Paradeep Phosphates To Set Up Rs 1,200cr Dap Plant

The public sector Paradeep Phosphates Ltd (PPL), the largest producer of di-ammonium phosphates (DAP) in the country, proposes to set up a Rs 1,200 crore urea and ammonia manufacturing facility in the joint sector.

The diversification is aimed at improving the companys viability through a balance product mix of phosphatic and nitrogenous fertilisers, the companys chairman cum managing director said.

The proposed venture will have an installed capacity of one lakh tonnes of ammonia and five lakh tonnes of urea per annum. The funding of the project will be based on a debt equity mix of 1:1.

In the equity component of Rs 800 crore, the investment of PPL, which is currently facing a cash crunch, will be a mere 10 per cent at Rs 60 crore. Considering our financial positions we intend to be a minority stake holder while allowing the joint sector partner to be the lead promoter, the CMD said.

 

Sources said PPL will prefer and existing ammonia and urea manufacturer to be the joint sector partner. Major producers of ammonia from the Gulf and the north-east American nations have shown interest. But a final decision will be taken towards the end of the year, they added.

The companys chairman cum managing director said that it is being logical that urea units be located close to the source of its main raw material-ammonia. The proposed complex may be located in one of the oil-rich countries where ammonia is available in plenty. He, however, pointed out that PPL will insist on entering into a buy-back arrangement with the proposed joint sector company so that it could import ammonia for use in its DAP plant in Paradeep and urea for sale in the country.