Coromandel intl to buy 45% stake in Senegal-based BMCC for Rs 225 cr

Hyderabad Coromandel International Limited is set to acquire 45 per cent equity stake in Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company based in Senegal, Africa at an outlay of $19.6 million (Rs 225 crore), besides loan infusion into BMCC of a further $9.7 million. The acquisition is happening through its wholly owned subsidiary Parry Chemicals Ltd. The transaction is expected to be completed in the second quarter of FY23 and is subject to satisfactory completion of conditions precedent as contained in the agreements.

Arun Alagappan, Executive Vice Chairman, Coromandel International Limited, said: "As part of the Prime Minister's 'Atmanirbhar Bharat' vision, India is working towards achieving self-sufficiency in Phosphatic fertiliser production. Given the high dependence on rock phosphate imports, which is a key raw material for manufacturing Phosphoric acid, the proposed investment will be a step towards achieving long term sustainability and supply security goals for meeting country's fertiliser needs. I would like to thank the Government of India for its continuous guidance and encouragement towards establishing backward linkages for key raw materials for fertilisers. This investment will play a crucial role in building our nation's supply security for Phosphatic fertilisers and improve the balanced nutrition and productivity for the farming community."

Coromandel International is India's leading agri input solution provider and is in the business of fertilisers, crop protection, bio products, speciality nutrients, organic fertilisers and retail. It is the largest private phosphatic fertilizer manufacturer and marketer in India and has been a trusted partner for farmers over the years. It operates 3 fertiliser units for manufacturing over 3 million ton of phosphatic fertilisers. Rock Phosphate is a key raw material for manufacturing Phosphoric acid, an intermediate used for Phosphatic fertiliser production.

Coromandel has strategic tie up with leading integrated players like Tifert (Tunisia) and Foskor (South Africa) for meeting its Phosphoric acid requirements. Further, it has been augmenting its captive phosphoric acid production at Vizag plant and is sourcing rock from various countries. As part of its strategy to strengthen the value chain, Coromandel has been evaluating opportunities in the Phosphate mining to secure its rock phosphate needs.

Towards this, Coromandel's Board has approved buyout of equity of 45 per cent in BMCC. BMCC is in the business of mining, production, and sale of Rock Phosphate. BMCC has since stabilized its operations and commenced active production from 2021.

This investment will help in strengthening Coromandel's backward integration and will ensure long term supply security of the key raw material. At full capacity, BMCC can meet upto one-third of the Company's rock phosphate requirement.

Coromandel is committed towards achieving the Government's self-sufficiency vision and has been strengthening its Phosphoric acid capacities by augmenting its captive production and leveraging its overseas partnerships in Tunisia and South Africa. The investment in Senegal is in line with the Company's long term strategic objective of strengthening its sourcing capabilities to deliver superior value to all its stakeholders.