June 14, 2012

Nagarjuna Fertilizers and Chemicals Ltd (NFCL) is seeking to invest INR5,000 crore (US$898 million) in developing its fertiliser plant in Kakinada by building a brownfield urea project with a capacity of 1.3 million tonnes/annum.

This will take up the total capacity of the Kakinada plant to around three million tonnes per annum. The Kakinada facility currently has two plants making urea and ammonia with a total capacity of 1.6 mpta and is spread over 1100 acres. The new expansion facility is slated to come up within the existing complex.

"We are adding 1.3 mtpa capacity over the next three years at a cost of INR5,000 crore (US$898 million). We shall commence work on the project next year. It will take two years to complete," Nagarjuna group chairman K S Raju said on Tuesday (June 12).

The company hopes to raise funds for the expansion through a combination of debt, equity and internal accruals. "Debt funding is available in plenty. We will also look at equity and internal accruals to finance the project," Raju explained.

The company is already understood to have sought a 2.4 mmscmd gas allocation for the expansion project by 2014-15 and has applied for the necessary approvals for the same. NFCL, the flagship of Nagarjuna group that was set up in 1986-87, manufactures and markets plant nutrients under the Nagarjuna brand.