GSFC

About GSFC


G.S.F.C. is one of the largest fertilizer manufacturing units in Asia, which was incorporated under companies Act 1956, on 15th Feb, 1962. G.S.F.C. was established with the objective of enhancing food production in the state of Gujarat which was food deficit at the time.

G.S.F.C. instant strive for products diversification on and value addition has created an product mix ranging from more than 24 brands of fertilizer to petrochemical, chemical, industrial gases, plastics, fibers and other products.


Translating G.S.F.C.'s philosophy is its vast network of plants that make its possible. This infrastructure took its first step in1967 with the setting up of 6 plants with an initial investment of Rs. 40 Crore. These six nitrogenous and phosphatic fertilizer plants started production of: ➢Ammonia
➢Urea
➢Ammonia Sulphate (AS)
➢Di-ammonium Phosphate(DAP)
➢Sulphuric Acid

➢Phosphoric Acid

Formation and growth


1969 – First Expansion The expansion of Ammonia and Urea production began with Phase II in1969 and an investment of Rs. 23 Crore. Was made to meet the increasing demand for Nitrogenous fertilizers.

1974 - Phase III Phase III began in1974 when diversification of products occurred. Plants to manufacture Caprolactam, Melamine, Nylon-6, Oleum - SO2 and OXO - Synthesis Gas unit and Purge Gas Recovery Unit were set up. With Phase III, G.S.F.C. became India's first & only Melamine producer. This provided the boost for further diversification to Nylons / Fibers / Melamine / MEK-Oxime and industrial gases like Argon Gas & Oxon Synthesis Gas.

1989 - Further expansion and diversification Three Co-generation units using LSHS and Natural Gas were set up. Also further expansion of Ammonia and Caprolactam production was initiated. Diversification into Fibers, Nylons, and Acrylic was completed and a DAP plant was also set up. This extensive diversification and expansion drive has been fuelled by G.S.F.C.'s compelling need to ensure full utilization of available resources while also maintaining its profitability and leadership status.

Composition


➢49% of State Government participation
➢51% of Public and Financial Institutions Today,

➢The Government’s involvement has come down to37.84% as on31st March 2009

GNFC: One of the Joint Venture


Gujarat Narmada Valley Fertilizers Company Limited is basically a joint sector company, with GSFC and Gujarat Government, holding 26% and 25% of the share Capital, respectively. GNFC is the largest fuel- based Ammonia plant and was the first largest single stream Urea plant in the world when commissioned. This project was set-up at Bharuch in the industrially-backward area with an investment of Rs.445 Crores and now it has become the largest complex among other industries by major diversification not only in fertilizers, but also in industrial products.


Analysis

Trading below 240 its book value for 09, guess I overlooked this stock and chose GNFC. I failed to realise two could have been better than one. The fundamentals of GCFC looks attractive. It has done a great job in reducing the debt levels to almost nil. For the eps of 62 and the cmp of 220, eps/cmp works around 28 %; and the roe/cmp is around 26%. If the earnings at current levels are sustainable then it is a good buy.

References: Project work by Vivek Negandhi on GSFC