The Hindu : Business : IFFCO plans $1b expansion

Online edition of India's National Newspaper
Tuesday, May 31, 2005

Business

Business

IFFCO plans $1b expansion

Special Correspondent

To set up phosphoric plants in Egypt and Gujarat

NEW DELHI: Indian Farmers Fertiliser Cooperative Ltd. (IFFCO), one of world's largest fertilizer cooperatives, on Monday announced $1 billion expansion plan envisaging setting-up of three greenfield plants, foray into rock phosphate mining in Egypt and carbon trading with Japan's Mitsui. The proposed investment would be funded by way of debt and equity in a ratio of 2:1.

"We are talking to several international and domestic banks such as Standard Chartered, BNP Paribas, ANZ Grindlays, IDBI Bank and SBI for debt component," IFFCO Managing Director, U. S. Awasthi, informed media persons.

While the investments would ensure backward integration for assured supply of phosphoric acid, these would also help the cooperative to enhance fertilizer production to 86 lakh tonnes annually from 61 lakh tonnes. The organisation has set a target of 100 lakh tonnes per annum in the medium term.

The programme includes setting up of a phosphoric acid plant in Egypt with an installed capacity of five lakh tonnes annually in a 75:25 joint venture with El Nasr Mining Co.

Unfolding the details, the IFFCO Chairman, Surinder Kumar Jhakhar, said the cooperative was also negotiating with a government entity in Egypt to undertake rock phosphate mining.

Another plant of five lakh tonnes capacity for phosphoric acid would be set up in Gujarat, for which negotiations were on with Kandla and Mundra while a DAP and NPK plant of 18 lakh tonnes annually would be established at Kandla.

Simultaneously, IFFCO had also finalised a ten-year agreement with Mitsui for carbon trading, he said adding that this was on account of its switching over to LNG from naphtha.

On the subsidy situation in the post-expansion period, he said there would be savings of about Rs. 1,000 crore for the government.

In 2004-05, IFFCO posted a marginal dip in net profit at Rs. 320 crore against Rs. 330 crore in the previous fiscal.

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