Newsmaker: Abhey Oswal

Back to future for Oswal

In the 1980s, Abhey Oswal enjoyed the status of the next Ambani. For some time, he appeared to be living up to it. He made significant acquisitions""ICI's plant near Kolkata, Union Carbide's in Mumbai, Jagatjit Industries' sugar mill in Punjab "" and got into run-ins with the establishment (income tax raids have been reported at his offices and residences).

However, Oswal, having rechristened his Bindal Agro Chem Ltd as Oswal Chemicals & Fertilisers in 1995, later decided to focus on fertilisers and started getting out of other businesses such as sugar, vanaspati and rice.

Things were going well as the company set up the world's largest grassroot phosphoric acid plant (the Ambanis are credited with the world's largest grassroot refinery) in Paradip, Orissa.

Phosphoric acid is in short supply all over the world and crucial for the company's di-ammonium phosphate unit at the same location. The DAP unit started commercial production in April 2001 with an annual capacity of 1.77 million tonnes of DAP.

However, it never achieved its full capacity utilisation "due to technical and managerial reasons", averaging well under a million tonnes a year. That, according to director-finance Ranjan Sharma, upset all calculations for the plant, built at a capital cost of Rs 2,400 crore.

It did not help that DAP does not enjoy an assured return on the basis of government support, as urea does (12 per cent, post-tax). DAP plants have to be competitive on an import parity basis.

Finally, last Sunday, it was revealed that the plant was being sold to Indian Farmers' Fertiliser Cooperative for Rs 2,180 crore.

Now, Oswal will concentrate on his urea plant in Shahjahanpur, Uttar Pradesh, which was set up with a capital outlay of Rs 1,368 crore and can churn out 850,000 tonnes a year.

Starting production in 1995, it was one of seven plants (four private and three public cooperative) set up on the Hazira-Bijapur-Jagdishpur pipeline.

Still, there are grounds on which Oswal can hope to claim an Ambaniesque aura. His elder son, Pankaj, has set up what is said to be the world's largest ammonia plant in Perth, Australia. The second son, Shail, is into music and movies.

The daughter, Shaalu, is married to industrialist and Congress MP Naveen Jindal. And the deal with Iffco is the largest all-cash deal in India's corporate history, fetching about Rs 300 crore more than its book value.