RCF may tie up with foreign firms
By Nisha Das | 05 Oct 2001
Mumbai: Rashtriya Chemicals and Fertilisers (RCF), the public sector chemical and fertilisers major, is in talks with the US-based Bechtel Corporation and a Canadian trading firm to acquire muriate of potash and rock phosphate mines in Thailand and Jordan.
Says a senior RCF official: The discussions are in an advanced stage, and in two to three months a vivid picture about the tie-up would emerge.
Once the talks materialise, RCF, Bechtel and the Canadian firm would float a separate company to acquire these chemical mines in Taiwan and Jordan. RCF would control around 25 per cent stake in the new company, while Bechtel and the Canadian trading firms will hold the remaining stake. Presently, the governments of Taiwan and Jordan control these mines.
Currently, RCF is importing these fertilisers, which are used by the Indian agriculture sector in a big way. The imported prices of MOP and rock phosphate are estimated at $125 to $150 per tonne.
The acquisition price of the Taiwan mines is estimated at Rs 700 crore. The stakeholders will invest Rs 500 crore as equity, while the remaining Rs 200 crore will be generated as debt. Rs 100 crore to Rs 125 crore will be RCF''s contribution to acquire these chemical mines, says the RCF official.
In the meantime, he says, RCF is reviewing the joint venture proposal with the Belgium-based UCB to manufacture and market methylamines, a fast-moving fertiliser in the Asian region.
Considering, the current business environment and the upcoming deregulation regime in the fertiliser industry, the company has decided to review its plan to set up a new company for the methylamine production. Most probably, we will convert the joint venture into a marketing joint venture, the official says.
RCF has plans to invest around Rs 30 crore in this joint venture firm. UCB has more than 20 methylamine manufacturing units and RCF is planning to procure this fertiliser from UCB and they would be marketed in India, he says.
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