Murugappa group eyeing GFCL, MFL

By Our Staff Reporter

HYDERABAD, JAN. 6. The Chennai-based Murgappa group which is looking at opportunities to consolidate its position as the manufacturer of phosphatic fertilizers, has submitted a `letter of interest', to the Andhra Pradesh Government to acquire the latter's stake of 26 per cent in Godavari Fertilisers and Chemicals (GFCL).

Addressing a press conference here on Saturday, Mr. M. V. Subbiah, Chairman, Murugappa group, said they were awaiting a reply from the State government. Mr. Subbiah said they were also `open' to the Madras Fertilisers proposal for disinvestment adding ``we are looking at opportunities to merge with other companies to become a large player, particularly on the East Coast''.

The group is a market leader in phosphatic fertilizers in Orissa and Andhra Pradesh with market shares of 34 per cent and 21 per cent respectively. ``Our production efficiencies are very high, and our endeavour would be to add value to acquired units", he said.

The diversified Murugappa group, which entered the information technology sector by acquiring Net Access, is also looking at further investments in IT, and is `open to acquiring more IT companies', he said.

Mr. Subbiah said IT was an extremely important component of their plans, and already Rs. 24 crores was spent on ERP implementation across the group companies in the last three to four years. The focus of their IT initiative would be on Internet technology, and how to use Internet to provide `productivity solutions'.Work had started on development of an agri-portal, and testing should commence by the year end. There were a number of agri-portals in the market, but the group's efforts would be to be somewhat different, he said.

The group is planning to tie-up with a multinational to enter the `non-life insurance'. The discussions with the French company Axa fell through in October, but they were looking for another partner. Once the regulations permit, the group plans to take up agency for life insurance, A new distribution company was already set up for the purpose, he said.

The group's turnover went up to Rs. 3,700 crores in 1999 from Rs. 1,318 crores in 1993, and PAT to Rs. 184 crores from Rs. 52 crores in the same period. In the first half this year, the group's growth was 7 per cent in sales and 6 per cent in PAT. But the group was hit in two sectors - tea and confectionery. Mr. Subbiah said a team of top executives has been put on the job for a `turnaround' and `restructuring' plan for the confectionery operations.

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Section  : Business
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