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Zuari looking to set up acid plant abroad

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Ranju Sarkar New Delhi

Zuari Industries Ltd, the flagship of the Saroj Poddar group of companies, is looking to set up a phosphoric acid plant abroad as well as scouting for rock phosphate mines in North Africa and Australia.

‘‘We are looking at an acid plant globally and exploring back-to-back options for rock phosphate,’’ said Suresh Krishnan, MD, Zuari Industries that is setting up a Rs 750-crore, 1-million tonne diammonium phosphate (DAP) plant at Karwar in Karnataka.

Phosphoric acid is derived from rock phosphate, which is not available much in India. Phosphoric acid is used with ammonia to produce diammonium phosphate (DAP), a complex fertiliser used as a nutrient across farms in India.

 

Zuari will need 0.4-0.5 million tonnes of phosphoric acid to produce 1 million tonnes of DAP. It will need 1.5-2 million tonnes of rock phosphate for which it wants to buy a mine or enter into a 10-20 year long-term contract with a supplier.

Paradeep Phosphates Ltd, a group company, has been importing rock phosphate, converting into phosphoric acid to make DAP. Zuari has been importing acid at its plant in Zuari Nagar in Goa ‘‘We understand the value chain,’’ said Krishnan.

North African countries like Morocco, Egypt and Tunisia have large deposits of rock phosphates, with Morocco having the largest deposit. The problem: No one is selling in Africa. In Morocco, the mines are controlled by the government, and it wants companies to come and add value (set up acid plants).

‘‘We are serious consumers of rock phosphate and looking at long-term tie-ups or purchase agreement, or acquisition of a mine,’’ said Krishnan. Zuari is looking for a mine with reserves of 200-300 million tonnes, and may have to shell out between $1-$4 per tonne, depending on the location and how much the mine is developed.

The DAP plant, and its backward integration is part of the group’s $2 billion (around Rs 10,000 crore) expansion in the next four years. It plans to spend Rs 5,000 crore to set up a 1.1 million tonnes urea plant in Belgaum, Rs 750 crore in a DAP plant and Rs 2,000 crore for an phosphoric acid plant with a possible mine acquisition. When implemented, the projects could double group’s turnover to $5 billion in five years.

The Saroj Poddar-led group of companies, which include Zuari Industries and Texmaco Ltd, had also unveiled a new group identity, Adventz, last month.

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First Published: Apr 04 2011 | 12:59 AM IST

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