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Chinese company wants to build urea fertilizer factory |
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October 5, 2000
Dhaka (UNB) – In keeping with government’s quest for self-sufficiency in fertilizers, a Chinese company yesterday submitted a feasibility study report to the government for building a urea fertilizer factory in Sirajganj. On behalf of the Chinese government-nominated company China Huanqiu Chemical Engineering Corporation, Chinese Ambassador in Dhaka Hu Qianwen handed the report to Industries Minister Tofail Ahmed at a simple ceremony at the ministry. The report is as follow-up to a Memorandum of Understanding (MOU) signed between the two sides on June 28 this year when Home Minister Mohammad Nasim was present. “We are receiving the feasibility study to set up the factory for northern part of the country where consumption is maximum but reaching fertilizer costly,” Tofail told the function. He said the commercial offer would have to be submitted by the company after negotiations between the two sides. The government has a plan to go for production in the proposed factory by 2004, when the projected annual demand for Urea would rise to about 32,00,000 tons. The report estimated an investment outlay of US$353.44 million for setting up the plant with an annual production capacity of over 525,000 tons. The estimate included erected plant cost of US$331.66 million and an interest of US$21.78 million for the construction period. The Chinese company proposed 30 percent equity of US$106.04 million and 70 per cent debt by foreign loan of US$247.40 million. “A portion of the total cost should come as grant and the rest through Interest Subsidised Preferential (ISP) loan. It would be good for us,” said the Industries Minister. Chinese ISP loan meant for a long-term loan with lower interest rate. Against the backdrop of longstanding bilateral relations with China since 25 years back on this day China recognised Bangladesh, the minister said the new investment proposal would further promote the relations. He said another Chinese company would set up a Di-Ammonium Phosphate fertilizer factory in Chittagong. All formalities have already been done to set up the 240,000 ton-capacity factory at an estimated cost of US$73 million. Besides, China invested here a significant amount in supplier’s credits and trade relation between the two countries is also significant. China imported goods worth US$6.68 million from Bangladesh during July-March Period of 1999-2000 fiscal year against exports worth US$400.65 million to Bangladesh. Tofail said the government is planning to set up more fertilizer factories to meet the country’s future demand by utilising gas, the main raw material for Urea. “We don’t have any plan to export gas at this moment. We like to export value-added product like fertilizer,” he told the meet. Chinese Ambassador Qianwen said that the consultation of Chinese company would yield good results as the Chinese side is sincere about considering the financial difficulty of Bangladesh. The company is also one of the 225 reputed chemical companies in the world. “I’m sure our cooperation will be excellent. There will be no problem,” the envoy told the Bangladesh government side. Industries Secretary Al-Amin Chowdhury, BCIC chairman M Anwarul Huq, BCIC directors and officials concerned of the Chinese Embassy and company were present. Ministry sources said Bangladesh is likely to become a self-sufficient country in fertilizer by year 2004 with its present production plans. Besides proposed Sirajganj Urea factory and Chittagong DAP plant, Japan showed interest in setting up another DAP factory at Chittagong to produce 240,000 tons of fertilizer annually. US-Based ABCD Company also is interested to invest in the proposed Shahjalal Urea Fertilizer Factory at Sylhet to produce 500,000 tons annually, sources told UNB. Bangladesh produces 18,00,000 tons of fertilizers annually against current demand for 23,00,000 tons. |