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Yara International looking aggressively at clean ammonia: Global CEO

In a Q&A, Svein Tore Holsether says his company is looking at more expansions in India as well

Svein Tore Holsether, CEO, Yara International

Svein Tore Holsether, CEO, Yara International

Sanjeeb Mukhejee New Delhi
Global Fertiliser major Yara International’s acquisition of Tata Chemicals' Babrala fertiliser plant five years ago is one of the biggest FDI to have come into the highly regulated sector. In an interview with Sanjeeb Mukherjee, Svein Tore Holsether, President and CEO, Yara International, outlines the firm’s growth trajectory and how it plans to transition into a ‘clean ammonia company’ in which India will play a key role. Edited Excerpts:

Q: You entered the urea business in India five years ago by acquiring Tata Chemicals' Babrala Plant in UP. How has the journey been so far, particularly in light of the recent changes in the domestic fertiliser market?

Ans:  We have learnt a lot from India and that speaks a lot about the competence in India. I think it's also an important message to Indian farmers that the Yara is here for the long term and we're willing to put more money behind that as well. I think what we have done by the acquisition is that we have sent a very loud message that we are here for the long term and that is not just marketing, it’s a learning.

Q: Are you looking at any other products such as DAP or other bulk products a few years down the line?

Ans:  Well, we're always looking at evolving our product portfolio and looking at how the market evolves. We will look at more expansion here in India.

Q) What sort of expansion will that be? Are you looking at more direct buyouts?

Ans: It depends. That's based more on the business case. But looking at the growth in the sector, I'd say we can do a lot for farmers when I listen to their stories on productivity, quality, helping their crops and so on. To me that says a lot about the market potential here, and we are ready to grow with that.

Q: You have invested $675 million in India since 2018. What are your investment plans in the next five years?

Ans: A lot depends on the market development.

Q) Won't you at least be doubling your target?

Ans: We are really not setting targets. If you are focused on developing the market, we invest. I'm not doing it the other way around.

Q: Talking about foliar application, nano urea is one of the most exciting things that the government has been promoting. Do you intend manufacture nano urea in your plant?

Ans: We are yet to look into it to see whether this is workable or not. It’s in the phase where people are still looking at it. We have so many things in our portfolio already (the company has 35 per cent market share in the premium products market). So we'd rather put even more focus and horsepower behind what we already have because it can give a huge return.

Q) Yara is trying to be a big player in the green and blue ammonia market. What are your plans on this for India?

Ans: I am very excited about this. We are the No. 1 trader of ammonia in the world. We have 12 ammonia carrying vessels that can ship across the world. We have 18 production farms across the world, and we have terminals--and that's very exciting infrastructure now.

Q) How much of the total quantum of ammonia that you currently produce is green?

Ans: Almost nothing, yet. We do it stepwise. At present, Yara produces ammonia in two ways. The main method is using natural gas. Natural gas is CH4 and then the carbon goes up in the air and the hydrogen is what we consume--not all goes up there because we capture a bit and sell it to units making aerated water or beer or food preservatives and so on. Then we have a site in the US where we just buy hydrogen from a chemical unit nearby. They have hydrogen as a byproduct everywhere. So that's how we make ammonia today, but it’s a very promising thing.

Q): So, all those 12 plants will gradually be converted to green, is that right?

Ans: We will be realistic on the steps. Ultimately, I think it will be produced using renewable energy, but it has to be done in phases to facilitate the market as well.

Q) At present, you don’t ship any ammonia to India. Do you plan to, in future?

Ans: We can; we can ship ammonia to India too. In the future, we can also be a buyer of green ammonia from India. So, if you looked at Yara 3-4 years ago, you would say, “Oh, it’s a fertiliser company”. Well, no, we are into fertilisers, but we are also into energy and infrastructure. We are discussing it with many partners.

Q): Is that a global transition you are aiming for --to become a green energy infrastructure company rather than stick to just fertilisers?

Ans: Yes, so our core will always be fertiliser, but we see opportunities in other sectors as well and that’s how we are setting up a company called ‘Yara Clean Ammonia’. Actually it has already been set up internally, with separate governance and we are looking at stock listing in order to help it grow.

Q) One in the past one-and-a-half to two years, the fertiliser industry has gone through peaks and troughs. Do you see this continuing? Will the slowdown in prices continue for a while across all products?

Ans: It’s impossible to predict because of various parts at the moment and energy prices will be very important. It takes energy to produce fertilisers. 

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First Published: Mar 30 2023 | 9:00 AM IST

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