June 28, 2012
Iffco to launch Canada's US$800 million urea plant
In order to boost supplies for Canada, which is a large importer of farm nutrients, Iffco, India's largest fertiliser company, will invest US$800 million to set up a urea plant in Canada where it can dip into cheap and abundant supply of natural gas.
The 1.25-million-tonne plant is likely to be built in three-to-four years, Iffco managing director US Awasthi told ET.
"We expect to finalise the location in the next two to three months. Then we will have to get an environmental clearance which takes around 18 months. It will be a joint venture with a Canadian partner through an Iffco - led consortium of companies," he said. Iffco is in talks with a few Canadian provinces to finalise the location, he added.
India imports a quarter of urea it consumes, 100% of potash fertilisers and almost 70% of DAP consumed annually.
The company plans to tie up with a shale gas company for sourcing natural gas which constitutes 70-80% of the production cost. Shale gas production has led to a sharp fall in natural gas prices in America, where gas is traded at less than US$3 a unit.
In India, gas is in short supply and is sold at US$4.2 per unit to those which have access to domestic supply while others import LNG at four times the price.