Tata Chemicals in JV with Olam International to set up Ammonia-urea Fertiliser Manufacturing Complex

Tata Chemicals on 11 April 2011 entered into a joint venture with Singapore-based Olam International for setting up an ammonia-urea fertiliser manufacturing complex in the Republic of Gabon, Africa. Tata Chemicals will invest Rs 1,300 crore to set up the complex.

Tata Chemicals (TCL) will acquire 25.10 per cent stake in the stream-I of the port-based greenfield project. Olam International on the other hand will own 62.90 per cent and Republic of Gabon (RoG) will control the remaining stake. Tata Chemicals that has expertise in running fertiliser plants would provide the project management consultancy and operations and maintenance service on commissioning of the project.

The stream-I of the project consists of setting up a 1.3 million tonnes per annum (mtpa) of urea manufacturing facility with an option to raise it by another 1.3 mtpa in Stream II.
The three- TCL, Olam and RoG would also form sales and marketing joint ventures for selling the entire output of the project. TCL and Olam will hold 42.5 per cent stake each and RoG will own 15 per cent in the marketing joint venture.

The project would reserve up to 25 per cent of the output for sale in Indian markets through the Tata Chemicals network.

The fertiliser industry has urged the Centre to de-canalise urea imports as part of its efforts to eventually decontrol the sector. The international manufacturers have a cost advantage over domestic companies as most of their plants are gas-based.

Tata Chemicals' Babrala plant in Uttar Pradesh has an installed capacity of 864,600 tonnes of urea a year. The product from the UP plant constitutes nearly 12 per cent of the total urea produced in India by the private sector.

The Tata plant at Haldia in West Bengal produces crop nutrition such as di-ammonium phosphate (DAP) and NPK complexes, single super phosphate and various other chemicals. It has a capacity of over 1.2 mtpa.