Tata Chemicals buys fertiliser unit for $290 mn

R Mukundan,managing director,TCL said,“TCL has a significant presence in Kenya,South Africa and Morocco and this project (fertiliser complex n Gabon) is also in line with our focus to partner in the growth and development of Africa.”

He added that the investment brings to the company the strategic advantage of sufficient gas tied up at a competitive fixed price for both the streams.” The feedstock is assured in terms of quality and quantity under a 25 year competitive fixed-price natural gas contract with RoG. This plant is envisaged to be one of the lowest cost urea manufacturing facilities globally. Strategically located near Gabon’s main seaport,it also enables efficient and cost effective material handling and proximity to target markets i.e. Africa,North America,Latin America and India. “Up to 25 per cent of the production would be reserved for sales in India through the existing TCL network,subject to de-canalisation in India,” said Mukundan.

Shares of TCL were down 0.17 per cent to close the day at Rs 354.50 on the Bombay Stock Exchange (BSE) on Monday. The announcement of the deal was made after market hours.

Meanwhile,this venture is a successful culmination of the accord entered between Olam and RoG to set up a 1.3 million TPA (tonnes per annum) urea plant based on gas supply at competitive fixed price for 25 years,wherein the partners having equity in the ratio of 80:20 had the option of bringing in a strategic investor who could have a 25.1 per cent share in the company through sell down by Olam and RoG.

Olam,RoG and TCL would also set up a Sales and Marketing JV for selling entire output of the project in which TCL and OLAM would hold equal stake. Up to 25 per cent of the output would be reserved for Indian markets for sales through the TCL network,subject to de-canalisation in India.

While Olam is a leading global integrated supply chain manager and processor of agricultural products,RoG is situated is West Central Africa sharing borders with Equatorial Guinea to the northwest,Cameroon to the north,and with the Republic of Congo to the East and South.

It has a land area of 270,000 square kilometers and has an estimated population of around 1.6 million people. Gabon has an equatorial climate with the equator bisecting the country.