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COMPANY REPORT

Yara acquires Tata Chemicals’ urea business, including Babrala assets
Wednesday, 24 January, 2018, 08 : 00 AM [IST]
Our Bureau, Bengaluru
Yara International ASA, the world’s leading supplier of fertilisers, has completed the acquisition of the Tata Chemicals’ urea business. The Rs 2,682-crore deal included the transfer of all assets and liabilities relating to the Babrala plant in Uttar Pradesh. It is the first foreign direct investment (FDI) in the highly-regulated urea sector.

“We are pleased to announce the completion of the acquisition of Tata Chemicals’ urea business. It represents a major step forward for us, as we deepen our footprint in the world’s second largest fertiliser market,” said Svein Tore Holsether, president and chief executive, Yara.

“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,” he added.

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 hectare (ha) of grain and four million ha of horticulture crops.

Yara’s turnover in India, which is currently estimated to be about $40 million in India, will increase to $350 million.

“Yara has operations in 60 countries and sales to 160 locations globally. This has given Yara a deep understanding and knowledge of crop nutrition under varied soil and climatic conditions,” said Terje Knutsen, executive vice-president, crop nutrition, Yara.

“We believe the Indian agricultural sector can become more productive by improving fertiliser application practices,” he added.

“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,” Knutsen said.

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 tonne ammonia and 1.2 million tonne urea, and generated revenues and profit before tax of respectively $296 million and $29 million as per March 31, 2017.

The urea produced is allocated for Uttar Pradesh, Uttarakhand, Bihar, West Bengal, Punjab and Haryana and will be marketed under Yara’s global brand name for premium urea products like YaraVera.

According to Narasimha Rao, chief executive officer and president, Yara India, “Prime minister Narendra Modi has announced an impressive target of doubling farmer’s income by 2022, and Yara is committed to support this mission.”

In 2017, Yara impacted over 2,00,000 farmers in India. In addition to urea, farmers in the northern belt will now have access to Yara’s differentiated portfolio of fertiliser products.

“Our crop nutrition solution will help in optimising yield and quality, for instance a comprehensive range of analytical services, including soil testing, in a world-class laboratory at Babrala,” Rao said.

“Yara also offers digital tools like Yara CheckIT, which enables growers to diagnose nutrient deficiencies in crops,” he added.
 
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