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RCF’s African projects stalled

RCF’s plan to set up facilities in Africa has been delayed, as its partners do not believe that there is any commercial value in fertilisers

India’s largest fertiliser maker by capacity and revenue, Rashtriya Chemicals and Fertilizers (RCF) Ltd’s plans to set up facilities in the African continent have been stalled. RCF’s mining partner in South Africa doesn’t find commercial value in investing in the continent, due to drop in prices of diammonium phosphate (DAP), company officials said.

One of its major partners, Foskor, has had reservations in setting up these facilities owing to the drop in DAP prices, a senior official from RCF said.

RCF had planned to build a greenfield DAP and urea facilities in South Africa and Mozambique last year. Both plants were estimated to have cost Rs14,000 crore-Rs15,000 crore. Under the memorandum of understanding (MoU) between RCF, Foskor and South Africa's Industrial Development Corp (IDC), the companies were to produce about 1.1 million tonnes to 1.2 million tonnes per year of urea and about 600,000-700,000 tonnes per year of phosphate fertilisers at their Mozambique plant.

“The international fertiliser market is not conducive for heavy investments,” the RCF official said.

The fact that Foskor would have provided the raw materials like mineral and rock phosphate for its facilities would have made it much easier for the fertiliser company to produce DAP and urea. Also, a key advantage would have been its ability to source natural gas at a much lower cost.

"We are looking at Africa closely as there are abundant sources of minerals which need to be exploited. However, we will not be pushing this forward without Foskor by our side," the official said.

Another official tells us that the deal is also being delayed by both governments who have not agreed as to who would get majority of the produce. There is also an argument as to the distribution of natural gas in South Africa, which is a major feedstock for producing urea.

According to him, the issues related to each company’s stake in the project and the quantity of the produce to be shipped to India has lead to the current situation.
RCF had agreed to set up facilities there due to the availability of feedstock resources and strong demand in the country. According to the original plan, the company was to send the produce to India through ships from Port Mabuto, at Mozambique. RCF would have to import almost 90% of the finished products for its Indian market requirements as well as exports.


The elephant in the room

India's colourful, stubborn loquaciousness, so enchanting on a personal level, turns out to be anything but that when it comes to the country's international relations. On crucial matters of global concern, from climate change to multilateral trade, India all too often just says no.

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Shadi Katyal

8 years ago

The article in many ways is very bias but if India did not look after her own interest who would.There is alot of prejudice shown of the cold war days.
The writer has to know that India is not like other nations who will jump your hoops.True that India has done more damage to herself in international groups as of having no stand but NO to everything.
The point of Nuclear non proliferation treaty or Doha conference etc are one sided close mind objects.
Why would India be interested in World Bank and its preident affair?We are back to blackmail India by such articles.
It is true that India has felt being mistreated and offered UN Permanent seat as it was a British Colony though many Indian intellectuals spent hard work at Lake Success.
Nehru and Menon did create such anti Indian climate by just speaking when close mouth had been better. It was Nehru who for his own ego decided to go for Panchsheel and misread the world politics. When China attacked India no impotent member of such non aligned nation even uttered a word. It was that time Indis should have learnt but no . India has tried to be leader of poor and undeveloped nations though none of them have asked but feel that is her moral duty.
India might have failed on certain demands of West but why should any nation give up her rights because few of them want.
It is time that article of this nature showing complete lack of understanding and respect should stop publishing one sided views.
Would like to hear what the writer or publisher has to state about US and WEST allowing Pakistan not only develop Nuclear arms but even selling it to other countries.
Cold war is over and the writer should get his mind out of the era and look forward to new thinking.I

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