) TO ITS MEMBER SOCIETIES.

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

OUR CONCERNS

EMPOWERMENT OF MEMBER SOCIETIES & FARMERS

IMPROVEMENT IN BUSINESS EFFICIENCY

AGRICULTURAL PRODUCTIVITY

ENVIRONMENT

DEPLETING SOIL HEALTH

ADHERENCE TO COOPERATIVE PRINCIPLES AND SUSTAINABLE DEVELOPMENT

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

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….

MEMBER EMPOWERMENTENHANCED 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”.

IFFCO- DIVERSIFICATIONMULTIPLE

DIVERSIFICATION

ONE AIM :

TO EMPOWER THE FARMERS AND

STRENGTHEN THE COOPERATIVE MOVEMENT

IFFCO ASSOCIATES - INDIA

IFFCO-TOKIO GENERAL INSURANCE COMPANY LTD.

IFFCO KISAN SANCHAR LTD.

IFFCO HOLDS 72.64% SHAREHOLDING WITH INVESTMENT OF Rs. 3945.80 MILLION (£ 49 MILLION).

CATER THE INSURANCE REQUIREMENT OF THE FARMERS.

IFFCO HOLDS 72.99% SHAREHOLDING WITH INVESTMENT OF Rs. 36.5 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. 75440 MILLION (£ 943MILLION).

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.

277.50 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.

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….

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. 3290.80 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. 2705.40 MILLION (£ 34 MILLION) WITH EQUITY SHAREHOLDING OF 27 PERCENT.

EXPECTED TO START PRODUCTION IN 2013.

INDUSTRIES CHIMIQUES DU SENEGAL, SENEGAL

IFFCO HOLDS 18.54% SHAREHOLDING WITH INVESTMENT OF Rs. 803.7 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….

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

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 2017.

IFFCO CANADA ENTERPRISES LTD., CANADA

CONTINUED….

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 2011-12.

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

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

IFFCO - PRESENCE IN INDIA

COVERS WHOLE INDIA

ZONAL OFFICE : 5

STATE OFFICE : 20

AREA OFFICE : 70

MANUFACTURING UNITS

GLOBAL PRESENCE

CANADA

PERU

SENEGAL

JORDAN

OMAN

DUBAI

AUSTRALIA

FUTURE PLANS – VISION 2015TO 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.

INDIA’S FIRST AGRI-BASED SEZ IN NELLORE DISTRICT OF ANDHRA PRADESH.

SPREAD OVER APPROX. 1000 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

BUSINESS OPPORTUNITIES

PROCESSING OF CEREALS &

PULSESPROCESSING OF FRUITS AND

VEGETABLESAQUALCULTUREMEAT AND POULTRYDAIRY PROCESSINGMEDICINAL AND AROMATIC

PLANTSFEED MANUFACTURINGNUTRACEUTICALS AND FOOD

ADDITIVESSPICES

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.

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 .

INDIA’S POSITION IN WORLD AGRICULTURE