The plant is expected to be completed in the next two years. The company has already raised Rs 930 crore debt and procured necessary equipment, besides completing the construction works.
The 5.20 lakh tonne ammonia plant will not only meet the key raw material need of the company but also have excess capacity for sale in open market.
Currently, the company imports about four lakh tonne of ammonia from West Asia. Ammonia is the key raw material across the company’s petrochemical and fertiliser businesses.
The company is also setting up 3.77 lakh tonne technical ammonium nitrate plant at Gopalpur in Odisha to tap both the growing demand in domestic and overseas market. The project is expected to be completed by March 2024.
Once the new ammonia plant starts production, the company will save about USD 75-80 a tonne in logistics cost alone and would replace import of ammonia completely.
The company has reduced net debt by 30 percent to Rs 1,826 crore as of March-end 2021 against Rs 2,665 crore in the same period in 2020, largely due to higher cash reserves and a substantial increase in value of investment in mutual funds.