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Business Posted On Wednesday, February 10, 2010 | United News of India
New Delhi, Feb 10:
In a major bid to diversify, Indian Farmers Fertiliser Cooperative Ltd (IFFCO) today announced acquiring a 20 per cent stake in Canada's GrowMax Agri Corporation in a potash project and 10 per cent stake in America's Petrogas for oil and gas exploration.
''IFFCO has become a joint venture partner in the Canadian company GrowMax, which owns concessions over large potash deposits covering about 820 square kilometres area in Bayovar project in Peru,'' IFFCO Managing Director U S Awasthi told a news conference here.
GrowMax is a subsidiary of America's Petrogas Inc, which is a Canadian Company in the Oil and Gas sector, currently engaged in exploring on shore oil wells in Argentina. The company has already struck oil and commenced trial production in its Medanito Sur expansion in Neuquen Basin in central Argentina.
America's Petrogas already owns a large land base covering about 1.5 million acres and is negotiating for more such assets in that country. Americas Petrogas is a publicly traded company on the TSX Venture Exchange in Canada.
Mr Awasthi, however, did not divulge any details about the price it paid for acquiring these stakes or the quantum of the money paid in this regard.
There are no Potash deposits in India and the entire requirement is imported. It is an important ingredient for the production of fertilisers.
Mr Awasthi said there is a 50 per cent buy back arrangement reached with GrowMax adding that the first priority would be to bring the product for domestic consumption.
GrowMax intends to explore the possibility of Phosphates in its concession area in Sechura desert in Peru.
''IFFCO is negotiating to have the right to offtake 50 per cent of production of Rock Phosphate from the Bayovar project,'' Mr Awasthi said.
IFFCO is the first entity in India to have overseas investment in any Potash project.
''It is an extraordinary unique potash project involving relatively low risk and low capital expenditure combined with an ideal region for low cost solar evaporating processing,'' Mr Awasthi said.
Talking about entry into oil and gas exploration, Mr Awasthi said IFFCO has no plans to enter into domestic exploration or production.
He said the largest manufacturer and marketer of fertilisers in the co-operative sector considered investing in four projects overseas, but went in finally for putting money in Americas Petrogas. ''Oil and gas projects are the areas of business that we have been considering for a very long time,'' he said.
He said that the investment in these areas offers an opportunity to IFFCO to set up a gas based fertiliser plant in the near future.
When asked as to why was it that the fertiliser co-operative giant has decided to invest in gas projects, Mr Awasthi replied to add to shareholders wealth and bring more monies into the hands of farmers.
He said this had been the constant endeavour of the company, which he claimed was well managed. ''We have already diversified into sectors such as insurance, power, rural mobile telephony, agro-processing SEZ and commodity exchange,'' he said.
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