Business Daily from THE HINDU group of publications
Thursday, Nov 16, 2006
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Business Daily from THE HINDU group of publications Thursday, Nov 16, 2006 ePaper |
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Corporate
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Overseas Investments The Indian investment in Burrup Raghuvir Srinivasan
KARRATHA'S INDIAN investment... The ammonia complex of Burrup Fertislisers, promoted by the Oswals.
Recently in Karratha, Western Australia As you look out the window of the Qantas Boeing 737-800 preparing to land at the small north-west Australian industrial town of Karratha, a couple of large domes and a few reactor columns in a fenced compound stand out in what is otherwise a bleak, brown landscape appearing bereft of civilisation. This industrial complex, producing liquid ammonia from natural gas, represents the biggest Indian investment in Australia. The A$630-million plant of Burrup Fertilisers Pty Ltd, promoted by the Oswals, is one of those rare investments - in fact, it is the first - in secondary processing of gas in Western Australia, which is rich with resources such as natural gas, iron ore and gold. Named after the Burrup Peninsula where it is located, Burrup Fertilisers sent out its first ammonia shipment in June this year and has since shipped 10 more consignments totalling 2.50 lakh tonnes to buyers in China, Korea, India and even far off Alaska. Why did the Oswals choose this remote region of Australia to locate an ammonia complex? "Simple", says Mr Wolfgang Jovanovich, Director- Corporate, "There is abundant natural gas in this region at economical prices, it is located in proximity to the Asian market where our buyers are, we have a good deep-water port that can handle large vessels and finally, you are allowed to have a 100 per cent owned company in Australia," he adds. As you walk around the complex hostingthe 7.6-lakh tonnes per annum ammonia plant and utilities including a captive power plant along with Mr Hemant Deshmukh, General Manager, who heads the plant, you notice that a lot of the equipment and machinery there bear Indian brand names. "L&T fabricated a large part of the plant while others such as Godrej have supplied some of the equipment here," says Mr Deshmukh. He explaines that fabrication expertise is better and cheaper in India. Burrup has a 25-year gas supply contract signed up at rates significantly lower than the prevailing one for natural gas. Power is expensive in Western Australia but the complex has its own 44-MW captive power plant. Burrup also has the sales side well sewn up through a 20-year offtake agreement with Norway's Yara International, the world's largest producer and distributor of ammonia and nitrate fertilisers. Yara has also taken a 30-per cent equity stake in Burrup Fertilisers where the Oswals hold 55 per cent and 15 per cent rests with other private investors. Operations at the plant are directed from the top by a group of Indian managers - there are 17 Indian employees in a total of 68 at the plant - with expertise in the fertiliser sector in India. Given that there are not too many fertiliser units in Australia, Mr Deshmukh says that they do face a problem in getting experienced local manpower but they manage by on-the-job training of the local workers. The experience with the commissioning and operation of the ammonia complex has been so good that Burrup Fertilisers is now weighing plans to expand into the production of urea and ammonium nitrate.
More Stories on : Overseas Investments | Fertilisers
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