Mumbai: India’s largest public sector fertilizer company by revenue, Rashtriya Chemicals and Fertilizers Ltd, or RCF, plans to develop up to 100 acres of surplus land in Mumbai to set up the country’s first chemical commodity exchange, a hydrogen plant and a chemical industrial park, said a person familiar with the development.
Investment in the project, for which RCF is preparing a master plan, is estimated to be more than Rs2,000 crore, with RCF contributing the land and raw material, the person said.
The hydrogen plant is to be developed in a joint venture with a German multinational, while the industrial park will house at least 50 chemical units, and the chemical commodity exchange, he added. The plan also includes a greenhouse to grow fruits and flowers.
RCF, which holds more than 800 acres of land in Trombay along the Eastern Express Highway in Mumbai, is expected to sign the joint venture agreement for the hydrogen plant in a month. The fertilizer company has already used about 500 acres of land for existing production units and for a residential development for its employees.
The German company, which has one of the world’s most advanced hydrogen plant technology, has been scouting for a suitable location in India to set up a large-capacity plant.The German company’s name cannot be revealed because of a confidentiality clause, the same person said.
RCF’s contribution to the Rs600 crore hydrogen plant project will be land and regular supply of gas, said the person. The fertilizer company is expected to shortly hire a consultant to advise it on the chemical industry park and the chemical commodity exchange.
The market value of RCF’s surplus land is estimated at about Rs2,000 per sq. m, according to Pranay Vakil, a Mumbai-based real estate consultant.
The valuation, much lower than the Rs86,000 per sq. m price commanded by residential plots in the same area, is mainly due to its industrial land status and restrictions related to land procurement set by the government when the company was established.
RCF chairman U.S. Jha said the company’s land, which was procured by the Centre for the specific purpose of establishing chemical and fertilizer plants, cannot be used for unrelated projects. “We would utilize the land only for value-added products and services projects within the ambit of the specified area, that is chemicals and fertilizers.”
As part of land development and diversification, RCF has already worked out a plan to set up a rapid-wall production unit in a portion of the surplus area, using a by-product from its Trombay fertilizer plant.
Rapid wall, a new concept widely applied in construction, is a glass fibre reinforced wall panel. RCF recently engaged Australia’s Rapidwall Building Systems Pty to provide the technology for setting up a manufacturing facility for the product.