By IANS
New Delhi : The Indian Farmers Fertiliser Cooperative Ltd (IFFCO) has agreed to invest $100 million (Rs.4 billion) to restore production capacity of the ailing Industries Chimiques de Senegal’s (ICS) phosphoric acid plant, said an official statement issued Monday.
ICS is a joint venture company with the government of India holding 6.97 percent, IFFCO 19.1 percent and the government of Senegal 47 percent of the equity.
“IFFCO has signed a memorandum of understanding (MoU) with the Senegal government for the revival of the 660,000-tonne capacity phosphoric acid plant in Senegal,” the statement said.
Senegal’s minister of mines and industry and IFFCO’s managing director U.S. Awasthi signed the MoU during the recent visit of an Indian delegation to Senegal.
“The MoU will be soon converted into a legal document,” the statement said.
“Under the MoU, IFFCO will invest $100 million in the next three years for increasing the production to the optimum level of efficiency at 660,000 tonne besides providing a loan of $10 million to the JV company ICS, repayable on priority,” the statement said.
“Under the MoU. IFFCO will handle the existing debt of the company to ensure its repayment to Senegalese banks and international financial organisations in 15 years and to the trade creditors in 2 years,” the statement said.
IFFCO is entitled to export 80 percent of the phosphoric acid produced by the plant to India.
However, the plant has been running at just 30 per cent of its rated capacity for the last few years and has accumulated losses of nearly Rs.13 billion.
Loss of production at the plant has, in turn, contributed to reduction in supply of phosphoric acid to India.
“Restructuring of ICS will improve the availability of phosphoric acid in India as IFFCO will import the bulk of it. Besides, it is also expected to have a sobering effect on the international price trend, which has been rising for sometime,” said the statement.