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Tata Chem scraps Gabon investment of R1,300 cr

Tata Group’s flagship fertiliser company Tata Chemicals has drawn the curtains on its R1,300 crore planned investment in Gabon to set up a urea plant in the African nation.

Tata Group’s flagship fertiliser company Tata Chemicals has drawn the curtains on its R1,300 crore planned investment in Gabon to set up a urea plant in the African nation.

This was the company’s maiden foreign investment in an upcoming urea facility and was earlier looked at as an opportunity which would enhance its urea capacity, which had stayed stagnant in India for the last few years.

However, on Friday, in a notice to the BSE, the company said Olam International, the lead company in the project, and Tata Chemicals have signed a termination agreement, wherein the latter will not proceed with its proposed 25.1% equity participation in the greenfield ammonia-urea fertiliser manufacturing project.

Under the agreement, which was signed in April 2011, Tata Chemicals had to invest R1,300 crore to pick up the said stake and would have an offtake agreement when the plant was expected to be ready by 2014.

While the Republic of Gabon, which holds 20% stake in the project, had promised the required land and 0.75 trillion cubic feet for 25 years, it was the price of gas which became the bone of contention, thereby delaying the project by three years. The port-based plant was proposed to have a capacity of 1.3 million tonne per annum.

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First published on: 29-03-2014 at 05:49 IST
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