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Our Bureau

Chennai , Feb. 16

COROMANDEL Fertilisers of the Murugappa group has acquired a 2.5 per cent stake in Foskor Ltd of South Africa for a consideration of $6 million (Rs 27 crore).

Foskor Ltd is one of the largest producers of phosphoric acid in the world. It has a 5 per cent stake in Godavari Fertilisers, another Murugappa group company.

But the highlight of the Foskor-deal is that Coromandel could raise its stake to 16.5 per cent, without having to pay anything more. That is because of a `business assistance agreement', under which Coromandel will help Foskor's efficiency. A share of the savings will be given to Coromandel in the form of additional equity in the company.

Coromandel Fertilisers will buy the Foskor shares from the latter's holding company, Industrial Development Corporation (IDC) of South Africa.

Foskor's assets include phosphate rock mines in Phalaborwa and a 7,50,000-tonne-per-annum phosphoric acid plant at Richards Bay, South Africa. It also produces sulphuric acid.

According to Mr A. Vellayan, Chairman, Coromandel Fertilisers, the Murugappa group would need to import some 4,50,000 tonnes of phosphoric acid next year. This would be sourced equally from South Africa and a company in Tunisia. In addition, the group has facilities to produce another 2,00,000 tonnes of the acid a year.

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