Coromandel International has announced plans to acquire an additional 8.82% stake in Senegal-based BMCC, increasing its shareholding to 53.8%. The total investment includes a $3.84 million equity stake and a $6.5 million loan aimed at funding expansion and working capital needs. This strategic move enhances Coromandel’s capacity to secure rock phosphate for its fertilizer production, addressing India’s dependence on imports.
Coromandel International, a prominent player in the agro-chemicals sector, has announced its decision to acquire an additional 8.82% equity stake in Baobab Mining and Chemicals Corporation (BMCC), headquartered in Senegal, through its wholly-owned subsidiary. This acquisition will elevate Coromandel’s total shareholding in BMCC to 53.8%. The investment comprises $3.84 million (approximately Rs 32 crore) and a loan infusion of $6.5 million (around Rs 54 crore) aimed at supporting expansion projects and addressing working capital needs. With BMCC’s focus on processing rock phosphate, a vital raw material for producing Phosphoric Acid—essential for phosphatic fertilizer production—Coromandel’s investment is strategic. BMCC was established in 2011 and has secured a renewable exploitation permit for its phosphate ore processing. Coromandel initially acquired a 45% stake in BMCC in September 2022 and has been enhancing mining operations and commissioning a fixed processing plant to optimize rock production. Coromandel International’s Managing Director and CEO, S. Sankarasubramanian, articulated the importance of this investment, particularly in light of India’s heavy dependence on rock phosphate imports. He stated that securing sources for rock phosphate mining is pivotal for long-term supply stability in fertilizer production. The rock phosphate sourced from Senegal is being blended in Coromandel’s Visakhapatnam plant, ensuring operational versatility. Over the last two years, Coromandel has been implementing measures to maximize rock production at BMCC, which is expected to bolster the supply of rock phosphate for its upcoming Phosphoric Acid plant at Kakinada. Mr. Sankarasubramanian highlighted that the additional stake in BMCC is not only beneficial for securing value in the supply chain but also essential for enhancing self-sufficiency within Coromandel’s operations. The company, known for its crop protection products and specialty nutrients, operates 18 manufacturing facilities nationwide and reported a turnover of Rs 22,290 crores for the financial year 2023-24.
The acquisition of an increased stake in BMCC reflects Coromandel International’s strategy to strengthen its supply chain for phosphate fertilizers, addressing the crucial need for domestic rock phosphate sources in India. Given the country’s dependence on imports for these materials, investments in mining initiatives abroad aim to mitigate risks associated with supply disruptions and ensure a more stable production environment for fertilizers—a key component in agriculture.
Coromandel International’s acquisition of an additional stake in BMCC represents a significant step towards achieving greater self-sufficiency in its supply chain for phosphate fertilizers. The investment not only enhances the company’s operational capacity but also aligns with its strategic objective of securing vital resources necessary for sustainable agricultural practices in India. With strong management focuses on optimizing production processes, Coromandel is well-positioned to bolster its market competitiveness while supporting local agricultural needs.
Original Source: www.business-standard.com
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