Saroj Poddar-led Zuari Fertilizers and Chemicals, which is in the race to gain control of Mangalore Chemicals and Fertilizers (MCF), has pulled out of a proposal to build a R5,000-crore urea plant in Karnataka, citing problems with acquisition of land.
Zuari Fertilizers had planned to set up a 1.3-million-tonne-per-annum urea manufacturing plant in Mastihole village in Karnataka’s northern district of Belgaum, which borders Goa. The project, envisaged in 2010, had planned to use gas supplied through the the Dabhol-Bangalore natural gas pipeline, which was completed earlier this year. Zuari’s plan was to commission the urea plant by 2015-16.
?It was the land problem that affected the project,? said a company official. ?This is not a new development,? he told FE, adding that the decision to shelve the project took place sometime back. Last year, the group’s annual report for FY12 had said that Zuari Fertilisers was in the process of acquiring land and obtaining environment clearances for its proposed plant at Belgaum in Karnataka and that it would be getting the gas from Petronet LNG’s Dahej terminal.
The company’s other investment proposals in Karnataka include building a phosphate plant near Karwar. This project was part of a long-term company strategy and nothing has moved yet on the plant, the company official said.
Zuari, part of Adventz Group, is currently in the middle of a three-way battle for control of the Vijay Mallya-led MCF after it increased its stake in the fertilizer company two weeks ago. Zuari, which had acquired 10% stake in the R2,780-crore MCF in April, now holds 16.43% of the company. Its purchase of additional stake came after Pune-based Deepak Fertilizers bought 24.46% in MCF on July 3.
Adventz Group Chairman Saroj Poddar has said that he is waiting for Mallya’s decision on selling the company. Mallya’s stake in MCF has been declining since April, when creditors started invoking pledges made on the shares. As of last week, Mallya’s stake in the fertilizer company was around 20.26% held through entities such as United Breweries Holdings, United Spirits, McDowells Holdings and Kingfisher Finvest.
