Iffcos phosphoric acid plant in Egypt

New Delhi, Nov 22 | Updated: Nov 23 2005, 07:16am hrs
Indian Farmers' Fertiliser Cooperative (Iffco) on Tuesday announced the launch of Indo-Egyptian Fertiliser Company (IEFC), a joint venture with Egypt's El Nasar Mining Company for setting up a phosphoric acid plant in Egypt.

Iffco will have 76% in the $325-million equity, El Nasar will hold the balance 24% stake in the joint venture company. The project will be financed with a debt equity ratio of 70:30 and is expected to go on stream in early 2009. Phosphoric acid is the basic raw material for manufacture of Di-ammonia phosphate (DAP).

With this, the cooperative major will have assured supply of about 1 million tonne bulk phosphoric acid for its Kandla plant leading to an additional DAP capacity of the Iffco 20 lakh tonne and it will not depend on imports for production of DAP.

Iffco's combined share in the domestic DAP market with the acquisition of Oswal's Paradeep plant with a capacity of 1.92 million tonne will now jump up to 3.22 million tonne, which would be around 30% of the Indian market. India has a total production capacity of 7.29 million tonne.

"Egypt's largest rock phosphate mining company will supply rock phosphate, the basic raw material for the project while Iffco will buy back the entire phosphoric acid to feed its DAP plant at Kandla in Gujarat," the managing director of the company US Awasthi said. Surinder Kumar Jakhar will be the chairman of the new company.

Plant Chant
Iffco will have 76% in the equity
EI Nasar will hold the balance 24% stake
Project will be financed with a debt equity ratio of 70:30
Plant is expected to go on stream in early 2009
With this, Iffco will have assured supply of about 1 MT bulk phosphoric acid for its Kandla plant
Mr Awasthi said the necessary land for construction of the plant at Edfu near the rock phosphate mines has been allotted by Aswan Governorate and the project has been accorded free zone status by the General Authority for investment and Free Zones in Egypt.

"Iffco will put in $100 million in the project and the discussions with international financial institutions for syndication of about $220 million loan are in progress," an Iffco official said.