Coromandel International, an agri inputs and solutions provider from the Murugappa group, will pay approximately Rs 225 crore for a 45 percent stake in Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company based in Senegal (Africa).
The transaction includes a Rs 75 crore loan infusion into the target company. Coromandel now has access to rock phosphate, a critical raw material in the production of phosphoric acid, an intermediate used in the production of phosphatic fertilizers.
Coromandel operates three fertilizer units that produce approximately 30 lakh tonnes of phosphatic fertilizers, making it the country's largest manufacturer and marketer of phosphatic fertilizer. "This investment will strengthen Coromandel's backward integration and ensure long-term supply security of the key raw material," said Arun Alagappan, Executive Vice Chairman of Coromandel International, in a statement on Friday.
BMCC can meet up to one-third of the company's rock phosphate requirements at full capacity. To meet its phosphoric acid needs, the company has agreements with players such as Tifert (Tunisia) and Foskor (South Africa).
It is also increasing its captive phosphoric acid production at the Visakhapatnam plant and sourcing rock from various countries.
The transaction is being handled by Coromandel International's wholly-owned subsidiary Parry Chemicals. According to a company statement, the transaction is expected to close in the second quarter of this fiscal year.
About Coromandel International:
Coromandel is one of India's largest phosphatic fertilizer players, with a diverse range of agri-products to meet farmers' needs. The company is expanding its agricultural presence with the increased use of complex fertilizers.
It is dedicated to achieving the government's vision of self-sufficiency and has been strengthening its Phosphoric acid capacities by increasing captive production and leveraging its overseas partnerships in Tunisia and South Africa. The investment in Senegal is consistent with the Company's long-term strategic goal of strengthening its sourcing capabilities in order to provide superior value to all stakeholders.
