Deepak Fertilisers and Petrochemicals Corp, a leading Pune-based producer of chemicals and fertilisers, plans to invest about $350 million in a technical ammonium nitrate (TAN) plant in south Australia.
The company, with a turnover of $350 million, is a leading TAN producer – ranking fifth in the world – with a capacity of half a million tonnes per annum. The new, 300,000 tpa plant in south Australia will provide cost-effective TAN supplies to end-users in Australia.
''The government of south Australia has identified a potentially suitable site for the project, which will be the subject of a further feasibility study,'' according to a company press release on Wednesday. ''The site is close to a deep sea port and nearby city having a long established industrial history with complete infrastructure, skilled workforce, etc., thereby providing the project with a more favourable cost competitive construction and operating environment compared to many other parts of Australia.''
Deepak Fertilisers has 20 years of experience in the manufacturing and marketing of TAN, a critical input in the mining and construction industry. It recently commissioned a brownfield 300,000-tonne TAN plant in India.
Last week, Norway's fertiliser and industrial chemicals major Yara announced it would invest $700 million in a 330,000-tonne TAN plant in western Australia. A company spokesman said demand for TAN from the mining industry was growing. TAN is a major ingredient in the production of civilian explosives.
The western Australia plant will be promoted as a 50:50 joint venture between Yara and Burrup Holdings, set up by Pankaj and Radhika Oswal, together with their Norwegian partner in 2000 in Australia. The Oswals have a 65 per cent share in Burrup Holdings and Yara holds the remaining 35 per cent.
However, relations between the Oswals and Yara have been strained and the Norwegian group has been keen to increase its stake in Burrup, which is also facing charges of financial irregularities. Yara had last year threatened legal action against Burrup Holdings.
Pankaj Oswal, the Indian-origin Australian businessman, is one of the richest Australians. His father, Abhey Osawal, is the promoter of the troubled Oswal Agro Group, and chairman and managing director of Oswal Chemicals and Fertilisers.
Last week, the Oswal Chemicals scrip touched a 52-week high at the National Stock Exchange. The company reported a turnover of Rs.102.37 crore for the December quarter (Rs.14.66 crore in the December 2009 quarter) and a net profit of Rs.22.22 crore (Rs.3.99 crore).