The Hindu Business Line : IFFCO may pull out from Egypt joint venture

Upset with the Egyptian Government changing rules frequently and that too with retrospective effect, Indian Farmers’ Fertiliser Cooperative Ltd (IFFCO), the largest farmers’ cooperative in the world, is all set to pull out of its Egyptian joint venture with El Nasr for manufacturing and importing phosphoric acid.

It has now zeroed in on Jordan, another rock phosphate rich country and has incorporated a joint venture company – Jordan India Fertiliser Company – with the country’s largest rock phosphate miner Jordan Phosphate Mining Company (JPMC).

Phosphoric acid is the main raw material for manufacturing di-ammonium phosphate (DAP), one of the main fertilisers used by Indian farmers.

Utilities and other facilities are proposed to come up adjacent to the Eshydia mines in Jordan.

According to the IFFCO Managing Director, Dr U.S. Awasthi, the Egyptian Government wanted to change the basic concept with which the joint venture started.

“Earlier they said it would be a private free zone but now they are saying there would be no private free zone and so no concessions would be available,” he said.

Mr Awasthi said that with changed market conditions, the Egyptian partner wants all the agreements to be renegotiated.

Pointing out that in Egypt laws change frequently and become effective retrospectively, the IFFCO Managing Director said that “it seems that their entire regulatory framework is too Government-centred unlike many other countries.”

The MoU with the Jordan company had been signed in February this year and the company has also been incorporated.

“We are now in talks with the consultants and contractors for giving the whole issue a final shape,” Mr Awasthi said.

There are two basic differences between the two joint ventures. While in the Egyptian venture IFFCO had 74 per cent, in case of Jordan the cooperative will hold 52 per cent with the foreign partner holding the remaining 48 per cent.

Simultaneously, investment would also go up from the stipulated $325 million in Egypt to an estimated $350 million in Jordan.

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Iffco sets up joint venture in Egypt

More Stories on : Overseas Investments | Fertilisers

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