Coromandel Fert plans Tunisian JV

Coromandel Fertilisers, the south-based Murugappa group's flagship fertiliser company, is exploring the possibility of entering into a joint venture with Groupe Chimique Tunisien(GCT) to produce phosphoric phosphoric acid in Tunisia as part of its backward integration plan.

GCT already holds a 5 per cent stake in Godavari Fertilisers and Chemicals, an associate company of Coromandel Fertilisers.

A Vellayan, director-marketing of Murugappa group and whole time director of Coromandel Fertilisers said, "As part of our expansion plans, we are evaluating several options like overseas acquisitions and/or joining hands with a foreign partner or transnational players for setting up fertiliser units abroad. Towards this, we are weighing the option of entering into a joint venture with GCT for setting up phosphoric acid unit considering the ready availability of rock phosphate in Tunisia."

Vellayan also claimed that the company has done a due-diligence of the South Africa-based Foskor Ltd.

Coromandel Fertilisers as well as Godavari Fertilisers are major producers of phosphatic fertilisers in India. The proposed foray into phosphoric acid will enable the group to reduce the cost for procuring the raw material for its fertiliser units.

Globally, prices of phosphatic acid firmed up in 2003 on increasing global demand and virtually no capacity additions.

The group has shown interest to be a strategic partner in Foskor Ltd. The South African government-owned Industrial Development Corporation, which holds 100 per cent stake in Foskor, has put 26 per cent in Foskor Ltd on the block.

Besides Murugappa group, it is learnt that Tata Chemicals and Indian Farmers' Fertiliser Co-operative (IFFCO) have also shown interest in Foskor. Incidentally, Foskor also holds a 5 per cent stake in Godavari Fertilisers and Chemicals.

Coromandel Fertilisers holds over 45 per cent in Godavari Fertilisers, while IFFCO holds over 24 per cent. Coromandel had acquired Godavari Fertilsers as part of the Andhra Pradesh government's disinvestment programme, when the state government put its 25.88 per cent stake on the block.

EID Parry and its subsidiaries hold over 69 per cent in Coromandel Fertilisers. The group had demerged the Farm Inputs Division of EID Parry, merging it with Coromandel Fertilisers.