Yara has announced that it has signed 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 the production and marketing of technical ammonium nitrate and specialty fertilisers.

Yara will own 49% of the planned joint venture, of which the 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, while Deepak is currently the only major domestic producer of TAN, with a current installed capacity of 140 kt. The remaining demand is met largely through imports.

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 fertiliser products.

“Our new partnership with Deepak is a strong fit between their strong position in TAN in India, which has the world's third-largest coal reserves, and Yara's proven strengths in safety, production, logistics and expertise in the use of TAN for explosives,” said Thorleif Enger, President and CEO of Yara International ASA.

“In addition, 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.