Has kicked off a Rs 4,400-crore expansion of Thal plant in Maharashtra.
State-run Rashtriya Chemicals and Fertilisers (RCF) has proposed to invest $1.5 billion (about Rs 7,000 crore) to set up a gas-based fertiliser plant with a capacity of 1 million tonnes in natural gas-rich Ghana.
For this, RCF will enter in a 51:49 joint venture with the Ghana government. A three-member team of the company will visit that country from July 4-6 when they will hold discussions with the authorities concerned and sign a memorandum of understanding for this purpose.
Natural gas is available in Ghana at a cheaper rate of $2.5 per million metric standard cubic feet per day.
The state-run fertiliser major has also lined up an investment of Rs 4,400 crore to expand its Thal plant in the Raigad district of Maharashtra.
So far, the company has received bids from Saipem, Italy; a consortium of Samsung and Uhde; a consortium of Technimont, Italy and Technimont ICB, India; and a consortium of Technip of France and Larsen & Toubro to provide ammonia and urea technologies.
“Considering the growing demand of nitrogenous fertilisers, the company has proposed expansion at Thal. The project comprises setting up a 1x2,200 metric tonnes per day (MTPD) ammonia plant and 1x3,500 MTPD urea plant along with power generation, offsite utilities and product handling facilities. A draft report of technological and economic feasibility has been prepared,” RCF Chairman and Managing Director U S Jha told Business Standard.
He informed that the company would process the bids received from these companies for supplying ammonia and urea technologies. Once this is done, a detailed project report would be conducted.
Gautam Sen, director (finance), said the company would certainly consider an initial public offering (IPO) by exploring a special purpose vehicle (SPV) or through subsidiaries. The part of IPO proceeds, about Rs 1,100 crore, would be used to finance the Thal expansion. “RCF is confident to mobilise necessary resources as the company has a net worth of Rs 2,500 crore,” he added.
As far as the gas-based fertiliser project in Ghana is concerned, the RCF official said that a joint study would be undertaken to assess technical, economic, social, environmental and financial feasibility of establishment of the plant.
The company, which owns close to 800 acres of land in the Sion-Chembur region in Mumbai, also plans to re-develop its residential areas with high-rise towers, with the support of real estate developers and the state government.
The public sector fertiliser major occupies about 277 acres of land for its residential colonies which include officers’ bungalows and staff quarters.
The area required for these high-rise towers will be limited and plans are to unlock the real estate value of rest of the land with commercial real estate development. However, this will require prior sanction from the state government as the public sector company is not allowed to use the land for non-related core business, according to the land acquisition norms laid down at the time of commissioning of RCF.
RCF had appointed a consultant to design a blue-print to re-develop part of the area with 2-3 modern high-rise residential towers.
The company would require Rs 300-350 crore to develop the real estate on its own, and is planning to rope in other public sector players to participate in the venture.
Earlier, the company was planning to unlock value from its real estate assets by venturing into related chemical businesses by setting up a chemical park and a chemical commodity exchange in its premises, but has shelved these projects due to possiblity of pollution in the area, he said.
RCF’s land in Mumbai has been a prime target for the private sector real estate sector for many years. In the last few years, media had been speculating that RCF might sell off part of its real estate assets. Similarly, the petroleum major Hindustan Petroleum Corporation Ltd (HPCL) also own 340 acres in Chembur, and the company is planning to shift the refinery to Raigad in Maharashtra, in the coming years.
