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IFC likely to pump in $74 million into UPLqrcode

Oct. 10, 2008

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Oct. 10, 2008
International Finance Corporation (IFC) is likely to make an investment of $74 million in United Phosphorus Ltd (UPL), a listed entity with an interest in manufacturing agrochemicals, industrial and specialty chemicals with plants in Gujarat.?

The company manufactures products such as pesticides, fumigrants and rodenticides on the agrochemicals side, and chlor-alkali and chemical products on the industrial and specialty areas.?

According to sources, the IFC financing will help UPL meet its funding needs over the next three years, estimated at about $100 million, which includes, expanding its capacities and products portfolio through capital investments and acquisitions apart from achieving horizontal and vertical integration to increase margins and improve efficiency. The funding will also help the company in setting up new plants for new products in India.?

The proposed funds will be used in leveraging India as a low-cost production base by expanding expanding the plants processes and by rationalising the company's cost base. The company's near term capital expenditures are planned mostly for their existing facilities in Jhagadia and Ankleshwar, Gujarat, but are also available for permitted acquisitions. UPL, which is focusing on agrochemicals, specifically crop-protection products, brings significant benefits to the large and relatively underserved farming population in India. UPL's crop-protection products help improve agricultural yields and reduce risks related to primary agriculture. The economies of scale provided by UPL's global business and the associated cost savings, result in cheaper and better products to farmers in India and in other countries.?

Currently, UPL employs around 3,000 direct employees at its different plants. In addition, it has more than 900 distributors spread across the country and abroad. UPL's growth will support current employment levels and create new employment opportunities not only in India but in other emerging markets, the sources maintained.?

Earlier in 2003, IFC partnered with UPL when the company was in a tight liquidity position and needed long term financing and strategic advice.?

IFC is now a strategic partner with UPL. For the quarter ended June 30, 2008, the company reported a total income of Rs 553.67 crore with a net profit of Rs 46.63 crore.

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