Coromandel International, country?s second largest non-urea fertiliser maker, is planning to have a urea plant in West Asia. ?The management will take a final call on the new venture in the next eight months,? Coromandel Fertilisers chairman A Vellayan told FE.
?We are in the process of identifying a suitable place in the Gulf region where we can either set up a plant or acquire a smaller gas-based plant. We will take a final decision in the next six to eight months time,? said Vellayan,who is also the chairman of the Rs 13,500 crore Murugappa group.
?It may cost around Rs 4,000 crore to set up a one million-tonne urea plant in India against Rs 700 crore for a phosphoric plant with similar capacity. We are not sure about the continued availability of gas. The consumption has been growing on average at 4% year-on-year. Unless government come forward with feedstock-based subsidies, it will be difficult for the industry to have huge capacity addition in the urea area?, he added.
Vellayan said the company has been nominated by the Union government to import urea and sell it domestically as per the government?s norms to bridge the widening demand-supply gap while sharing the distribution burden. ?We will soon start importing urea as per the government norms through Karaikkal port in Puducherry and hope to import around 3,00,000 tonnes initially.? Coromandel, with a strong presence in DAP, complex fertilisers and other nutrient based farm inputs,
would make use of this opportunity to make an entry into the urea segment.
?With the ever increasing demand, coupled with the government?s permission to import and sell urea domestically. it is prudent for us to have a plant of our own (in the middle east region,? he said. As per the projections, India may end up importing around 8 million tonnes of urea to meet the total requirement of 28 million tonne in the current year as the demand always is on the upper side due to lack of aggressive capacity addition by urea makers in the recent past, he added.
According to him, Coromandel is also involved in expanding its phosphoric plant capacity at Kakidana from 2.9 million tonne to 4 million tonne with an investment of Rs 350 crore.
