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Pune based Deepak Fertilisers And Petrochemicals Corporation has signed a Memorandum of Understanding (MoU) to participate in a bidding process for a Phosphate project in Togo, West Africa as a part of a consortium comprising Baiamara Resources Limited (Balamara), a resources company, and phosphate producer company Minemakers Limited. Both the companies are Australian ASX listed.
However, when contacted, the company has denied to disclose any details in this regard, saying that its too early to comment on this issue.
According to company’s statement, DFPCL’s objective is to secure phosphoric acid supplies of the right quality required as a key raw material in the manufacture of phosphatic fertilisers. While Balamara will be responsible for the development of the mining business together with Minemaker's phosphate mining expertise, DFPCL will provide the downstream expertise in phosphoric acid.
The Togo Project is aimed at developing a world-scale deposit with over two billion tonnes of phosphate ore which has been extensively drilled and analysed. This makes it big enough to be able to satisfy the needs of all consortium partners for the end-product.
The bid is at an exploratory stage and prior to investment DFPCL will carry out detailed due diligence of financial viability and move forward decisively only when such analysis establishes returns not less than the threshold adopted by the Company for investing in assets of similar risk class.
However, DFPCL on Wednesday reported net profit of Rs 31.65, down by 36 per cent as compared to 49.65 crore, as on December 31, 2012. The total income of the company increased marginally by 4 per cent to Rs 623.35 crore in the third quarter this fiscal from Rs 601.49 crore in the same quarter of 2011-12 fiscal, it said in a BSE filing.
The company said its fertiliser sales were impacted due to lower consumption.
"Ammonia prices increased 26 per cent on a Y-on-Y basis during the quarter under review (Q3 FY13) compared to the previous corresponding quarter in FY 12 which had a consequent impact on margins in the downstream chemicals business. The Methanol plant also had to be shut down during the quarter under review due to high spot gas prices which rendered the product unviable”, company said in a statement.
Speaking about the company’s performance, Sailesh C. Mehta, CMD, DFPCL, said, “Overall industry fundamentals, across sectors like mining, in the last nine months have been subdued but this will change in the next few quarters as the Indian economy returns to higher growth levels. The basics of our business continue to remain strong. We continue to enjoy strong market shares and the demand fundamentals for our products will always have an upward trend. "
He added, "Mining, infrastructure and agriculture remain key factors in India’s growth story. Though some margin pressure, especially in the chemicals sector, may remain for another quarter or two, we are confident that our marketing strengths and our product quality will enable us gradually improve margins as we pass on raw material price increases.”