RASHTRIYA CHEMICALS

FERTILISERS LTD.
Business Research Methods

Himanshu Gupta
1802082
Table of Contents
OVERVIEW .......................................................................................................................................................2
Overview
RCF is a leading fertilizer and chemical manufacturing company in India in the Public Sector. It was
established on 6th March, 1978 on the reorganization of erstwhile Fertilizer Corporation of India Ltd.
into five new companies viz. Fertilizer Corporation of India (FCI), Hindustan Fertilizer Corporation
Limited (HFC), Projects & Development India Limited (PDIL), National Fertilizers Limited (NFL) and
Rashtriya Chemicals & Fertilizers Limited (RCF). Presently the authorized share capital of RCF
is Rs. 800 Crore & paid up capital of Rs. 551.69 Crore. Company has been accorded coveted
“Miniratna” status in 1997.

Company operates two units viz. one at Trombay (Mumbai) and the other one at Thal, Raigad district,
about 100 KM from Mumbai. Company has portfolio of products which includes Urea, Complex
Fertilizers and Industrial Chemicals. The Ujjwala Urea and Complex fertilizer Suphala brands of
fertilizers manufactured by RCF carry high brand equity and are recognized brands all over the
country. These products are taken to the farthest corner of the country by extensive RCF dealers
network spread throughout the country.
Besides Urea and Complex fertilizers, RCF also produces bio-fertilizers, micronutrients and 100%
water soluble fertilizers. Apart from these products, RCF produces 20 industrial chemicals such as
Methanol, Ammonium bicarbonate, Methyl Amine, Formic Acid, Dimethyl Formamide etc. which find
elaborate applications in many industries like dyes, solvents, leather, pharmaceuticals and a host of
other industries.

RCF always strives for upkeep of the plants through modernizing and upgrading
technology. Revamping and de-bottlenecking is the secret that has kept the company thriving for four
and a half decades. As part of modernization, RCF has modernized its Ammonia – I, Nitric Acid,
Methanol and ANP plants at its Trombay unit. This has facilitated plants to sustain operations and
meet technological challenges of improved efficiency, lower energy consumption and maintain
environmental norms. It has also resulted in company achieving the highest standards of safety and
product quality. Company has also completed another ambitious project viz. Ammonia revamp at Thal
unit which enabled company to produce an additional 3.0 Lakh MT of Urea and save precious foreign
exchange.

Every year RCF signs Memorandum of Understanding (MoU) with Government of India. The
performance is evaluated independently by the Department of Public Enterprise. RCF has been
consistently achieving best rating of “Excellent” since 2002-03.
Vision and Mission

Vision:
To be the world class corporate in the field of fertilizers and chemicals with dominant position in
Indian market, ensuring optimal utilization of resources taking due care of environment and
maximizing value of stake holders.
Mission:
Exponential growth through business excellence with focus on maximizing stakeholder value by
manufacturing and selling fertilizers and chemicals in a reliable, ethical and socially responsible
manner.

Financial Performance

Industrial / Business Operations

(In Rs. Crore)

Parameter 2012-13 2013-14
(upto December 2013) ##

Total Income 7019.78 4811.27

Profit before Tax 380.12 147.57

Net Profit 280.90 97.41

 Dividend 96.81 -
Net-Worth 2355.29 2452.76
## As accounts are yet to be finalized provisional data cannot be furnished.
Physical Performance:
(In MT)
Product Production Capacity Production Performance
2012-13 2013-14
Urea (Thal) 20,00,000 19,51,200 19,93,800
Urea 3,30,000 3,84,110 3,52,910
(Trombay)
Suphala 4,20,000 4,74,685 3,33,295
(15:15:15)
Suphala( 2,70,000 1,35,329 1,84,125
20:20:0)

Performance Highlights

Trombay Unit:
Following records were achieved during year 2013-14:
Yearly Highest Production:

Sr. No. Plant New record Previous Best

1 Ammonia-I 1,29,915 MT 1,20,050 MT in 2011-12

2 STP 52,13,690 M3 47,98,760 M3 in 2012-13

3 TG Power 89,538 MWH 85,144 MT in 2011-12

4 Water Soluble MAP 382.22 MT 286.65 MT in 2012-13

5 Liquid Biola 1,07,340 Lit 60,720 Lit in 2012-13

6 Microla 263,530 Lit 2,10,000 Lit in 2012-13

Lowest Ever Specific Energy Consumption: (MKCal / MT)

Ammonia-I:
 Period New record Previous best
Yearly 9.805 10.154 in 2011-12

Urea:

Period New record Previous best

Yearly 7.072 7.096 in 2012-13

Thal Unit:

Yearly Highlights:
 Successful commissioning of the third phase of Thal Ammonia revamp scheme. After this daily
production of Urea has crossed 6,000 MT.
Following records were achieved during year 2013-14.

Yearly Highest Production:

Plant New Record Previous best
Urea 19,93,800 MT 19,51,200 MT in 2012-13

Lowest Ever Specific Energy Consumption: (MKCal / MT)

Ammonia:
Period New record Previous b
Yearly 8.596 8.848 in 20

Urea
Period New record Previous b
Yearly 6.100 6.220 in 20

Strategic Issues
Some of the strategic issues affecting the company are as follows:
 High cost of domestic gas
 Controlled regime where MRP of Urea is fixed.
 Inadequate gas supply of domestic gas to be made up with purchase of costly imported LNG.
Import dependence on Rock Phosphate and Potash.
Human Resource Management
a) Manpower as on 31st March 2014:
Group Total Employees Number of Employees Belonging to
SC ST Ex-Service PH
A 1453 223 52 1 11
B 1241 156 80 2 4
C 1159 154 114 3 19
 D 114 9 11 1 4
Total 3967 542 257 7 38

b) Redressal of Public Grievances and Welfare Measures.

Company has put in place highly effective Grievance Redressal System. Any citizen having complaints
in respect of the production or services rendered may approach the Company. Similarly any aggrieved
customer / dealer or any other citizen can approach the Company for any failure of the quality / price
charged / conduct of any officer / employee and will be dealt as under.
The grievances can be addressed to a special officer of the Company not below the rank of Dy. General
Manager who will act as the Nodal Officer for redressal. The name, address and telephone No. of the
officers are available on Internet on Company’s website www.rcfltd.com. It is assured that the Nodal
Officer will immediately take up the issue with the concerned department and appropriate action will
be initiated within seven days from the date of receipt of the complaint or an appropriate reply is sent
within seven days as the case may warrant.
A separate Grievance Redressal System is developed by the Company to handle issues related to staff
also. For this a statutory Grievance Redressal Committee has been formed. This committee comprises
equal representatives from Management and Workmen. A Grievance Cell has also been formed, where
all employees can register their grievances and get replies within two weeks.
1. i. Welfare of Minorities:
RCF has policy whereby a representative of the minorities is included in the Recruitment Selection
Board.
1. ii. Welfare, Development and Empowerment of Women:
RCF as an organization has always been fair in treating employees without any gender bias.
Opportunities for growth, training, challenging jobs, learning are equally available to both men and
women employees of RCF. There are considerable number of Women in the batch of apprentice
trainees in technical areas.
Women are working in technical / non-technical / managerial positions and some of them have risen
to the level of top management positions in the organization.
All the welfare and employee benefit schemes are equally applicable to male and female employees of
RCF.
Under the special schemes and policies for women employees RCF has set up
 Special Cell for Women Employees (as per Communication from National Commission on Women)
 Committee for Sexual Harassment Cases (as per Supreme Court Guidelines)
 Special Medical check-ups/camps.
All the benefits in accordance with the legal requirements such as Maternity Benefits, Nursing Breaks,
etc. are given to women employees.
RCF is one of the pioneer members in the Forum of Women in Public Sector (WIPS) since its inception
(1990). It is a corporate member of this forum and has been representing in all activities of the forum
with total support and participation in all activities. Some RCF women officers have been working
with the forum as heads of task forces members of committees and have contributed in policy making
and development of women to a great extent. Many women employees in the company have won
awards also for performance excellence.
 As a part of regular training, RCF incorporates awareness building for all officers (Men and Women)
on the Sexual Harassment Guidelines and also covers gender sensitization issue.
1. iii. Welfare of SCs and STs:
The guidelines regarding the reservation and in Recruitment and Promotion for SCs and STs are
followed.
c) Recruitment and Training (2013-14):
At RCF, recruitment is carried out only after thorough study of the manpower requirement across
various domains. There is comprehensive system in place to identify the training needs of the
employees and based on the analysis and feedback, various training sessions are organized for their
professional advancement. Company also organizes various training sessions which help personal
growth of employees such as financial literacy, environmental awareness etc. Company has full-
fledged training centre where not only company employees but large number of students are also
given industrial training as a part of industrial academic interface.

MARKETING PERFORMANCE

Fertilizer Division
Your Company achieved sales volume of 30.49 lakh MT during 2018-19 as compared to 30.65 lakh MT
during the previous year. Your Company sold 23.89 lakh MT of Urea, 5.26 lakh MT of Suphala 15:15:15,
0.01 lakh MT of Suphala 20:20:0 and 1.34 lakh MT of other bought out products such as DAP, MOP
etc., compared to 25.10 lakh MT of Urea, 4.68 lakh MT of Suphala 15:15:15, 0.03 lakh MT of Suphala
20:20:0 and 0.83 lakh MT of other bought out products during the previous year. The total sale of
manufactured fertilizers during 2018-19 was 29.15 lakh MT as against 29.82 lakh MT during the
previous year.
Sales of manufactured fertilizers registered reduction of 2.21% over previous year owing to poor
agro-climatic conditions and glut of fertilizers in the market.

Industrial Products Division

Industrial Products Division achieved sales turnover of `955.16 Crore as against `783.72 Crore during
the previous year. Your Company has achieved highest turnover of IPD products due to increase in
sale of Ammonium Nitrate (Melt), Dilue Nitric Acid, ABC, Formic Acid, Methanol, & CNA etc.. Due to
higher cost of operations on account of increase in gas prices, production of some products like
Methylamines at Trombay and DMF at Thal was suspended.

Exports
Considering the nature of products manufactured by your Company and indigenous demand, the
scope for export is very limited. High cost of production is the main restraining factor for venturing in
the international market, as it renders our products unviable compared to lower cost of imports of
similar products. However, your Company has been successful in popularizing our ABC brand in the
overseas market through third party export. During financial year 2018-19, your Company has done
third party export of ABC to the tune of `41.32 lakh as against `41.06 lakh during the previous year.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

As at the end of the financial year to which the Balance Sheet of the Company relates and the date of
this report, following material changes have occurred:
Gas Generator, one of the major component of GTG of both GTG/HRSG Units of Thal plant is under
shutdown due to technical failure. There is no major impact on the production of Thal Urea as
Company had switched over from GTGs to Turbo Generator Units. However, it will result in higher
energy consumption by 0.30 Gcal / MT of Urea.
Company has taken the necessary corrective actions for repair & restoration of Gas Generators as well
as buying one new Gas Generator unit. One GTG will be put up in to operation by August 2019.

RISK MANAGEMENT
Pursuant to Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the Company has framed a Risk Management Policy for risk assessment and
minimization procedures. The Risk Management Policy developed with the objective of having a
balanced approach towards business plan and mitigating the associated risks, is in place. The system
identifies better management practices to ensure greater degree of confidence amongst various
stakeholders and facilitates good Corporate Governance practice. All risks associated with Operations,
Environment, Finance, Marketing, Human Resource, Legal, Information Technology Security, Projects
etc., are continuously monitored. The degree of impact of the perceived risks is further graded into
high, medium and low and the probability of the occurrence of each risk is also classified on regular
basis. In order to mitigate losses arising out of such perceived risks, appropriate procedures are being
adopted to contain the risks. Also the practices adopted during emergencies, including the
communication system and mode of disseminating information are periodically reviewed and
updated to minimize the impact on the Company. Quarterly report in respect of the same is presented
to the Board.

MAJOR EXPANSION AND DIVERSIFICATIONS

Company is planning to undertake major projects as under:

PROJECTS COMPLETED

Gas Turbine Project at RCF Thal

New Energy Norms have become effective for Thal Unit from 01.04.2018 which has adversely affected
profitability of your Company. To reduce the impact on profitability due to downward revision in
energy norms, your Company intends to further reduce the specific energy consumption in its
Ammonia and Urea Plants at Thal. As a step in this direction, your Company has set-up and
commissioned Gas Turbine Generator (GTG) of 2 x 25 MW along with Heat Recovery Steam Generator
(HRSG) of 2 x 100 MTPH capacity in April 2018. As a part of this project, some of the steam turbine
drives are replaced with motors. The estimated energy saving is 0.35 Gcal/MT of Urea and the project
cost is about `363.80 Crore. Energy saving of about 0.30 Gcal/MT of Urea has been achieved so far and
0.05 Gcal/MT will be achieved by Dec-2019 after installation of new motor driven ARC-IV compressor.
Vortex Mixer & Conversion Booster for Thal Urea Reactor
Scheme involved installation of Vortex Mixer and Conversion Booster in the Urea Reactors of all three
units aiming to reduce specific steam (medium pressure) consumption by 50 kg/MT of Urea.
Installation of Vortex Mixer with conversion booster in Urea reactor of Urea-11 was done in Jan. 2018
and that in Urea-21 and Urea-31 was
41st Jeeef<e&keÀ efjHeesì&/Annual Report 2018-19 done in November 2018. The energy saving
achieved is
0.026 Gcal/MT of Urea.
Vapour Absorption Machine (VAM) for Process Air Compressor in Ammonia Plant at Thal
Installation of VAM in PAC-I/II for suction air chilling for energy saving was implemented at a cost of
`10.13 Crore. VAM unit was commissioned with PAC-II in August 2018 and PAC-I in November 2018.
Energy Saving of 0.006 Gcal/MT of Urea is achieved.
Revamp of CO2 compressor at Thal
Revamping of CO2 compressors and turbines in all the three units is carried out with investment of
`107.90 Crore. Revamping of CO2 compressor was completed for Urea 11 in Jan. 2018 and revamping
of Urea-21 and Urea-31 was completed in Nov. 2018. Energy saving of 0.075 Gcal/MT of Urea is
achieved.
Vapour Absorption Machine (VAM) unit for CO2 Compressor at Thal
Installation of VAM for CO compressor suction cooling 2
was completed in December 2018 at the cost of `9.34 Crore. Energy saving of 0.009 Gcal/MT of Urea
is achieved.

PROJECTS UNDER IMPLEMENTATION:

Gas Turbine at Trombay:

New energy norms for Trombay Urea are sheduled to be effective from 01.04.2020. Your Company is
implementing some energy reduction projects in order to reduce impact on profitability. As a part of
this, your Company is installing Gas Turbines Generator (GTG) of 2 x 25 MW along with Heat Recovery
Steam Generator (HRSG) of 2 x 65 MTPH capacity, with an aim to reduce the specific energy
consumption in Ammonia and Urea Plants at Trombay.
WorkhasbeenawardedtoM/sThermaxon18.04.2018for
implementingtheprojectonLSTKbasis.Estimatedproject capital cost is about Rs.427 Crore. Excepted
Energy Saving is 0.30 Gcal/MT of Urea and expected completion by April 2020

Sewage Treatment Plant (STP) at Trombay

Water supply situation in Mumbai is getting more and more difficult day by day. Ensuring water
availability has become critical for the smooth functioning of the Trombay unit given the competing
demand for water in the city. Recognizing this, your Company is setting up one more new Sewage
Treatment Plant (STP) adjacent to the existing STP with a capacity to treat 22.75 Million Litres per
Day (MLD) of Municipal Sewage to produce about 15 MLD of treated water. A portion of the treated
water will be supplied to M/s Bharat Petroleum Corporation Ltd. (BPCL), on mutually agreed terms.
Estimated project capital cost is about `209 Crore and work is underway and expected completion by
September 2019.

Trombay Urea-V Plant Revamp (Casale Scheme)

The revamp scheme is based on End-to-End survey conducted by M/s Casale SA, Switzerland. The
project has been taken-up with following objectives:
  Reduction in specific energy consumption of Urea.
  Plant capacity: 1350 MTPD on sustained basis.
 Improving the waste water quality to Boiler Feed Water grade.
The revamp scheme is envisaged to result in energy saving of 0.19 Gcal/MT of Urea. Estimated project
capital cost is about `137.03 Crore and work is under execution and expected to be complited by March
2020.

Trombay Ammonia V Plant Revamp (KBR Scheme)

Your Company is implementing energy improvement schemes in Ammonia V plant at a total estimated
investment of Rs.71 Crore. The Basic Engineering is being done by KBR, USA and Detail Engineering
is being done by PDIL, India. The scheme is envisaged to result in energy saving of 0.25 Gcal/MT of
Ammonia and work is under execution and expected to be complited by March 2021.

Ammonia V PAC & CO2 compressor internals & turbine replacement at Trombay Unit
The drive turbines of Process Air Compressor (PAC)
and CO2 compressor are consuming more steam than design. Replacment of the drive turbines of PAC
and CO2 Compressors & revamp the present PAC and CO2 compressors by replacing only the internals
with improved design on proprietary basis through BHEL (OEM for these machines) likely to be
commissioned in June 2019. The expected energy reduction is around 0.199 Gcal per MT of Urea.
Estimated project capital cost is about `75.60 Crore.

New Process Air Compressor at Thal

Installation of one new higher capacity PAC-IV with GT- HRSG for energy saving at an estimated cost
of `346.88 Crore. Energy saving expected is 0.21 Gcal/MT of Urea. Project is expected to be completed
by October 2021.

Variable frequency drive (VFD) for HP Ammonia Feed pump at Thal

Installation of variable frequency drive on HP Ammonia feed pumps for power saving at estimated
cost of `6.60 Crore. Saving expected is 0.004 Gcal/MT of Urea. Scheme will be completed by June-2020
for all 9 Pumps

PROJECT UNDER CONSIDERATION

Organic Fertilizer Plant at Trombay

Your Company is contemplating to setup an organic fertilizer plant of 10,000 MT per Annum capacity
using STP & ETP sludge and gypsum, sourced in-house, at Trombay unit. The project shall serve dual
purpose of producing & marketing organic fertilizer as per Government mandate as well as the
disposal/management of STP & ETP sludge with the manufacturing of value added product giving
clean environment. Estimated Project Capital Cost is about `7 Crore.

Revamp of AN Melt Section of ANP Plant at Trombay

In order to reduce specific consumption of raw materials and improve the energy efficiency of the
plant, your Company is exploring possibilities to revamp AN Melt Section of ANP Plant at Trombay.

Corporate Social Responsibility and Sustainable Development

(CSR/SD)

RCF strongly believes in discharging its Corporate Social Responsibility and always targeted its CSR
activities towards empowering the under privileged.
A host of CSR activities are undertaken by the company. Some of them are elaborated below:

Running of School:
RCF has constructed a primary school at Thal as well as a secondary and higher secondary school in
Kurul (District Raigad). RCF is mainly concentrating on imparting training to the students in
Computer and Information & Technology subjects. Administratively the schools are run by Deccan
Education Society, Pune for which RCF pays the service charges to the Institute. Complete expenditure
incurred on infrastructure, educational material and salaries of the teachers is borne by RCF. Yearly
around 2000 children are benefited from this activity.

Drinking Water Supply to Nearby Villages:

RCF, Thal supplies drinking water to its nearby villages like Thal, Vaishet, Navgaon, Boris, Gunjis,
Kurul and Kihim Colony free of cost. The maintenance of water pipelines in the mentioned villages is
also looked after by the Company. Around 16000 residents of the villages are availing this facility given
by the Company.

Road Repairs of Villages:

RCF Thal has constructed asphalted roads in the villages adjacent to it at the time of factory erection
in the year 1980. These roads are straightway connected to Thal and Navgaon villages from the
boundary wall of the Company. Company does regular repairs of these roads as per the requirement
put forward by Gram Panchayat.

Mid Day Meal Scheme:

RCF is involved in providing Mid Day Meal to needy school students in and around Chembur area with
the purpose of providing proper nutrition to the students in those areas. ISKCON, a renowned Food
Relief Foundation, provides good and healthy meal to the needy children on behalf of RCF. In all 6000
students are availing the benefit of this scheme.

Mobile Medical Van:

In the baseline survey, undertaken by Tata Institute of Social Science(TISS) in Thal area, it was
highlighted that major problem in that area is lack of primary health facility for common ailments like
cough, cold and most of times villagers have to travel long distances to get the treatment for such
 minor ailments. Keeping this in view, it was decided to start Mobile Medical Van facility. The service
is run by premier health care organization Wockhardt Foundation
RCF has taken the initiative to commission the first mobile van in 2007 through Wockhardt
Foundation and since then, administered free primary health care to lakhs of needy people. On an
average 25 Villages are covered in weekly cycles and around 25000 Patients are benefited from free
medical services including supply of medicines. Through this facility ailments like Blood pressure,
Low Hemoglobin Levels, Malaria Hepatitis, Dengue, Typhoid and Diabetes, etc. are treated on regular
basis,
One doctor is always present in the van. It is equipped with GPS system to enable RCF to track it on
real time basis. It is properly equipped with medical instruments like Torch, Nebulizer, Stethoscope,
Blood Pressure Machine, Magnifying Glass, Weighing Scale, Pulse Oxymeter, Malaria Kit, Dengue Kit,
Hepatitis Kit, Typhoid Kit etc. Company has been operating 3 Medical vans around Chembur area and
one van is operated in the villages nearby Thal unit.

RCF SUPER- 30:

In the year, 2013-14 RCF has also started a unique programme under which Centre for Social
responsibility and Leadership has established a unit of Abhayanand Super 30 in Mumbai. Under this,
about 30 underprivileged but talented students of Greater Mumbai and Maharshtra state are provided
11 months of free residential coaching for admission to IIT/NIT and other premier engineering
colleges. Academic Mentor of this programme is Shri Abhayanand, co-founder of Super 30 Patna. For
selection under this programme annual income should be around Rs. 2.5 Lakhs. RCF through “Centre
for social responsibility and leadership” provides free boarding, food, normal medical care, technical
coaching and mentoring, counseling and daily-weekly mock tests. Programme is designed to ensure
radical transformation of 3 generations i.e. past, present and future.

Awards and other developments

Trombay Unit
 Greentech Safety Award – 2013 in Silver category for excellence in safety management among
fertilizer industries, instituted by Greentech Foundation was conferred upon RCF, Trombay Unit.
 Greentech Environment Excellence Award 2012-13 in Gold category, instituted by Greentech
foundation for outstanding performance in environment management.
 Sustainability Award 2013 for excellence in Safety, Health & Environment in Chemical &
Petrochemical Sector was conferred by FICCI.
 ‘Best Technical Innovation Award’ for Suphala Plant at FAI Annual Seminar 2013.

Thal Unit
 Greentech Environment Excellence Award – 2013 in Gold category was conferred upon RCF, Thal
Unit.
 Golden Peacock Award 2012-13 for excellence in Safety & Health by Institute of Directors.

Other Developments
 Some of the milestones achieved during the year are:
 Successful installation of solar power facility on rooftop at 5 company locations.
 Company has received 5,65,262 CERs during the year 2013-14 for its CDM project
implemented in Nitric Plants at Trombay unit.
 Completion of third phase of Ammonia revamp at Thal.