Financial Daily from THE HINDU group of publications
Thursday, Nov 25, 2004
Agri-Biz & Commodities - Fertilisers
MFL to lease out biofertiliser units
Chennai , Nov. 24
MADRAS Fertilizers Ltd (MFL) hopes to exploit the assets and expertise available with it to add value.
According to the MFL Chairman and Managing Director, Mr Sukumar N. Oommen, the company plans to `outsource its facilities,' for better value generation.
The biofertiliser business is a demand-driven business, which MFL could not manage by itself. It plans to lease the production units to smaller players.
The company has also gained experience in water treatment technology. It is in discussion with a Dutch company for collaboration to provide technology and consultancy services for those needing effluent and sewage treatment facilities.
The Dutch company has set up a demonstration plant at MFL's factory site and discussions are in the preliminary stages, he said.
According to officials, MFL has biofertiliser production facilities at Chennai, Vijayawada and Bangalore. These are capable of producing the entire range of biofertilisers based on nitrogen fixing and phosphate solubilising bacteria.
MFL plans to hold on to its Bangalore unit and lease out the other two. The unit at Vijayawada was leased out recently to an individual entrepreneur, and it has called for bids for leasing out the Chennai facility.
In Chennai the unit is located within MFL's chemical fertiliser production facility. Therefore, apart from the deposit and rental, the entrepreneur can purchase steam, electricity and water from MFL. This unit has a capacity to produce 300 tonnes of biofertilisers a year.
The five-year lease for the Vijayawada unit, which has an annual production capacity of 200 tonne and is a stand alone unit, includes a Rs 50,000 deposit and a monthly rent of Rs 10,000, apart from a bank guarantee of Rs 5 lakh.
MFL has been able to keep the costs down at its Bangalore facility, which has a rated capacity 150 tonnes a year but is producing more than 300 tonnes. The product also has a wide market in the south, they said.
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