Rashtriya Chemicals & Fertilizers to invest Rs 1,000 crore for Talcher fertiliser project

MUMBAI: Rashtriya Chemicals & Fertilizers will invest nearly Rs 1,000 crore towards equity participation in its joint ventures for urea and ammonium nitrate plants at Talcher in Orissa, a top company official said today.

"We are investing around Rs 1,000 crore towards equity participation in our two joint ventures for Talcher project," RCF Chairman and Managing director R G Rajan told PTI here.

RCF, along with Coal India, GAIL and Fertilizer Corporation of India is contemplating setting up Rs 6,000 crore fertilizer complex, comprising of 2,700 MTPD ammonia plant, 3,850 MTPD urea plant, 850 MTPD nitric acid plant and 1,000 MTPD ammonium nitrate plant at Talcher, Orissa, through coal gasification route as feed stock.

Rashtriya Chemicals & Fertilizers (RCF) will invest Rs 850 crore towards its equity participation in the proposed downstream project. GAIL will pick up 5 per cent stake and FCIL 11 per cent stake in the said project, Rajan said.

Coal will be made available by CIL from nearby coalfields of its subsidiary, Mahanadi Coal fields. Land and certain facilities needed for the project will be provided by FCIL. Apart from being a project for feedstock diversification, it will also aid much needed urea production capacity for the eastern part of the country, he said.

In the second coal gasification upstream project in JV with GAIL and Coal India ,estimated to cost Rs 3,000 crore, RCF will invest around Rs 150 crore, Rajan said, adding that the GAIL will be major shareholder, while RCF and Coal India will pick up 5 per cent stake each.

The Talcher project is proposed to be done on Lump Sum Turn-Key (LSTK) basis. Project capital cost is estimated to be approximately Rs 9,000 crore (including coal gasification). A MOU amongst the proposed promoters has been signed, Rajan said.
The company also plans to expand the capacity of urea by setting up one single stream ammonia plant of capacity 2200 MTPD and one single stream urea plant of capacity 3850 MTPD at the existing site at an approximate cost of Rs 4,200 crore.

The selection process for lumpsum turn-key contractors (LSTK) for main plants has been completed. Approval of PIB/CCEA is expected soon. Environmental clearance for undertaking the project has been obtained, Rajan said.

He also said the governments of Ghana and India have signed a Memorandum of Understanding for setting up a fertilizer project to produce about 1 million metric tons of urea fertilizer based on gas find in Ghana.

RCF has been nominated, by government to take a lead role. It has been proposed to set up an ammonia plant of 2200 MTPD capacity and a urea plant of 3850 MTPD capacity at a cost of Rs 6,000 crore. The pre-feasibility report submitted to the respective governments is under consideration. Discussions are being held to finalise pricing and quantity of gas to be supplied to the project, he said.

The company will benefit from the good monsoon this year, but it may see forex loss due to sharp rupee depreciation in the current quarter, Rajan said.

RCF has fertilizers and chemicals manufacturing plants at two locations Trombay and Thal in Maharashtra producing nitrogenous, phosphatic and potassic fertilisers and a wide range of industrial chemicals.

The government, through Department of Disinvestment, has disinvested 12.5 per cent equity shares of the company, to the public in March this year. The OFS was oversubscribed by 30 percent. Currently, the shareholding of Government is 80 per cent and the rest 20 per cent is shared amongst LIC/ mutual funds and UTI/ financial institutions, and public.