One per cent of production profit to support social projects in Oman
SUR -- Oman-India Fertiliser Company (Omifco) celebrated the inauguration of its plant at the Sur Industrial Estate under the auspicies of Ahmed bin Abdulnabi Macki, Minister of National Economy and Deputy Chairman of the Council of Financial Affairs and Energy Resources, yesterday. With an estimated cost of around $1bn, the plant covers an area of 175 hectares, and is constructed to include all basic utilities and off-site facilities such as product storage, power generation, seawater cooling and a jetty.
The project will produce 1.65 million tonnes of granulated urea and 0.24 million tonnes of surplus ammonia annually, with the entire production to be exported in bulk to India by sea. Fifty per cent of the project is owned by Oman Oil Company while KRIBHCO and IFFCO, two Indian co-operative sector fertliser giants, equally hold the remaining 50 per cent. In his opening speech, Maqbool bin Ali Sultan, Minister of Commerce and Industry, said that Omifco project is a landmark in the historically close relationship and long-established trading ties between Oman and India.
"This ambitious joint venture came into being upon the directives from His Majesty Sultan Qaboos during his first state visit to India in 1997. For Oman, it has been the first large scale, high technology, state-of-the-art, gas-based and chemical manufacturing facility in the country. As such it has been a product of Oman's vision 2020 programme to bring about diversification of the economy from dependence on crude oil production revenues," he said.
"For India, it has been the largest ever cross-border joint venture investment aimed at ensuring a long-term supply of competitivelry priced nitrogenous fertilizer based on natural gas feed stock to the Indian agricultural market for food production. "In spite of the challenges the project faced, it became the first green field project to test the international syndicated loan market post-September 11, 2001 and the first commercially syndicated financing of a cross-border project involving India."
Ram Vilas Paswan, Indian Minister of Chemicals, Fertilizers and Steal, praised the efforts of the two countries to establish this large-scale project. "Celebrating the inauguration of this great venture coincides with the golden jubilee of the historical diplomatic relationship between Oman and India and this project will definitely assist the two countries' economies," he said.
"I should point to the letter sent by the prime minister of India praising the project in which he regarded this step as a major milestone in enforcing the ties between our two countries. We wish this project success and look forward to continuous co-operation between Oman and India in all fields to bring further prosperity and development to our nations." Macki and the accompanying dignitaries unveiled a plaque and took a tour of the plant where they familiarised themselves with the stages of production and met the company staff.
It's notable to say that Oman is supplying natural gas feedstock at a fixed price for 10 years. The Government of India will off-take all the urea production for 15 years at pre-determined prices, which are set to meet the project's debt service requirements and the desired return on equity to the sponsor companies. The Indian Fertiliser Company (IFCO) is buying the surplus ammonia at a fixed price for the next 10 years.
Due to the scale of the project and its importance in assisting the economy of the Sultanate, the company's board of directors has also announced that 1 per cent of the total production profit will go to a fund dedicated to social development support in the country. Present at the inauguration ceremony were Jumaa bin Ali Al Jumaa, Minister of Manpower, Mohammed bin Al Zubair, His Majesty's Adviser for Economic Planning Affairs, Dr Rajha bint Abdulameer bin Ali, Minister of Tourism, under-secretaries as well as a number of CEOs of private sector companies, dignitaries and company staff.
By Khalid al Jadidi
© Oman Daily Observer 2006
