The agricultural infrastructure sector in the country has entered a new phase with companies outsourcing critical functions to specialised companies. The latest example of this type was the deal done between Sanjana Cryogenic Storages (SCS), which would manage two ammonia import infrastructure facilities, one on the east coast for Hind Lever Chemicals (HLC) and the other on the west coast for Indo Gulf Corporation (IGC).
SCS, which pioneered setting up of ammonia storage facilities on build operate own transfer (BOOT) and build operate own (BOO) basis, has emerged as the only company in India providing tankage for ammonia storage.
India has been an ammonia deficient market for many years now. User industries had to import ammonia and store it at -330 C at atmospheric pressure before despatch to consuming units. So long, Indian companies have set up and operated ammonia storage facilities on their own.
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HLC has entered into 25-year BOO contract with SCS for a terminal to be set up by September 2003. HLC will make monthly payments through escrow. The deal was expected to increase efficiencies and reduce costs for fertiliser and other agri-based businesses.
Sanjay Goenka, managing director of SCS, said the company expected to grow through focus on technological excellence, safety and customer satisfaction in conjunction with partners such as Indo Gulf, Hind Lever Chemicals and Rabo. It would continue to offer best global practices in agri-infrastructure.
Rana Kapoor, CEO & managing director of Rabo India, said the Rabo-managed deal done for SCS based on long-term contracts was expected to provide impetus for greater development in the agri-infrastructure sector. Agri-infrastructure solutions by SCS would help streamline agribusiness supply chain, lowering operating and handling costs, he added.
Rabo India did financial advisory and lending cum syndication service for the project, which involved arranging Rs 62 crore debt component. Several domestic banks participated in the syndication.