Rashtriya Chemicals and Fertliizers (RCF), one of the largest fertiliser companies in India, plans to unlock value from its real estate assets by venturing into related chemical businesses. It plans to set up a chemical park and a first-of-its-kind chemical commodity exchange on its premises.
The Rs 5,228-crore company, which has about 800 acres in the heart of Mumbai at the Sion-Chembur region and about 700 acres at its Taal facility, will soon rope in a consultant to advise the company on optimising the value of its real estate assets through chemical ventures.
| TESTING CHEMICAL WATERS |
Various stakeholders in the chemical sector, including private players, may be invited to set up shops in the park and also trade in the commodity exchange, sources said.
To test the chemical waters, RCF may soon sign a joint venture with a leading Germany based manufacturer of hydrogen. Estimated to cost over Rs 600 crore, RCF’s role in the joint venture will be to provide land and hydrocarbon, the raw material for making hydrogen. While land is at its disposal, RCF hopes to source natural gas from Reliance Industries’ Krishna Godavari (KG) basin within three months. The MoU will be signed in a month’s time, sources said.
“We cannot comment on the joint venture now as it is in the discussion stage. We are evaluating various options such as the chemical park to create value for our real estate assets. But, as said earlier, we will not sell or rent our premises for real estate or related commercial ventures,” U S Jha, chairman and managing director, RCF told Business Standard.
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Sources said that on its Mumbai propertymore than 100-150 acres could be utilised for commercial purposes, including captive expansion plans. RCF cannot utilise the property for non-related businesses, as per the land acquisition norms.
Sources said the chemical park and commmodity exchange could entail an investment of about Rs 2,000-2,500 crore. Projections will get an annualised 20 per cent return on investments made by RCF and the partners in the venture.
It may be noted that RCF’s land in Mumbai has been a prime target for real estate players for many years. In the last few years, media had speculated RCF might sell off part of its real estate assets.