New Delhi, Dec 21: Fearing the collapse of Indo-Senegal joint venture which can hit supply of Phosphoric acid, a raw material required for Indian phosphoric fertiliser manufacturers, IFFCO goaded by the government has rushed to clinch an agreement with the loss-making Senegal-based company afresh by infusing an additional amount of 100 million dollars towards its recapitalisation.
The MoU signed between Senegal's Minister of Mines and Industry and Dr US Awasthi, MD of IFFCO, a premier fertiliser manufacutring cooperative last week, seeks to restore production of Phosphoric acid to 100 per cent of its installed capacity besides taking care of cumulative loss of Rs 1300 crore it suffered by the end of last year.
At present, the production of the Senegal-based unit, run by ICS Senegal company with installed capacity of 6.6 lakh tonnes has come down to 30 per cent and the reduction in production was attributed to non-supply of Phosphoric acid, prices of which rose sharply of late.
The company has equity participation of 6.97 per cent of Indian Government and 19.06 per cent of IFFCO with major participation of Senegal at 47 per cent. And 80 per cent of production is currently imported by India.
IFFCO hurried to reclinch the agreement as a French company, Groupe Roulier was entering into a separate agreement with Senegal Government which would have threatened the long-term availability of the raw material to India and also it will have untimately managed the control of the ICS Senegal.
At the same time, reconstruction plan for rehabilitation of the company was to be submitted before a native court in Dakar there before December 17 this year. And, in the absence of any plan, the court could have ordered liquidation of the company, jeopardising the IFFCO offtake agreement.
Earlier, IFFCO offered recapitalisation investment of 80 million dollars to Senegal but that did not materialise.