Fertiliser co-operative Kribhco today announced a joint venture with Moroccan firm OCP to set up a new plant for manufacturing phosphatic fertilisers in Andhra Pradesh with an investment of Rs 1,500 crore.
Kribhco and OCP have also agreed in-principle to jointly set up a phosphoric unit in Morocco that could entail an investment of about Rs 3,000 crore.
OCP is the largest phosphate producer in the world and a leading global fertiliser player.
“We are entering into a 50:50 joint venture with OCP to set up a NPK fertiliser plant at Krishnapatnam in Andhra Pradesh with an annual capacity of 1.2 million tonnes,” Kribhco Chairman Chandra Pal Singh told reporters here.
Minister of State for Chemicals and Fertilisers Mansukhbhai Mandaviya said the JV will strengthen relationship between the two countries and also benefit Indian farmers.
Asked about the investment, the company’s MD N Sambasiva Rao said it would be about Rs 1,500 crore.
“Kribhco and OCP will put in Rs 225 crore each as equity to set up this plant. The remaining Rs 1,050 crore will be arranged through bank loans,” he added.
Rao said this would be the company’s first non-urea plant in the country. It has two plants with an annual capacity of 3.2 million tonnes of urea. That apart, the company gets 1 million tonnes of urea from its joint venture project in Oman.
“We have acquired 288 acres of land for this project. The work on this plant will start from April 2017 and commercial production will commence from April 2019,” Rao said.
Kribhco would source phosphoric acid from OCP for its new plant in Andhra Pradesh while ammonia would be imported from the Middle East.
The project site has connectivity from railway line, national highway and sea route through adjacent port, making it easier to import raw material and transport finished product from plant to different geographies.
On proposed investment in Morocco, Rao said: “We have in-principal agreed for a phosphoric acid unit in Morocco. The total cost is estimated at about Rs 3,000 crore”.
Of the total investment, he said Rs 1,200 crore could be equity component to be shared equally between the Kribhco and OCP. “We are in discussion with OCP. We hope to finalise our investment in Morocco soon”.
Rao said the country currently import 1 million tonnes of NPK fertilisers out of the total domestic demand of 9 million tonnes. “We are setting up this plant to fill this gap”.
OCP’s Chairman and CEO Mostafa Terrab said: “As one of the major co-operatives in India, Kribhco is an excellent partner to develop a farmer-oriented agricultural input joint venture”.
The minister said, meanwhile, the country’s urea import will reduce following 100 per cent neem-coating of this key nutrient.