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.

Norway-Asia Business Review - - Contents - MAHNAAZ KHAN

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.


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