Nagarjuna Fert Eyes Oil, Gas Exploration

The Rs 922-crore Nagarjuna Fertilisers and Chemicals Ltd of the Rajus is amending the objects clause of its memorandum of association to enable it to get into oil and natural gas exploration, both onshore and offshore.

The company also intends to set up an export-oriented integrated hot-rolled coils steel plant under a separate company and is also scouting for foreign partners for the project.

It has also joined a consortium engaged in oil exploration off the coast of Nellore. This has been done as a long-term strategy of the company towards achieving self sufficiency in natural gas.

The present objects clause of the company already provides for the carrying out business in petrochemicals, but it intends to adopt abundant caution and make it clear that it is seeking to enter oil exploration.

Nagarjuna Fertilisers looks to get into both onshore and offshore exploration in India and abroad and to tap oil and gas reserves and other similar and allied substances. It also intends to organise production, processing and marketing of oil, gas and allied substances within the country and abroad.

The biggest diversification, that of entering the business of power by way of a 1000-mw power project, has made progress, the company said. The project is being undertaken by the Nagarjuna Power Corporation Ltd. After careful evaluation of the other diversification, the steel venture has been decided upon and would be set up at Mangalore as well.

The companys expansion plan to double its fertiliser manufacturing capability in Kakinada is also at an advanced stage of completion. While the total approved cost of the project is Rs 970 crore, the company has already incurred a cost of Rs 550 crore for the purpose.

The project has been financed by way of internal accruals and loans from financial institutions. The company reckons that barring unforeseen circumstances, the expansion project should go on stream in the first half of 1998.

During 1996-97, Nagarjuna Fertilisers produced 7.17 lakh tonne of urea. The product range now includes fertilisers, pesticides, seeds and other agri-related products and are sold all across the country. The sale of pesticides alone rose from Rs 62.39 crore to Rs 84.76 crore in 1996-97. The companys agri-output business division also made good progress in facilitating improvements in farm management practices and farm productivity.

The success of the division, the company says, has further encouraged it to expand its area of operations.

Nagarjuna Palma India Ltd, the joint venture with Palma, has commenced commercial production and is expected to start indigenous production shortly. Nagarjuna Fertilisers has also signed a joint venture agreement with Haifa Chemicals of Israel for production and marketing of water soluble speciality fertilisers.