Murugappa Group's Coromandel International Ltd, India's leading agriculture input solution provider, will acquire a 45 percent stake in the Senegal-based Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company, for $19.6 million (Rs 150 crore approximately).
A loan infusion of $9.7 million (around Rs 75 crore) will be made into BMCC in addition to the acquisition through fully owned subsidiary Parry Chemicals, Coromandel said on May 6.
The deal is expected to close in the second quarter of the fiscal year 2022-23, subject to the completion of conditions precedent as contained in the agreements, it said.
“As part of the Hon’ble Prime Minister’s ‘Atmanirbhar Bharat’ vision, India is working towards achieving self-sufficiency in Phosphatic fertiliser production. Given the high dependence on rock phosphate imports, which is a key raw material for manufacturing phosphoric acid, the proposed investment will be a step towards achieving long-term sustainability and supply security goals for meeting country’s fertiliser needs," Coromandel executive vice chairman Arun Alagappan said.
The investment would play a crucial role in building India's supply security for phosphatic fertilisers and improve the balanced nutrition and productivity for the farming community, he said.
Rock phosphate is a key raw material in the manufacturing of phosphoric acid, an intermediate used in phosphatic fertiliser production.
Coromandel, which is in the business of fertilisers, organic fertilisers, crop protection, bio-products and speciality nutrients, has strategic tie-ups with leading integrated players like Tifert (Tunisia) and Foskor (South Africa) for meeting its phosphoric acid requirements.
It has been augmenting its captive phosphoric acid production at its Vizag plant and is sourcing rock from various countries.
As part of its strategy to strengthen the value chain, Coromandel has been evaluating opportunities in the phosphate mining to secure its rock phosphate needs, the company said.
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