Coromandel Fertilisers acquires 2.5% in SA Foskor Ltd.; to advise on operations
By Our Corporate Bureau | 17 Feb 2005
Chennai: Coromandel Fertilisers Limited, has acquired 2.5 per cent stake for Rs27 crore in Foskor Limited, a South African fertiliser company. The Indian company will also advice Foskor on operational activities to enable it to improve its financial performance.
Based on the achievement of certain financial parameters, Coromandel Fertilisers will be allotted additional equity stake subject to a maximum of 14.5 per cent. "The additional equity stake will be based on performance milestones," explains V Ravichandran, president and whole-time director, Coromandel Fertilisers.
A wholly-owned subsidiary of the South African development institution Industrial Development Corporation (IDC), Foskor one of the largest producers of phosphoric acid in the world and exports large quantities of phosphoric acid to India.
Foskor's facilities include high quality phosphate rock mines in Phalaborwa, bordering South Africa's Kruger National Park and a 7.5 lakh-ton per annaum phosphoric acid plant at Richards Bay, also in South Africa. The South African company also has additional facilities for producing sulphuric acid and granulated fertilisers.
According to Ravichandran, Coromandel Fertilisers buys around 2.5-lakh tpa of phosphoric acid from Foskor and the equity acquisition and consultancy assignment will deepen the relationship between the two.
Incidentally, Foskor holds 5 per cent stake in another Murugappa group company, Godavari Fertilisers Limited.
"The capability of Coromandel Fertilisers to manage a diverse supply chain, and its expertise to increase productivity of quality products under environmental friendly operations will assist Foskor in improving its competitiveness to global best practice," says A Vellayan, chairman and director, marketing, Coromandel Fertilisers. According to him, the equity purchase and the consultancy assignment is a culmination of a process by IDC to inject strategic technical skills and access to better technology.
However officials declined to comment whether the 2.5 per cent purchase and the chance to increase it to 16.5 per cent would induce the company to acquire a controlling stake in Foskor.
