Yara International, a Norwegian fertiliser conglomerate, brought Tata Chemical’s Babrala urea plant for Rs 2,682 crore, the first in the sector to do so. While Fertiliser Association of India is not very hopeful about the strictly controlled Indian fertilizer market of Rs 70,000 crore subsidy, Yara International is of the opinion that it is easy to fish in troubled waters. Global Head of Yara International, Svein Tore Holsether speaks to Prabodh Krishna about the first FDI in urea segment. Edited excerpts:
What will be your next step after the acquisition of Tata’s urea plant?
First, the target will be to stabilise our acquisition. Then, we will move forward with our strategy of delivering balanced nutrition and knowledge to the farmer. In the meantime, if any new opportunity comes by, we will go for it.
Could you elaborate your plans for the next decade in detail?
Yes, we will go step-by-step. This is a controlled sector and we need to learn from the turbulence in it. We do have a clear thought in mind that we have to deal in the second biggest market of the world. We have to become part of the system.
Did you choose to buy Tata’s urea unit because of their brand name?
Obviously, this is not the reason. We have had our presence in the Maharashtra and other parts of Southern India. We did not have the presence in North India. This is an entirely different geography. Having a production unit will give us access to the network. 'We have decades of experience in tailored solutions’ which will create our reach. Tata, yes it is a brand and it does have its own significance, but this plant was best in production. It was the right time and right choice.
Fertiliser Association of India has said that industry is on the going through a very troublesome phase. What is your opinion?
They must have said with their experience of the sector. It is a very tightly controlled sector to operate, which is true but there are always the chances to find growth.
You have manufacturing facilities all over Europe. How will you deploy your experience in an entirely different demography like India?
Well, we are a global brand. Definitely, we started with Norway. We have gradually developed to compete with the best in the world. We have our presence in Northern America, Southern America, Asia, and Africa. Brazil is our largest market, but you can’t ignore India. It is a growing market with growing needs. Statistically, it is the second largest fertiliser market in the world. Everyone is working for higher yields and we can provide tailored products for them. We are successfully selling into niche segment and it is a politically very stable region. We will definitely grow here. Tata Chemical’s operating philosophy has impressed me, we have got chance to buy this unit that can give us stability and base.
PM has focussed on traditional agriculture. Will it be easy for you to operate since you are dealing in chemical fertilisers only?
I am impressed with whatever PM Modi has said; he has also envisioned doubling farmers’ income. We can be helpful in that, there are many ways to go for it. Organic agriculture is also one of them but you need to improve yields and we have decades of experience in tailored solutions. We can really be very helpful.
Will you be concentrating on traditional NPK (percentage of available nitrogen (N), phosphate (P) and potassium (K) in fertilisers) or you will also diversify in bio-fertilisers?
We are certainly not going to stop here. Everyone in the globe is eyeing for a sustainable solution to maintain the nutrient value of soil. For the time being, we are offering only chemical fertilisers. Though, we have customised micronutrient enabled fertiliser solutions that we are offering to our farmers. It is directed towards sustainable farming. We are well beyond NPK, we have all sorts of micronutrients in all sorts of forms. Be it solid, liquid or that you can spread through the air.
How will you benefit from the ‘Make in India’ campaign? Will you approach the South Asian regional market with this campaign?
Yes, Make in India is another highly ambitious project. However, we work for the farmers’ better productivity and ultimately the end matters. We have a strong presence in Indonesia, Thailand, and China from around two-and-a-half decades. This entire region does not have Phosphorus and Potassium. And manufacturing it here will be tough. As we are a global group, it is better for us to make these substances where the raw materials are found than to bring it somewhere else and make it.