In one of its massive expansion plans, city-based urea producer Nagarjuna Fertilizers and Chemicals Ltd (NFCL) on Friday said that it will invest Rs 4,500 crore to set up its third plant at Kakinada in Andhra Pradesh.
The proposed plant will enhance the company’s urea production by 1.3 million tonnes, taking the total production capacity to 2.9 million tonnes by December, 2015.
“The estimated cost of expansion is about Rs 4,500 crore, which will financed through an appropriate mix of debt and equity. The brownfield expansion is an addition to NFCL’s existing capacity of about 1.6 million tonnes per annum,” the company said in a statement adding that the proposed increased quantity is already being marketed by the company through imports.
According to the company, all key project approvals, such as environmental clearance, allocation of water and contracts for natural gas are already in place.
The company has awarded early work order to Technimont of Italy as a part of the engineering, procurement and construction (EPC) contract.
NFCL claimed that it was the first project to be taken up for expansion after the Union government announced its policy on fertilizers. The policy provides floor and ceiling price mechanism with an assured return of 12% to 20% on equity. There is a new LNG terminal proposed at Kakinada Port and NFCL would be able to utilize the LNG through this terminal.
NFCL commissioned its first plant in 1991 and the capacity was doubled through commissioning of its second plant in 1997. Both plants were revamped in 2007 resulting in an increase in production capacity.