Tata Chem to buy 33% in Morocco firm

Tata Chemicals has decided to acquire a 33 per cent stake in Indo Maroc Phosphore, a joint venture between Office Cherifien Des Phosphates (OCP) and Chambal Fertilisers & Chemicals (CFCL), for Rs 166 crore.

OCP and CFCL will dilute their stake in equal proportion to make room for Tata Chemicals in the $144 million (approximately Rs 620 crore) Morocco-based joint venture.

Indo Maroc produced 373,895 tonne of phosphoric acid in 2004.

The Rs 2,500-crore Tata Chemicals will nominate its representatives on the board of Indo Maroc as non-executive directors after the agreements are signed in the next few weeks.

Tata Chemicals executive director Homi Khusrokhan said the decision to expand business in Marocco is in line with the group's policy to globalise operations in order to reduce dependence on the domestic market.

"The proposed acquisition, subject to necessary approvals, will also ensure supply of phosphoric acid, a crucial raw material for di-amino phosphate (DAP). Prices of DAP have been moving erratically over the past couple of years," he said.

Tata Chemicals' phosphatic fertiliser complex at Haldia is the only DAP manufacturing unit in West Bengal. Khusrokhan said both Tata Chemicals and Chambal Fertilisers will import phosphoric acid from Indo Maroc Phosphore.

India imports 50 per cent of the world's production of phosphoric acid. Morocco is not only the largest exporter of phosphatic rock in the world but also of phosphoric acid. It accounts for over 40 per cent of the world's trade in acid.

Indo Maroc Phosphore was promoted in 1997 as a joint venture between OCP, a Morocco state-owned company, and Chambal Fertilisers and Chemicals Ltd.