Kafco Managing Director Peter A May, in an interview with a selective group of journalists at his Dhaka office yesterday, revealed the company's investment plan for the second unit with a capacity of producing 2,500 tonnes of fertilizer a day.

He said Kafco emerged as the highest profit earning corporate venture in Bangladesh within a short span of time since its establishment.

"We have met with the Board of Investment (BoI) executive chairman and informally discussed the investment plan with him," May said.

He said the government will be happy because the country needs more fertilizer.

"There is certainly a shortage of urea in Bangladesh and the demand is growing. The national annual demand for fertilizer is growing at a five to six percent rate."

Kafco has a fully established infrastructure enabling it to expand with shorter implementation time than other investors, he added.

The company started its operation in 1995, with a plant which has the capacity of producing about 1,700 tonnes of urea and 1,500 tonnes of ammonia a day, in a joint venture with the Government of Bangladesh and companies of Japan, Denmark and the Netherlands.

Kafco paid $50.3 million to the government as gas price in the fiscal 2004-05 in an average rate of $2.34 for a thousand cubic feet of gas.

It made a net profit worth $63.6 million in the fiscal 2004-05, which is a record among the Bangladeshi corporate houses, May claimed saying that the company paid off all its debts this month.

Kafco also paid $10 million dividend to its shareholders in February, 43 percent of which went to the government exchequer.

"Kafco successfully paid off its debts and offered dividends to its shareholders due to a rise in fertilizer prices across the world," May said adding, "The average fertilizer price was $70 per tonne a few years back which now rose to $230 per tonne in the international market."

The top executive of Kafco said the company paid $25 million in forms of taxes and duties and injected another $70 million into the economy of Bangladesh in forms of wages, services and contracts.

Asked about raising fund from the local capital market, May said the company has a plan to do that in future.

"The issue has been discussed in the last board meeting," he said adding that Bangladeshi capital market is developing day by day and it needs more shares from good companies.

Kafco produced 685,214 tonnes of urea and 549,973 tonnes of ammonia in 2004-05 fiscal, about half of which were supplied to the Bangladesh government under an export formula.

The company also sells fertilizer to Australia, Thailand, Vietnam, Pakistan and India.