Indian Farmers Fertiliser Cooperative (Iffco) has chalked out a $1 billion expansion plant spread over India and Egypt. The plan would broadly include backward integration facilities for DAP production, expansion of urea production capacity and introduction of energy saving measures at its ammonia-urea plants.

Objective: Out of the $1 billion investment, around $800 million would be invested in backward integration for di-ammonium phosphate (DAP) production, while the remaining $200 million would be invested in energy saving and urea production and expansion schemes.

Geographic distribution: Out of the $1 billion (Rs.4,400 crore), around Rs.2,700 crore would be earmarked for India while Rs.1,700 crore would be invested in Egypt. The investment plan would be spread over four years.

Financing: Iffco has planned to maintain a 2:1 debt equity ratio for the project. Around $670 million would be raised in debt and $300 million as equity from Iffco's internal accruals. Iffco is in talks with domestic and financial institutions for the debt component.

In Egypt: Iffco has planned to set up a phosphoric acid unit with capacity 5 lakh tpa in Egypt. The plant would be set up in joint venture with Egyptian company, El Nasr Mining Co, which will hold 25 per cent of the equity.  Iffco would be the majority shareholder holding the remaining 75 per cent. Iffco would purchase the entire quantum of phosphoric acid produced at the Egyptian plant. ENMC would supply rock phosphate required for the plant.

Iffco is also in talks with an Egyptian government-owned entity to set up rock phosphate mining project with capacity of 20 lakh tpa.

In India: On the domestic front, Iffco has planned to set up a greenfield 5 lakh tpa phosphoric acid plant in Kutch district of Gujarat. It has also proposed a new plant at Kandla that would produce 18 lakh tpa of di-ammonium phosphate (DAP) and other mixed fertilisers. Iffco has proposed to enhance its urea production capacity from 61 lakh tpa to 86 lakh tpa in the medium term, through a combination of greenfield projects and de-bottlenecking exercises. A new 5 lakh tpa urea production unit (at an undecided location) will be part of the project.

Linkages: The proposed 20 lakh tpa rock phosphate unit in Egypt will be used to feed the greenfield 5 lakh tpa phosphoric acid plant in Kutch. The phosphoric acid thus produced along with the 5 lakh tpa coming form the joint venture Egyptian project (totally 10 lakh tpa) will be used as feedstock for the proposed DAP-mixed fertiliser plant at Kandla.

Completion: Financial closure of all the projects would be completed in 2005-06. All projects are scheduled for completion in four years. Commercial production would commence from the first quarter of 2009