India firms, Uralchem sign deal for 1.8-2 mn tonnes urea plant in Russia

In one of the biggest joint ventures between Indian companies and their foreign partners in the fertiliser sector outside India, Rashtriya Chemicals and Fertilizers Limited, National Fertilizers Limited, and Indian Potash Limited today signed a memorandum of understanding with Russia’s Uralchem Group to set up a 1.8-2 million tonnes urea plant in Russia.

 

The deal, which was signed during the visit of Russian President Vladimir Putin to India, marks one of the biggest joint ventures between Indian companies and their foreign counterparts to set up a fertiliser production plant outside India.

 

So far, the biggest such joint venture project is Oman India Fertiliser Ltd in Oman to produce around 1.65 million tonnes of urea per annum. India’s Iffco and Kribhco are partners in it. 

Uralchem JSC, or Joint Stock Company, according to a statement posted on its website, which is part of the Uralchem Group, is one of the world’s largest producers and exporters of nitrogen and compound fertilisers. The company’s production assets are located in Russia’s Kaliningrad Region, Kirov Region, Moscow Region and Perm Region.

 

The Uralchem Group itself is a leading global producer of mineral fertilisers and chemical products. Its key assets include three major Russian companies — Uralchem JSC, Uralkali PJSC, and Toaz JSC — with a cumulative production capacity of about 25 million tonnes. The number of people employed by the Uralchem Group is approximately 38,000.

 

The Russian plant, according to the statement, will get supplies of ammonia produced by Togliattiazot JSC, or Toaz JSC, and the financing of the project will be done by the Indian companies until the commencement of the plant’s commercial operation.

 

“The technical parameters and financial viability of the project are currently under a detailed examination. The parties are also negotiating the corporate structure and governance approach in respect of the joint venture,” the statement said.

 

Welcoming the development, Dmitry Konyaev, Uralchem CEO, said India is a leading agricultural player globally and also one of the world’s biggest consumers of mineral fertilisers. For the Uralchem Group, India has historically been a strategic market, and it is committed to expanding and deepening its cooperation with Indian partners.

 

In their joint statement, President Putin and Prime Minister Narendra Modi welcomed the steps to ensure long-term supply of fertilisers to India and discussed the potential establishment of joint ventures in this area. Modi, in his address, also highlighted Russia’s contribution in fostering this sphere.

 

Even outside this joint venture, data shows fertiliser imports from Russia to India have grown manifold in the last few years and the country has emerged as one of the main suppliers of urea and di-ammonium phosphate (DAP) to India.

 

Data shows that between 2017-18 and 2023-24, India’s imports of Russian urea have grown by a compound annual growth rate (CAGR) of 62.31 per cent, while total imports of all products, including DAP and NPKS, have risen by around 22.01 per cent CAGR during the same period.

 

Russia’s share in India’s total fertiliser imports has grown from a mere 7.68 per cent in 2017-18 to almost 27 per cent in 2023-24, making it a significant player in India’s fertiliser story. Apart from fertilisers, cooperation was also sought in the marine and aquaculture sectors between the two nations.