Yara International ASA has announced the successful completion of its acquisition of the Tata Chemicals’ urea business. The Rs 2682 Crore deal included the transfer of all assets and liabilities (working capital) relating to the Babrala plant in Uttar Pradesh. It is the first foreign direct investment in the highly regulated urea sector.
“We are pleased to announce the completion of the acquisition of the Tata Chemicals’ urea business. It represents a major step forward for us, as we deepen our footprint in the world’s second largest fertilizer market. The Indian agricultural sector has enormous potential, which will also benefit the overall economic growth in India. We are now welcoming the opportunity to contribute with our knowledge and solutions to improve the lives of farmers in India,” said Svein Tore Holsether, President and CEO of Yara.
With this acquisition, Yara gains a significant position in the Northern region, with access to a strong network of 650-700 dealers. It will enable the company to provide enhanced crop nutrition solutions to farmers in North India which has 31 million hectares (Ha) of grain and 4 million Ha of horticulture crops. Yara’s turnover which is currently around USD 40 Mn in India will increase to USD 350 Mn.
“Yara has operations in 60 countries and sales to 160 countries worldwide. This has given Yara a deep understanding and knowledge of crop nutrition under varied soil and climatic conditions. We believe the Indian agricultural sector can become more productive by improving fertilizer application practices. Our experience has shown that working closely with the Indian farmer to ensure that the benefits of balanced crop nutrition are clearly demonstrated, has helped growers to improve their yields and increase their profitability,” said Terje Knutsen, EVP Crop Nutrition.
The Babrala plant was commissioned in 1994, and is the most energy efficient plant in India, with energy efficiency on par with Yara’s best plants across the globe. The acquired plant has an annual production of 0.7 million tonnes ammonia and 1.2 million tonnes urea, and generated revenues and Profit Before Tax of respectively USD 296 million and USD 29 million in the financial year ended 31 March 2017. The urea produced is allocated for the states of Uttar Pradesh, Uttarakhand, Bihar, West Bengal, Punjab and Haryana and will be marketed under Yara’s global brand name for premium urea products – YaraVera.
Expressing views on the occasion, Narasimha Rao, CEO and President, Yara India said, “Prime Minister Narendra Modi has announced an impressive target of doubling farmer’s income by 2022 and Yara is committed to support this mission.”