Yara recently a competing fertiliser business in India. We look at what the expansion means for Yara
This well-operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system.
Yara International ASA has entered into an agreement to acquire xthe Tata Chemicals Ltd (TCL) Babrala urea plant and distribution business in India’s Uttar Pradesh State for USD 400 million.
“This acquisition represents another significant step in our growth strategy, creating an integrated position in the world’s second-largest fertiliser market. India has strong population growth and increasing living standards, and significant potential to improve agricultural productivity,” said Svein Tore Holsether, president and chief executive of Yara.
The plant has annual production of 700,000 tonnes of ammonia and 1.2 million tonnes of urea, and generated revenues and EBITDA of USD 350 million and USD 35 million respectively in the financial year ended 31 March 2016. The plant was commissioned in 1994 and is the most energy-efficient plant in India, with energy efficiency on a par with Yara’s best plants.
“We are impressed with the worldclass operations we have seen in Babrala. The workforce is committed to high HESQ standards, and has a solid safety track record. This well-operated plant and its highly skilled employees will make an excellent addition to Yara’s global production system,” said Holsether.
Yara in India – a young company with a long history. Yara has operated in India since the 1990s, focusing in recent years on premium product sales in the west and south of the country, delivering strong volume growth and margins well above Yara’s average for the region. We have partnered with some of the leading Indian fertiliser companies to provide high-quality products to Indian growers. However, to fully implement the Yara Crop Nutrition concept and to serve Indian farmers with the necessary quality, it was important to have a presence on the ground.
In 2011, Yara India was established with headquarters in Pune, Maharashtra. We now have a firm footprint in Maharashtra and work closely with fruit, vegetable and plantation crop growers
to improve their yields and profitability, all while safeguarding the environment. Yara India is growing steadily and has expanded its presence in southern and western India as well as Himachal Pradesh.
“In a market where we are competing with highly subsidised fertiliser inputs, it was important for us to demonstrate the value Yara Crop Nutrition can create. Every year we do over 500 demonstrations on farmers’ fields, supported with university trials.
Since inception, we have followed a very farmer-centric approach. The Yara Crop Nutrition concept combines our knowledge, diverse portfolio of differentiated and unique fertiliser products as well as our application competence to deliver value to growers,” said Sanjiv Kanwar, managing director of Yara India. “In 2015, in our area of operations we did close to 1,000 organised farmer meetings and contacted over 100,000 farmers through our various activities.”
Yara India maintains strong contacts with farmers through our extensive farmer training programmes, crop seminars, demonstrations and field days, and participation in local agriculture fairs and exhibitions. Today the Yara brand is synonymous with quality, trust and reliability, providing industry-shaping service to farmers.
In an era of globalisation, our well-informed Indian growers in crop segments like grapes, apples, coffee and sugarcane value Yara’s knowledge and expertise in these crops worldwide. Yara’s global experts have visited India and shared their knowledge and best practices regarding these crops. The most recent example was Danie van der Merwe from Yara South Africa visiting the Nashik grapes region. In 2016, Yara India also facilitated a black pepper study tour for Karnataka Planters’ Association members to Vietnam, a leading peppergrowing country.
Yara India has successfully integrated digital tools in its value offerings to growers. The company has digital apps like YaraCheckIT that enables growers to diagnose nutrient deficiencies in their crops. Yara is one of the leading agri-input companies in India in using social media like Facebook and WhatsApp to engage with growers and share knowledge. The Yara India Facebook page has over 25,000 growers representing a diverse range of crops and the number is increasing every day.
“This is an important forum to share knowledge and good agricultural practices and provides us a real-time interface with growers. It allows us to understand farmers’ needs better so that we can improve our solutions and offerings to farmers,” said Kanwar. “Our aspiration is to be the leading provider of sustainable crop nutrition solutions, supporting farmer profitability through knowledge, quality and productivity.”
“Our growth in India can be accelerated with this acquisition, creating a larger market footprint for Yara and enabling increased premium product sales in particular. We will place great emphasis on successful integration of the operations, and will put in place an integration team consisting of highly experienced TCL and Yara employees, the latter from both our existing India operations and our regional management,” said Terje Knutsen, senior vice-president and head of Yara Crop Nutrition.
The agreement will be subject to regulatory approvals and sanctioning by the relevant courts in India, a process that is expected to take nine to 12 months, after which closing of the transaction can take place.
PHOTO: YARA INDIA