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BW Businessworld

Gujarat Fluorochemicals: A Clean Strategy

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The company is probably better known for its multiplex cinemas, INOX. Entertainment is a large part of Gujarat Fluorochemicals' (GFL's) business. The other elements are refrigerants, industrial gases, chemicals, cryogenic engineering and renewable energy. GFL was among the first companies to stop manufacturing chlorofluorocarbons or CFCs, one of the biggest contributors to greenhouse gases. It extended that strategy to create a new business, carbon trading, a significant revenue generater.











Vivek Jain, Managing director, Gujarat Fluorochemicals
(BW Pic By Ritesh Sharma)

GFL thermally oxidises a waste gas produced at one of its refrigerant gas plants and earns ‘carbon credits', which are then sold to firms in the US, the UK, Japan and other countries that allow the use of these credits to meet environ-mental compliance on carbon production. Thus far, it has sold over 13 million credits, since it became one of the first projects under the UN's Clean Development Mechanism (CDM) under the Kyoto Protocol. The company has taken what most consider corporate social responsibility and changed it into a business line.


 


GFL has steady revenue streams that have consistently grown over the past decade. Before people dismiss it as the tortoise in a field of hares, just look at its 10-year returns: nearly 82 times its 31 March 2003 price, compared to the 5.3 times that the benchmark BSE 500 has returned in that time. Let's see if anyone else can make a carbon copy of that.


 


(This story was published in Businessworld Issue Dated 28-05-2012)