Tata Chemicals to invest Rs 1300 crore for 25% acquisition in Gabon Fertiliser Plant

by khalid on 12/04/2011 · 0 comments

The Tata Group company, Tata Chemicals Limited is aquiring 25.10% stake in the Gabon fertiliser complex at South African country of Gabon Republic for $290 million (nearly Rs 1,300 crore). After Tata Chemicals’ investment, Olam International Limited shareholding in the fertiliser complex would stand at 62.90% while that of Republic of Gabon would be at 12%.

This ammonia-urea fertiliser complex of 1.3 million tonnes per annum (mtpa) capacity is being set up by Singapore based agri-food processing company Olam International Limited in collaboration with the Republic of Gabon.

The plant will have a capacity to manufacture 2,200 metric tonnes of ammonia and 3,850 metric tonnes of urea per day and is expected to be ready in the next three years. Besides, the complex also offers the scope to double the capacity of the plant.

In India around 50 metric tons of fertiliser required every year and almost 50% at 26.6 mt.of this is Urea. Out of this urea needed, up to 5.7 mt or 25% has to be import from outside India. So Tata Chemicals strategy is to out-source urea from this Gabon plant for the Indian market.

Indian fertiliser companies are finding it very difficult to increase their capacity of greenfield urea production in the country due to issues such as gas availability and land acquisition. Tata Chemicals too has found it difficult to expand urea capacity here because of similar reasons and that is why it is tapping inorganic growth overseas.

This Gabon Fertiliser Plant is strategically located near Gabon’s main seaport and so it would enables efficient and cost-effective material handling and proximity to target markets like Africa, North America, Latin America and India.

Tata Chemicals is in takeover spree for last some time and in past it acquired the General Chemicals Industrial Products Inc in early 2008, which has been rebranded Tata Chemicals North America Inc in a recent exercise. General Chemicals (Soda Ash) Partners (now Tata Chemicals (Soda Ash) Partners), Brunner Mond (UK) Limited, acquired by Tata Chemicals in the UK in 2005 and now Tata Chemicals Europe Limited, Brunner Mond SA (Pty) Limited (now Tata Chemicals South Africa Pty Limited), and Kenya-based Magadi Soda Company Limited (now Tata Chemicals Magadi Limited) are some of the other acquisitions.

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