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Published 7th February 2008

Yara signs for a JV with Deepak Fertilisers in India

Yara has signed early February a Heads of Agreement with Deepak Fertilisers and Petrochemicals Limited (DFPCL) based in Pune, India with the intention of establishing a joint venture company for production and marketing of technical ammonium nitrate and specialty fertilizers. Yara will own 49% of the planned joint venture.

The JV's objective is to develop the technical ammonium nitrate market (TAN) in India. The JV will include the 300,000 MT per annum TAN plant under construction at Paradip in Orissa on the east coast of India. Indian TAN consumption is approximately 400 kt per year and is growing at about 5-6% per annum, driven by strong coal demand for power generation. Deepak is the only major domestic producer of TAN, with a current installed capacity of 140 kt.

The joint venture will also review opportunities for production and marketing of specialty fertilisers in the states of Maharashtra and Gujarat, where DFPCL has considerable strengths. The state of Maharashtra is India's largest fruit and vegetable producing region and is the most attractive market for a wide range of specialty fertilizer products.

Says Thorleif Enger, President and CEO of Yara International ASA, "This partnership will complement Yara's leading global position within specialty fertilisers with Deepak's strong local market position and knowledge in India's most attractive growing region for fruit and vegetables".

The heads of agreement will be converted into a final agreement after a due diligence and the necessary company and regulatory approvals.DFPCL is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India (NSE) with a market capitalization of approximately USD 250 million.