Iffco invests in foreign oil and gas firm
Feb 10 2010 , New Delhi
In an announcement on Wednesday, the company said it had joined hands with Americas Petrogas and its subsidiary, GrowMax, to set up potash and other fertiliser plants in Peru. One of the projects is for manufacture of di-ammonium phosphate (DAP) at a cost of $1 billion.
Iffco has bought 20 per cent of GrowMax which is setting up a muriate of potash (MOP) project at Bayovar in Peru. The project, to cost $125 million, will initially produce 250,000 tonnes a year. The capacity will be ramped up to one million tonnes within five years at a additional cost of $125 million each year. Iffco is the first Indian organization to make investments in potash assets abroad.
Americas Petrogas has struck oil and commenced production at Medanito Sur in Argentina’s Neuquen basin.
Iffco’s managing director, US Awasthi, and Americas Petrogas’ president & chief executive officer, Barclay Hambrook, made the announcements in the capital on Wednesday.
Awasthi told media that Iffco was negotiating a buyback of 50 per cent of the potash produced at the Peru plant. The cooperative will use the supplies to make complex fertilisers in India. Currently, about 3.5 million tonnes of potash is imported by Indian Potash Ltd, a public sector company, for conversion into complex fertilisers.
Hambrook said both Americas Petrogas and GrowMax were open to Iffco hiking its equity in future.
These investments by Iffco are part of its plan to invest $5 billion in foreign projects.
Last October Iffco set up a 52:48 joint venture with the state-owned Jordan Phosphate Mines Company. Iffco will pump $625 million into a new phosphoric acid plant at Eshidiya in Jordan. The venture is called Jordan India Fertiliser Company.
The factory will produce 1,500 tonnes of the acid a day, all of which will be bought by Iffco to make phosphatic fertilisers, including DAP, in India.
The latest partnership is Iffco’s sixth with foreign companies. The first was with Oman Oil Company. The venture set up a $1 billion fertiliser plant in Oman. Iffco has also invested in Senegal and Australia to source inputs.
Iffco as a group has an annual turnover of $7.2 billion and produces 11.2 million tonnes of fertilisers. It has 12 other joint ventures in insurance, power, rural mobile telephony, agro-processing special economic zones and commodity trading.