Yara International ASA (Yara), the world’s leading supplier of mineral fertilizers, announced the successful completion of its acquisition of the Tata Chemicals’ urea business on Friday. The deal was struck at Rs 2682 crore including transfer of all assets and liabilities.
The acquisition of Tata’s Babrala plant in Uttar Pradesh is the first foreign direct investment in the highly regulated urea sector.
Nearly a half of Norway headquartered fertilizer titan’s top honchos have descended in Delhi to herald what it’s Indian CEO Narsimha Rao said “beginning of a new era for Indian farmers”. Yara’s earlier attempt to enter Indian market through Kribhco had failed as cases of bribing the Ministry officials had hogged the headlines.
The press conference which was held in the upscale Hotel Tajman Singh also featured short films which depicted Yara impacting the lives of Indian farmers. Mostly active in premium brands so far Yara is held as a leader when it comes to apple growing, grape cultivation or banana.
The Babrala entry into the Indian market – however, brings the Norwegian company face to face with Indian players such as IFFCO and Kribhco, among others. Allaying the fear Yara’s President and CEO Svein Tore Holsether says “we believe in working together as India is a vast market.”
The press release mailed by Yara reads “We are pleased to announce the completion of the acquisition of the Tata Chemicals’ urea business. It represents a major step forward for us, as we deepen our footprint in the world’s second largest fertilizer market”, said Svein Tore Holsether.
“With this acquisition, Yara gains a significant position in the Northern region, with access to a strong network of 650-700 dealers. It will enable the company to provide enhanced crop nutrition solutions to farmers in North India which has 31 million hectares (Ha) of grain and 4 million Ha of horticulture crops. Yara’s turnover which is currently around USD 40 Mn in India will increase to USD 350 Mn”, read the press release.
Yara has operations in 60 countries and sales to 160 countries worldwide. “Our experience has shown that working closely with the Indian farmer to ensure that the benefits of balanced crop nutrition are clearly demonstrated, has helped growers to improve their yields and increase their profitability,” said Terje Knutsen, EVP Crop Nutrition.
Yara claims that the Babrala plant is the most energy efficient plant in India and the urea produced is allocated for the states of Uttar Pradesh, Uttarakhand, Bihar, West Bengal, Punjab and Haryana. It will be marketed under Yara’s global brand name for premium urea products – YaraVera.
Expressing views on the occasion, Mr. Narasimha Rao, CEO and President, Yara India said, “Prime Minister Narendra Modi has announced an impressive target of doubling farmer’s income by 2022 and Yara is committed to support this mission.