Fertiliser giant Indian Farmers Fertiliser Cooperative Ltd (Iffco) plans to pump in about Rs 2,000 crore for its expansion programme spread over a period of three years.
Iffco managing director U S Awasthi told Business Standard that the expansion plan includes the setting up of a grassroot urea plant in Andhra Pradesh, a joint venture ammonia plant in Iran, and capacity enhancement of its Senegal-based venture and the Kandla project.
He said Iffco would invest Rs 1,568 crore to set up a fertiliser project with a capacity of 7.26 lakh tonnes of urea in Nellor in Andhra Pradesh. Naphtha will be used as feedstock for the plant.
The project is expected to get all government clearances by June this year.
Another grassroot ammonia-urea plant will be set up after the Nellore plant goes on stream. The new plant will be located in eastern India.
Iffco and Industrie Chimiques Du Senegal (ICS) who have jointly set up a phosophoric acid plant in Senegal have decided to expand its existing capacity from 3.3 lakh to 3.5 lakh.
The total cost of the expansion is expected to be around $250 million, though both the partners are yet to decide on their share of cost. Our main chance of success is in Senegal and we will give it top priority, Awasthi said.
For the $463 venture in Iran, Iffco will invest around Rs 150 crore. The joint venture was marred by controversy with Iffco's partner, Krishik Bharati Cooperative Ltd (Kribhco), differing over the priority to be accorded to the project.
Both the Indian partners had signed a memorandum of understanding with Qeshm Free Area Authority (QFAA) in March 1994 to set up a joint venture nitrogenous fertiliser complex in Iran.
However, the controversy has been resolved with both the Indian partners agreeing on the pricing of natural gas (feed stock) for the project.
The project envisages the setting up of a 1,500 million tonne ammonia and 2,200 million tonne urea plants. Under the buy-back arrangement, the Indian companies have agreed to lift 60 per cent of the urea produced.
As per the agreement reached among the three promoters, the base natural gas price has been fixed at $0.75/MMBTU (million metric British thermal unit).
The gas price and cost of other inputs would be frozen for a period of five years from the date of commissioning of the project.
Iffco officials, however, said that Qeshm Free Area Authority's indicative price of $0.10/MMBTU for transportation with escalation formula from January 1996 linked with product price (ammonia and urea) and fuel prices is yet to be discussed.
For the Kandla project, Iffco plans to spend about Rs 200 crore to increase the capacity of the phosphorus pentoxide plant from 3.09 lakh tonnes to 5.2 lakh tonnes.
