Coromandel International Limited is set to acquire 45% equity stake in Baobab Mining and Chemicals Corporation (BMCC), a rock phosphate mining company based in Senegal, Africa at an outlay of US$ 19.6 million, besides loan infusion into BMCC of a further US$ 9.7 million .
The acquisition is happening through its wholly owned subsidiary Parry Chemicals Ltd. The transaction is expected to be completed in the second quarter of FY 2022-23 and is subject to satisfactory completion of conditions precedent as contained in the Agreements.
Coromandel International is India’s leading agri input solution provider and is in the business of Fertilisers, Crop Protection, Bio Products, Speciality Nutrients, Organic Fertilisers and Retail. It is the largest private phosphatic fertilizer manufacturer and marketer in India and has been a trusted partner for farmers over the years.
It operates 3 fertiliser units for manufacturing ~3 million ton of phosphatic fertilisers. Rock Phosphate is a key raw material for manufacturing Phosphoric acid, an intermediate used for Phosphatic fertiliser production. Coromandel has strategic tie up with leading integrated players like Tifert (Tunisia) and Foskor (South Africa) for meeting its Phosphoric acid requirements.
Further, it has been augmenting its captive phosphoric acid production at Vizag plant and is sourcing rock from various countries. As part of its strategy to strengthen the value chain, Coromandel has been evaluating opportunities in the Phosphate mining to secure its rock phosphate needs.
Towards this, Coromandel’s Board has approved buyout of equity of 45% in BMCC. BMCC is in the business of mining, production, and sale of Rock Phosphate. BMCC has since stabilized its operations and commenced active production from 2021.
This investment will help in strengthening Coromandel’s backward integration and will ensure long term supply security of the key raw material. At full capacity, BMCC can meet upto one-third of the Company’s rock phosphate requirement.