CFL, Chile firm float 50:50 JV for fertiliser

In a first of its kind in India, Coromandel Fertilisers Limited, the over Rs 9,300-crore fertiliser major and part of the Murugappa group, has entered into a 50:50 joint venture agreement with SQM of Chile to manufacture water soluble fertilisers at Kakinada in Andhra Pradesh. Water soluble fertiliser is nothing but potassium nitrite which is 100% soluble water and is used for horticulture, floriculture, plantations among other things.

When contacted, P Nagarajan, chief financial officer, CFL, told FE, “We are setting up a plant at Kakinada in Andhra Pradesh to manufacture 15,000 tonne a year initially. Being a premium product and a non-subsidised fertiliser, we have decided to go slow initially. Based on the response we have plans to scale it up trebly over the next three years.”

Currently, India imports nearly 50,000 tonne from countries such as Chile, China and Israel and fertiliser majors such as RCF, Zuari, CFL among others are involved in importing the same, he said. As water is a scarce commodity in India, particularly in those cultivation areas, this fertiliser is found to be more suitable for drip irrigation like plantations and can be utilised fully without any wastage, he added.

Explaining in detail, a senior official of the company, who is involved in this project, said, “It is a high value product and almost costs 10 times that of a normal fertiliser on kilograme basis.”

Water soluble fertiliser is nothing but potassium nitrite and 100% water soluble. A person can use only 4 or 5 kg of this fertiliser per acre as against 150 kg to 200 kg of normal fertilisers (DAP, urea, etc). “We have been importing this product over the years from SQM and selling in India in small way and now we have decided to set up a JV for the same in India to offer the farmers at competitive prices,” he said. Currently, farmers in AP, UP, Maharashtra, Karnataka are using this product, he added.

The company, which generates Rs 120 crore revenue through imports annually, is targeting Rs 400 crore per annum in the next two to three years with the local JV, he said.

Meanwhile, the company has reported a sharp jump in net income to Rs 9,375 crore for the fiscal ended March 31, 2009 as against Rs 3,757 crore. The net profit during the period under review was Rs 496.38 crore as against Rs 209.76 crore.

Source: The Financial Express 28/04/09

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