Speaking to The Financial Express, Deepak Kumar Varma, chairman and managing director of the company says that consistent attempts in innovation and modernisation, apart from producing quality products are the reasons behind the enviable success of RCF. Excerpts:

On the availability of urea in the country and reasons for its recent global price crash
The demand of urea hasbeen on the rise with the present demand-supply gap amounting to 1.5 million tonnes per annum. A study indicates that there has to be a 4.5 per cent rise in the urea availability. By 2002, we will be urea deficient by four million tonnes. Meanwhile, the government policies of doubling agricultural production also hints at the increasing need of urea in India. There has been several reasons for the tumbling of prices worldwide, like China's withdrawal from the global market, south east Asian currency crisis and oversupply of gas in countries like Malaysia and Bangladesh.

On self-sufficiency as far as the country's need for fertilisers is concerned
In terms of urea, the country is almost self-sufficient, and it may be noted that we produce about 93 to 95 per cent of this fertiliser in India. Last year the total consumption of urea in the country was between two and three million tonnes and we imported only about half-a-million tonne. This was done without compromising on food production on thecontrary this was when the country had registered a record food production. In phosphatic fertilisers, however, we are not self-sufficient. About 40 per cent of the fertilisers are produced in the country, while the rest has to be imported.

This is because we don't have phosphatic mines in the country.

On RCF's plans to set up a DAP plant in joint venture with other domestic firms in the country
No final decisions have been taken on the DAP plant which is at present under investigation and decision. The plant would be set up with an investment of Rs 400 crore in Rajasthan, in partnership with Hindustan Zinc Ltd and Rajasthan State Mining Corporation. RCF would pool in about 51 per cent of the investments and the balance would be divided between the other two companies.

On the company's expansion spree
We are planning to invest about 2,800 crore in a span of five years time. About Rs 500 crore would be spend for modernisation of existing units in Trombay and Thal, near Alibaug. Theexpansion plans of the company has already been approved by the government, especially for setting up another ammonia-urea plant in Thal. This plant, when commissioned would produce approximately 7.5 lakh tonnes of urea and in turn increase the present output capacity from 15 to 23 lakh tonnes, at a cost Rs 1,350 crore. The preliminary stage of work for these plants has already commenced.We are also part of a consortium to set up a 15-lakh tonne urea-ammonia plant in Oman. Next on our agenda is to set up a methylamene plant in joint venture with UCB Chemicals of Belgium. We are also planning similar joint ventures but it is too early to comment. All these ambitious projects are with the intention to increase our turnover from the present Rs 2,000 to Rs 5,000 crore in a period of five years.

On RCF's urea plant in Oman
We are `planning' to set up a plant to manufacture urea in the coastal area of Oman with an estimated cost of $1 billion (approximately Rs 4,000 crore). The project will be a jointventure with Oman Oil Company (OOC) and the domestic firm Kribhco. About 50 per cent of the cost would be pooled in by OOC, 25 per cent by RCF and the rest by Kribhco. We are also trying to rope in Iffco, in which case the latter 50 per cent would be shared among the three Indian companies. The plant would be set up with an equity of 33 per cent and debt of 67 per cent in a period of three years and would produce 14.7 lakh tonnes of urea and 330,000 tonnes of ammonia. The financial closure of the project is yet to be achieved and the final decision would be taken in two to three months time. Both the governments of India and Oman are very proactive and if implemented, this would be remarkable achievement, because this is the first project of this magnitude to be commissioned anywhere in the world by an Indian company.

On RCF's foray into research and development
In R&D, we are in the process of upgrading our products, relying on technology, especially computerisation. We also conduct farm-basedresearches, where our qualified agronomists and scientists work hand-in-hand with farmers to increase the yield of various crops. These are soil-based researches which include fertiliser consumption and management, water management and advice on seeds, apart from time management.

Apart from these our researches are also aimed at producing new products and fertilisers. Of late, we have setup farms to educate the farmers on various aspects of cultivation.On measures taken by RCF for environmental protection
Recently RCF has invested around Rs 300 crore for environmental protection, which includes development of a green belt in about 100 acres in Trombay. We have already replaced more than 80 per cent of our old equipment with environmental-friendly machines. We are also planning to replace the rest of our equipment within a span of six months. We have recently embarked on a unique project of diverting all the sewage pumped from the city into the Arabian Sea to our plants. This Rs 40 croreproject would process all the sewage and the water would be used in our plants for production. At present we are consuming municipal water for production, but once this project is completed, which would be within two months time, RCF would be using its own water. This way we would be saving at least three to four million gallons of water.

On the recently awarded Mini Ratna status and the company's ambition to bag the Nava Ratna status
It should be noted that just three years back RCF was just another government-owned company, without any growth. The turnover of the company was stagnant during this period, with a low profitability margins, not to mention expansions. RCF has come out of this stagnant growth era when other fertiliser companies have been declared sick. This is the only company in the country to have registered profits. RCF posted a profit even during the time of recession and has been recently referred by the Disinvestment Commission in the second round of government stake sell-offlots, which have already started.

For the last year, the RCF has been consistently rated good, our stringent policies in restructuring manpower, cost-effective measures, renovation and modernisation, apart from our enviable marketing strategies, helped us in getting Mini Ratna status. After achieving this, our next step is to bag Nava Ratna status, and taking into consideration our professional approach, I don't think it is an impossible task.