When M R Sharma joined Krishak Bharati Cooperative Limited (KRIBHCO), a major Indian manufacturer of fertilisers, back in 1982, the area in Surat where its production site now stands was just a small rural road. “There wasn’t a single brick here,” he recalls. “The land surveying and levelling was still being done, and I was a part of that. That road is now a national highway.”
Today, the cooperative produces hundreds of thousands of tonnes of urea fertiliser per year at the plant, and sells a range of other products including seeds, phosphate and potash fertilisers, and compost.
In the almost four decades since he joined, M R, who is now KRIBHCO’s Operations Director, has seen every aspect of an industry that is vital to India’s tens of millions of farmers, amassing experience in operations, project management, maintenance, commercial, human resources and finance. “I have insight into all the disciplines,” he reveals.
In addition to helping to expand the cooperative’s production capacity of urea fertiliser, the dedicated team has helped to significantly reduce its energy consumption, from 5.63 gigacalories per tonne of urea to 5.4 gigacalories. “This is a fantastic achievement,” he enthuses.
So many other industries were closed – they were all asking, ‘What miracle have you performed?
“We have done a lot of modifications to the plant to get here, like recently incorporating motor-driven CO 2 compressors, which has reduced our energy consumption.”
Cost cutters
KRIBHCO was set up by the Indian government’s Cooperative Societies and is run democratically for its members, with its main mission being to represent farmers and maximise their returns with specialised agricultural products.
The organisation focuses on spurring rural development and seeks to finance and manage projects that are not just commercially viable but also socially desirable. As it has prioritised these goals for so long, and in the absence of the need to drive returns for shareholders, KRIBHCO is not as profitable as it could be, despite generating more than US$1 billion in turnover each year.
“The margins are very, very thin,” M R confirms. “We are not making money. You can say we are in service to the nation.” However, M R is now planning to have the best of both worlds. KRIBHCO has begun diversifying into other sectors such as ethanol, nitric acid, cement, coal and solar power generation.
The cooperative also owns a jetty that it uses to ship its fertilisers, and it will soon start handling third-party cargo there as part of this expansion drive. The benefit of working with such thin margins for so long is that the organisation is extremely lean with a low cost base, meaning it is well-positioned to see healthy returns on the investments it is now making.
“We are doing well because ours is a very efficient, very well-managed plant. Energy consumption is very low,” M R explains. “Our cost of production is one of the lowest in the country, which makes us really competitive. Now we just need to take care of the profits. That’s why we are keeping our eyes open to diversify into other fields.”
Cohesive team
M R is not the only person who has been with KRIBHCO for decades. Many among his original cohort still work there and are due to retire in the next few years. This portends a major change for an organisation that has relatively low staff turnover.
Our cost of production is one of the lowest in the country, which makes us really competitive.
“There will be a total transformation, and my focus will be on replacing them with the right new people,” he shares, although he recognises it will be a challenge to ensure the team stays as strong as it has been so far.
“I’ve been working in this organisation since the beginning. I know each and every person, and I have a good team of senior executives who work with me very cohesively and competently. Our Chairman, Managing Director and Board of Directors have reposed faith in me, given free hand to function and given direction from time to time That is one of the major reasons for my successes.”
When the COVID-19 pandemic hit last year, M R managed to keep the production facility running at 100 per cent capacity, even as numerous other factories in the region were forced to shutter as migrant workers made their way home. He says this would not have been possible without KRIBHCO’s dedicated workforce.
“Not a single worker left from KRIBHCO,” he shares. “We have 1,500 casual labourers working in packaging, bagging and handling. If that is stopped, we have to stop the plant, so my focus was to retain our employees. One month’s worth of wages were given in advance to all the labourers, as well as two months’ worth of rations and free food during that lockdown, and we extended our medical facilities.
“The labourers were very happy. I have a rapport with them and they have faith in me. They know that what M R Sharma says, he means. I told them, ‘You are safe here. You don’t need to leave.’ And so nobody left from KRIBHCO, even though every other industry nearby was affected.”
He recalls his former mentor at KRIBHCO, who was the head of another nearby business, being amazed to see the production site was still running. “What have you done?” he asked M R. “We have stopped all our operations.” He adds,
“So many other industries were closed – they were all asking, ‘What miracle have you performed?’ So I explained.” Another factor that has enabled KRIBHCO to thrive during this difficult period is M R’s close relationships with the cooperative’s partners. He believes that business relationships should be more like friendships and that problems are best solved when each partner can trust the other instinctively, without needing to agree to official terms before acting.
“I have very cordial relationships with the suppliers and the key people we deal with – not official relations, amiable relations. I enjoy that kind of rapport with the other fertiliser companies too,” M R says. “For me, human approach is the key to success.”
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