The government has revived plans to set up a fertilizer plant in Iran with an investment of about Rs 5,000 crore. The proposal is to set up a urea/ammonia JV Project with capacity to produce 1.3 MT Urea for import to India. However, the government has requested the Persian Gulf nation to offer long term gas contract for manufacturing the soil nutrient at feasible rates.
The government has nominated companies like Rashtriya Chemicals and Fertilizers (RCF), Gujarat Narmada Valley Fertilizers & Chemicals (GNFC) and Gujarat State Fertilizers Corporation (GSFC) for the proposed 1.3 million tonne urea joint venture plant. These Indian companies’ have appointed SBI Capital to identify the Iranian partners for the Joint Venture Project.
Notably, both the nations have been in discussions for setting up of a fertilizer plant in the Persian Gulf nation since 2013, but talks failed to fructify stuck over gas price issue. However, India has revived its plans after Iranian authorities approached the government officials and expressed willingness to partner with them in this project.
The proposed urea joint venture plant in Iran would be on the similar lines of OMIFCO (Oman India Fertiliser Company) in Oman, where the Indian entities have jointly invested in urea manufacturing with local player. The Indian government has a long term off-take arrangement with OMIFCO for sourcing urea, which is produced at lower rates compared to domestic cost of production.