Financial Daily from THE HINDU group of publications
Monday, Dec 20, 2004
Financial Daily from THE HINDU group of publications Monday, Dec 20, 2004 |
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Corporate
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Restructuring Agri-Biz & Commodities - Fertilisers Cargill to demerge fertiliser business into Mosaic India
Ambarish Mukherjee
New Delhi , Dec. 19 CARGILL India Pvt Ltd has decided to demerge its fertiliser business undertaking into a separate company called Mosaic India Pvt Ltd. The newly created company will carry on activities related to the fertiliser business that were earlier conducted by Cargill, sources said. Since 1996, Cargill India had been permitted by the Government to trade in agricultural commodities and processed foods, futures contract options, and derivatives on domestic commodity exchanges, besides importing fertiliser (except for canalised items) and selling it to bulk customers, subject to certain conditions. However, after a recent order by the Delhi High Court approving the scheme of arrangement of demerger of the fertiliser business undertaking of Cargill India into Mosaic India, the former had sought approval of the Foreign Investment Promotion Board (FIPB) to let Mosaic take care of several activities related to the fertiliser business. The FIPB has allowed Mosaic to conduct activities related to the fertiliser business provided it follows all provisions of the Fertiliser Control Order of 1985. Mosaic is now allowed to engage in activities, including bulk import of permissible items, distribution of agricultural inputs, setting up of material handling, bagging and bulking systems, construct piers, wharves and jetties and warehouse farms in the hinterland. It has also been permitted to acquire marine and onshore equipment to facilitate faster load out and discharge of cargo besides import of fertiliser, except for canalised items. When the Government had allowed Cargill to function in the country, it had imposed several conditions on the company, including prior approval for setting up any downstream projects in terms of a subsidiary company or a joint venture. Also, these restrictions included abiding by the National Seeds Policy while importing seeds and importing fertiliser, except for canalised items, to its local account for stocking and selling to bulk consumers including MMTC and STC. The company had also been asked to obtain an industrial license as well as minimum 50 per cent export obligation in case it manufactured vegetable oils for refining (except by solvent extraction process). In its proposal before FIPB, Cargill said that Mosaic India would abide by standard trading conditions in the case of commodities, including no retail trading.
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