Deepak Fert Plans Ammonia Unit In Middle East

Deepak Fertilisers is planning to set up a ammonia plant in the Middle East. The company has narrowed down its location to three countries -Qatar, Oman and Iran.

Managing director Deepak C Mehta said, "Our overseas unit will be a separate company promoted by Deepak Fertilisers. The optimum capacity of any such ammonia plant is in the range of 1000-1500 tonne a day. We are yet to take a final call on the exact location as well as the capacity." He, however, declined to divulge details on the required investment for the proposed project.

"The project cost will depend on the country in which it will be located. We are currently working on the various modalities," he said. The company was initially planning to set up a similar project in Tanzania but has at present decided against it.

The idea behind setting up the project in the Middle East is the availability of cheap power and raw material. The power cost per unit in India is around Rs 4.36 compared with around Rs 2.5 per unit in these countries.

Meanwhile, on the domestic front, the company has submitted an expression of interest for acquiring a strategic stake in Hindustan Organics and Chemicals.

As a part of the expansion plans, the fertiliser major is also planning to set up a port-based ammonia storage capacities. The company is planning to set up a 10,000-15,000 tonne storage units at Jawaharlal Nehru Port.

...to up stake by 10%

The promoters of Deepak Fertilisers have decided to increase their equity holding in the company by 10 per cent through creeping acquisition. The Mehtas currently hold 26.62 per cent in the company.

The total fund outflow expected on account of the proposed acquisition of the 10 per cent equity would be around Rs 30 crore at Rs 22 a share. The company's board has already approved the proposal. The public holding in the company is 46.18 per cent. Corporate bodies and non-resident Indians hold 1.88 and 6.25 per cent, respectively.