Coromandel International, part of Murugappa group and one of the largest private phosphatic fertilser manufacturers in the country, is set to acquire 45% equity stake in Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company based in Senegal, Africa, at an outlay of $19.6 million (Rs 150 crore), besides a loan infusion of a further $9.7 million (Rs 75 crore) into BMCC. The acquisition is through its wholly-owned subsidiary, Parry Chemicals, and the transaction is expected to be completed in the second quarter of FY23.
Arun Alagappan, executive vice-chairman, Coromandel International, said, “Given the high dependence on rock phosphate imports, which is a key raw material for manufacturing phosphoric acid, the proposed investment will be a step towards achieving long-term sustainability and supply security goals for meeting country’s fertiliser needs. The investment in Senegal is in line with the company’s long-term strategic objective of strengthening its sourcing capabilities to deliver superior value to all its stakeholders.”
Coromandel has strategic tie-up with leading integrated players like Tifert (Tunisia) and Foskor (South Africa) for meeting its phosphoric acid requirements. Further, it has been augmenting its captive phosphoric acid production at Vizag plant and is sourcing rock from various countries. As part of its strategy to strengthen the value chain, Coromandel has been evaluating opportunities in the phosphate mining to secure its rock phosphate needs.
A company statement said this investment will help in strengthening Coromandel’s backward integration and will ensure long term supply security of the key raw material. At full capacity, BMCC can meet up to one-third of the company’s rock phosphate requirement. The company clocked a turnover of Rs 19,255 crore during FY21-22.