Durban - Foskor, the phosphate rock mining subsidiary of the Industrial Development Corporation (IDC), was scouting around Asia with a view to investing in a downstream granular fertiliser plant, Piet Greyling, the managing director, said yesterday.
India had become a major focus point and the group was eyeing joint ventures there. Foskor's investment was likely to exceed R200 million, Greyling said.
It would help secure additional demand for phosphoric acid from Indian Ocean Fertiliser (IOF), the Foskor subsidiary based in Richards Bay.
"We have to expand markets and secure supply lines for the excess tonnage we are creating," he said, referring to the R1,5 billion expansion at the IOF plant that is set to increase production of phosphoric acid by more than 80 percent, from 450 000 tons to 780 000 tons a year.
Foskor, the world's third-largest producer of merchant grade phosphoric acid, commands 8 percent of the global market. After the expansion, market share is expected to grow to 12 percent.
Yekani Tenza, Foskor's chief financial officer, said gaining a foothold in Asia would provide a springboard to supply the rest of the continent. "The advantage of this is we could look into countries like Korea. It could certainly give us a clear stronghold," he said.
Asia has no naturally occurring supply of phosphate rock, which is added to sulphur to create phosphoric acid. IOF sources its raw materials from Foskor's Phalaborwa mine.
The group is on track to commission the expanded facilities at Richards Bay in the first quarter of next year. The expansion has been funded by the IDC, foreign institutional investors and internally generated cash flows.
The additional output of phosphoric acid will be exported, which will account for 90 percent of IOF's projected yearly turnover of R1,8 billion. Exports are currently 80 percent of turnover.