Due to constraints in the availability of gas, which is the preferred feedstock for production of nitrogenous fertilizers, and the near total dependence of the country on imported raw materials for production of Phosphatic fertilizers, the Government has been encouraging Indian companies to establish joint venture production facilities, with buy back arrangement, in other countries, which have rich reserves of natural gas and rock phosphate.
The following are five such joint ventures already established abroad:- Oman India Fertilizer Project: A Memorandum of Understanding was signed on 30.7.94 between the Government of India and the Government of Sultanate of Oman, Expressing interest in sponsoring the design, construction, financing and operation of a world scale fertilizer complex in Oman. The Joint Venture Agreement of the project was signed in April 1997. The project wherein the investment of US $160 million as equity by IFFCO and KRIBHCO from the Indian side, provides for a buy back arrangement for 16.52 lakh tonnes of urea produced by the project by the Government at a Long Term Fixed Price for a period of 15 years. The major agreements relating to the project were finalized and signed by the parties to the agreements in May-July, 2002. The Urea Off Take Agreement (UOTA) was finalized and signed by the Parties 29-05-2002. The project has been completed and OMIFCO plant commenced production in May 2005. During 2005-06, a quantity of 13.25 lakh mts. arrived at Indian ports in 47 handy max vessels for handling by IFFCO and KRIBHCO respectively. During 2006-07,a quantity of 7.61 lakh mts. arrived in 27 vessels for handling by IFFCO and KRIBHCO in east and west coast ports of India. At present, average production of OMIFCO plant is 5500 mts. per day with regular off take of cargo to India from Sur jetty having mechanized loading arrangement. A brief tabulated detail of OMIFCO Project is illustrated below:-
| CAPITAL COST(ESTIMATED) | US $969 MILLION |
| DEBT –EQUITY RATIO | 67:33 |
| DEBT | US $649 MILLION |
| EQUITY | US $320 MILLION |
| PROJECT SPONSORS | IFFCO, KRIBHCO, & OMANOIL &CO. |
| EQUITY CONTRIBUTION | 25% IFFCO,25% KRIBHCO &50% OMANOIL &CO |
| INDIAN EQUITY CONTRIBUTION | US $160MILLION |
| ANNUAL PRODUCTION CAPACITY | 16.52 LAKH TONNE UREA 2.48 LAKH TONNE MERCHANT AMMONIA |
| EPC CONTRACTOR | SNAMPROGETI– TECHNIP |
| PROJECT COMMENCEMENT | 15-08-2002 |
| PROJECT COMPLETION | 15.07.2005(35 MONTHS FROM COMMENCEMENT) |
| FEEDSTOCK | NATURAL GAS@ US 0.77 MMBTU TO BE SUPPLIED BY OMAN OIL COMPANY FOR 10 YEARS |
| FINANCING | BY A CONSORTIUM OF INTERNATIONAL BANKS |
| Trial Production started on | 28-03-2005 (ammonia) 12-04-2005 (Urea) |
| Commercial Production started on | 14-07-2005 |
| Total granular Urea imported till 25-01-2006 | 11.027 lakh MT |
| Rate of Urea for trial production stage | $115 PMT |
| Rate of urea for commercial Production stage | |
| For 1st Year | $150 PMT |
| For 2nd Year | $140 PMT |
| For 3rd Year | $133 PMT |
| For 4th Year | $133 PMT |
| For 5th Year< | $131 PMT |
| For 6th Year | $130 PMT |
| For 7th Year | $130 PMT |
| For 8th Year | $130 PMT |
| For 9th Year | $104 PMT |
| For 10th Year | $90 PMT |
| For 11th Year | $80 PMT |
| For 12th Year | $84.80 PMT |
| For 13th Year | $90 PMT |
| For 14th Year | $89 PMT |
| For 15th Year | $90.8 PMT |
SPIC's Dubai Fertilizer Project: SPIC has set up a gas-based nitrogenous fertilizer plant at Dubai in United Arab Emirates to produce 4.00 lakh MT of urea at an estimated coast of US $170 million. The project was commissioned during 2004. At present, the plant is not functioning since the tie up for gas for running the plant from outside Dubai is being finalized.
Joint Venture in Senegal: The Government of India, Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) and Southern Petro-chemicals industries Corporation Ltd. (SPIC), are equity partners and are collectively holding 25.57% of the share in the joint venture company in Senegal named ‘Industries Chimiques du Senegal’ (ICS). In 1996, compagnie Senegalaise Phosphats de Taiba (CSPT), am mining company which supplied rock phosphate to ICS, has been merged with ICS. The company produces phosphoric acid and finished Phosphatic fertilizers in its plants located in Darou and M’Bao in Senegal. It started production in 1984 and after debottle-necking, attained an installed capacity of 3.5 lakh MT of phosphoric acid per annum. In February 2002, ICS has commissioned a project for doubling production capacity of its phosphoric acid plants and development of rock phosphate mines at a cost of about US $250 million. IFFCO has entered into a buy back agreement with ICS with a quantity rebate ranging from 1% to 2 %. During the year 2001, ICS produced 3.59 lakh MT of phosphoric acid in terms of P2O5 from ICS with a quantity rebate ranging from 1% to 2%. During the year 2005-06 ICS produced 3.84 lakh MT of phosphoric acid in terms of P2O5.
Joint Venture in Jordon: A joint venture project in Jordan to produce 2.24 lakh MT of phosphoric acid per annum jointly implemented by SPIC and Jordan Phosphate Mines Company Limited is under production since May 1997. During the year 2005-06, the company produced 1.95 lakh MT of phosphoric acid.
Joint Venture in Morocco: A Joint venture between Office Cherifien Des Phosphates (OCP), Morocco and Chambal Fertilizers & Chemicals Ltd. (CFCL) to produce 3.30 lakh tonnes of phosphoric acid at a cost of US $205 million had been commissioned In Morocco in October 1999. The equity in the venture of US $65 million is held by OCP and CFCL equally. The project is under operation since October 1999.