Chennai: Archean group, a Chennai-based conglomerate with interests in minerals, industrial chemicals and shipping, plans to complete its Rs1,200 crore Gujarat plant—the largest in the country to manufacture fertilizer input sulfate of potash—by 2012.
It is also likely to take its shipping business public.
“We may take the shipping company public when the market improves,” S.M. Sundaram, Archean’s chief financial officer, said.
The family-run group, which claims to be the second largest landowner in Gujarat, will complete the 300,000 tonne capacity fertilizer input unit by 2012. Every year, Indian fertilizer companies import an estimated 3.3 million tonnes (mt) of potassium-based inputs.
“India has no captive production of potassium and India has to import all of its requirements,” said Satish Mishra, an analyst with PINC Research.
He added that the government had decreased prices of potassium-based fertilizers last year by around 25% to encourage its use.
While potassium chloride is a more commonly used plant nutrient, usage of sulfate of potash, touted to be good for crops such as tobacco and coffee, is gradually increasing, Mishra said.
The first phase of Archean group’s sulfate of potash plant, producing around 100,000 tonne and spread over 60,000 acres, will be finished close to the end of 2010 at a cost of Rs600 crore.
The second and final phase, with an investment of another Rs600 crore, will be completed by mid 2012 and will cover an extra 40,000 acres.
Archean group, established in 1984, has seen revenue for its India business at least double to Rs850 crore in 2008 from Rs400 crore five years ago. Including revenues from a recent acquisition in West African country Senegal and other overseas businesses, its sales in 2008 stood at Rs3,000 crore.
Profits for its India-based businesses during the same five-year period have quadrupled to Rs125 crore from Rs35 crore.
The group’s first venture in the 1980s was in granite sales via its unit Archean Granites Pvt. Ltd. It later got into iron ore with its core minerals unit and then entered industrial salt business by setting up Jakhau Salt Co. Pvt. Ltd.
The company’s newest venture, its shipping business, Goodearth Maritime Ltd, contributed almost half of its India profits in 2008. In 2004-05, it placed an order with Visakhapatnam-based shipbuilders Hindustan Shipyard Ltd for 10 ships worth at least Rs1,200 crore.
Archean group has received four of the 10 ships ordered. But profits for the group’s logistics and dry-bulk carrier business, Goodearth Maritime, were cut to half last year amid the global economic downturn.