Coromandel International to expand its rural retail operations

Coromandel International Ltd. | Fertilizers | Chemicals & Fertilizers | BSE: 506395 | NSE: COROMANDEL

29 Jun 2011 Evaluate

Coromandel International, flagship of the Chennai-based Murugappa Group, is planning to expand its rural retail operations by opening 200 stores in Andhra Pradesh and Karnataka in fiscal 2012. The company plans to set up 125 centres in Andhra Pradesh and 75 centres in Karnataka.

In Andhra Pradesh, the company operates rural retail stores under the name 'Mana Gromor Centers' and it currently runs 423 such stores there. The company has also extended the initiative to Karnataka by setting up 20 centres under the name 'Namma Gromor Centers'. These centres sell agri inputs such as fertilisers, pesticides, specialty nutrients, seeds, organic fertilisers and even insurance products.

According to the company's 2011 annual report, it increased its turnover from the sale of traded products through retail centres by 24%. The emphasis for rural retail stores is to leverage the relationship with the rural customers for expanding business and to enter into new and diversified areas.

The company achieved break-even at EBITDA level in 2011 for the 423 stores in Andhra Pradesh. Coromandel accounts for 45% of Murugappa group's turnover and 51% of its EBITDA.

Coromandel International (CIL) is engaged in manufacturing of fertilizers, specialty nutrients, crop protection and retail, while Sabero is a producer and supplier of fungicides, herbicides and insecticides. CIL, a part of the $3.8 billion-Murugappa Group, had last month announced that it is going to acquire 42.2% stake in SOGL, a Mumbai-based agrochemicals manufacturer, for Rs 250 crore in an all cash deal.