A subsidiary of Indian-owned Indorama Corporation, the world's largest producer of polyester and PET resin, will set up a $1.2 billion fertilizer plant in Nigeria - which will also be the single largest urea manufacturing complex in the world.
Indorama Eleme Fertilizer and Chemicals Limited, Nigeria (IEFCL), has signed long-term financing agreements of $800 million with 16 global developmental financial institutions and commercial banks to construct the greenfield plant in Port Harcourt company officials said here.
"The state-of-the-art manufacturing complex will produce 1.4 million tonnes per annum of granulated urea using natural gas as feedstock, from early 2016," Indorama group managing director Amit Lohia told IANS.
"This project envisages setting up the single largest urea manufacturing train in the world, making this one of the lowest cost producers in the world, which will also enable it to export urea to North American and Latin American markets," he added.
Singapore-headquartered Indorama Corporation, the holding company of the Indorama group, has 45 manufacturing sites across 20 countries around the world. It is also the second largest producer of nitrile rubber gloves. The $10 billion Indorama Corporation is owned by an Indian family, with industrialist S.P. Lohia as its chairman.
IEFCL, which is west Africa's largest polyolefins producer, is providing equity of $400 million for the project.
Leaders for the $800 million funding include the International Financial Corporation (IFC), a part of the World Bank group, which has raised parallel loans from investment companies in Britain, Belgium, Germany and the Netherlands. This includes a syndicated loan of $75 million from the Bank of India.
"The IEFCL project will play a large role in addressing critical Nigerian and West African requirements for economically priced fertilizer. IEFCL will substitute fertilizer imports to address Nigeria and West Africa's growing demand for fertilizer by utilizing Nigeria's vast hydrocarbon reserves," Indorama group chairman S.P. Lohia said.
"We continue to see significant growth prospects in Africa and the Middle East. After investing more than $500 million over the past several years in Nigeria, Indorama is setting the foundation to create Africa's largest petrochemical hub in the country. IEFCL, through this project, will play a key role in boosting Nigeria's crop yields. In addition, Indorama has a rich pipeline of petrochemical projects globally to further build on its global petrochemical presence," Amit LOhia added.
Group CFO V.S. Baldwa said that besides IFC, other financial institutions in the project include Stanbic Bank, Nigeria, Standard Chartered Bank, African Development Bank, African Export-Import Bank, DEG (Germany), European Financing Partners, CDC Group (Britain), FMO (the Netherlands), Belgian Investment Company for Developing Countries Emerging Africa Infrastructure Fund and Nigerian commercial banks.
Indorama Corporation, which has over 20,000 employees, started with the establishment of a spun yarn manufacturing plant in Indonesia by S.P. Lohia in 1976. The group is a global manufacturer of polyethylene, polypropylene, polyester fibre, filament and spun yarns, fabrics, and medical gloves. Its products are shipped to over 90 countries across four continents.
(Jaideep Sarin can be contacted at email@example.com)