New Delhi, Dec 24 (UNI) The Indian Farmers Fertilizer Cooperative (IFFCO) has signed a Memorandum of Understanding with the Senegal Government for revival of 6.6 lakh tonne capacity Phosphoric acid plant in Senegal.
The Industries Chimiques de Senegal(ICS) is a joint venture company with Government of India holding 6.97 per cent, IFFCO 19.1 per cent and Government of Senegal 47 per cent of the equity.
Under the MoU, IFFCO will invest 100 million dollars in the next three years for increasing the production to the optimum level of efficiency at approximately 600,000 tonne. IFFCO will also provide a loan of 10 million dollars to the company repayable on priority.
IFFCO will handle the existing debt of the company under the MoU to ensure its repayment to the Senegalese banks and international financial organisations in 15 years and those to the trade creditors in two years.
Restructuring of ICS will improve the availability of Phosphoric acid in the country as IFFCO will import bulk of it. It is also expected to have a sobering effect on the international price trend which has been rising for sometime.
The MOU was signed by the Minister of Mines and Industry, Government of Senegal and Managing Director of IFFCO Dr U S Awasthi.
The MOU will be soon converted into a legal document.
The ICS now running at 30 per cent capacity, exports 80 per cent of its produce to IFFCO under an earlier agreement. It has accumulated losses of nearly Rs 1300 crore over the last few years.
Loss of production of ICS has contributed to reduction in supply of Phosphoric Acid whose prices are rising steeply.
The IFFCO-led consortium had made an offer to inject 80 million dollars in July this year for recapitalisation of ICS but the move suffered a set back after the Senegalese government signed a deal with Gruope Roullier (RG) of France in November this year. The agreement with RG threatened the availability of Phosphoric Acid to India under the long term off take contract but would have also led to management control of ICS in the hands of the French company.
Secretary, Department of Fertilisers Dr J S Sarma led the Indian delegation at the detailed negotiations leading to the signing of the MoU.