CAPACITY
BUILD-UP
4.1.1
At present, there are 63 large size
fertilizer units in the country,
manufacturing a wide range of nitrogenous
and phosphatic/complex fertilizers.
Of these, 38 units produce urea
whereas 9 units produce ammonium
sulphate as a by-product. Besides,
there are about 79 small and medium
scale units producing single superphosphate.
The total installed capacity of
fertilizer production in the country
which was 104.98 lakh tonnes of
nitrogen and 29.51 lakh tonnes of
phosphate as on 1.4.98 has risen
to 105.20 lakh tonnes of nitrogen
and 31.70 lakh tonnes of phosphate
as on 30.11.98.
PRODUCTION
4.2.1
The production of nitrogenous fertilizers
during 1997-98 was 100.86 lakh tonnes
of nitrogen and that of phosphatic
fertilizers 29.76 lakh tonnes of
phosphate. The production target
for 1998-99 was fixed at 106.82
lakh tonnes of nitrogen and 30.27
lakh tonnes of phosphate, representing
a growth rate of 5.9% in nitrogen
and 1.7% in phosphate, as compared
to the actual production in 1997-98.
As against this, the actual production
upto November 1998 was at 68.45
lakh tonnes of nitrogen and 19.76
lakh tonnes of phosphate. Taking
‘N’ &’P’
together, there was an overall growth
of 4.6% over the production of during
the corresponding period of last
year.
4.2.2
The production performance of both
nitrogenous and phosphatic fertilizers
during Kharif 1998 was less than
the target due to the following
reasons:
i)
There was a shortfall in production
in all the plants of HBJ pipeline
including KRIBHCO-Hazira due to
curtailment of natural gas from
ONGC for the period from 17th
to 23rd September 1998 in view
of floods in Hazira.
ii)
Power and equipment problems,
shortage of raw material and labour
problem affected production in
many of the plants including two
sick companies viz. Fertilizer
Corporation of India Limited and
Hindustan Fertilizer Corporation
Limited
iii)
There was a shortage in production
of complex fertilizers mainly
due to the lower level of imports
of Muriate of Potash. The situation
is expected to improve in Rabi.
CAPACITY
UTILISATION
4.3.1
The domestic fertilizer industry
has attained levels of capacity
utilisation which compare favourably
with the best in the world. The
capacity utilisation was an all
time high in 1997-98 at 101.5% for
nitrogen and 101.7% for phosphate.
The capacity utilisation is estimated
at 99.4% for nitrogen and 94.7%
for phosphate during 1998-99.
4.3.2
The capacity utilisation of the
fertilizer industry is expected
to improve as more and more modern
plants based on proven technology
and equipment go on stream. The
existing plants are being encouraged
to improve their capacity utilisation
through revamping and modernisation
and incorporation of dual fuel/feedstock
facilities, wherever feasible.
4.3.3
The unit-wise details of production
and capacity utilisation during
1997-98 and 1998-99 (estimated)
are given in Annexure-III.
STRATEGY
OF GROWTH
4.4.1
The fertilizer industry has adopted
the following strategy to increase
fertilizer production:
i)
Expansion/retrofitting/revamping
of existing fertilizer plants;
ii)
Overcoming the constraints in
the availability of natural gas
by setting up naphtha-based expansion
projects and installing dual fuel/feedstock
facilities in the existing plants
and projects under implementation;
and
iii)
Setting up joint venture projects
in countries having abundant and
cheap raw material resources.
PROJECTS
UNDER IMPLEMENTATION
4.5.1
Six major fertilizer projects involving
an estimated capital cost of Rs.4122.02
crore are under implementation in
the country. When commissioned,
these are expected to add additional
capacities of 9.75 lakh MTPA of
urea, 7.90 lakh MTPA of NPK, 23.07
lakh MTPA of DAP and 1.00 lakh MTPA
of NP fertilizers. The details of
these projects are given below:
i)
IFFCO are currently implementing
a project to set up two additional
trains for manufacturing DAP/NPK
fertilizers adjacent to their
existing plants at Kandla in Gujarat
to produce an additional 2.27
lakh MTPA of DAP and 3.70 lakh
MTPA of NPK fertilizers at an
estimated cost of Rs.212.20 crore.
The project is expected to be
commissioned by October 1999.
ii)
Chambal Fertilisers and Chemicals
Ltd. (CFCL) are implementing a
project for expanding the capacity
of their existing plant at Gadepan,
Distt. Kota, Rajasthan by an additional
capacity of 7.75 lakh MTPA of
urea at an estimated capital cost
of Rs.1256 crore. This project
is expected to be commissioned
by 31.12.99.
iii)
Oswal Chemicals & Fertilisers
Ltd. are setting up a new DAP/NPK/NP
plant at Paradeep in Orissa at
an estimated cost of Rs.1830.00
crore to produce 15 lakh MTPA
of DAP, 3.20 lakh MTPA of NPK
and 1.00 lakh MTPA of NP fertilizers.
The project is expected to be
commissioned in September 1999.
iv)
Duncan Industries Ltd. are implementing
a project for expanding the capacity
of their plant at Kanpur, Uttar
Pradesh, by an additional capacity
of 2.00 lakh MTPA of urea at an
estimated cost of Rs.636.38 crore.
The project is expected to be
commissioned in May 2003.
v)
Godavari Fertilizers & Chemicals
Ltd. are implementing a project
for expanding the capacity of
their plant at Kakinada, Andhra
Pradesh by 2.80 lakh MTPA of DAP
at an estimated cost of Rs.99.13
crore. The project is expected
to be commissioned in December
2001.
vi
) Hind Lever Chemicals Ltd. are
implementing a project for expanding
the capacity of their plant at
Haldia, West Bengal by 3.00 lakh
MTPA of DAP and 1.00 lakh MTPA
of NPK at an estimated cost of
Rs.88.31 crore. The project is
expected to be commissioned in
March 1999.
4.5.2
A statement giving the details of
fertiliser projects under implementation
is given in Annexure-IV.
PROJECTS
UNDER CONSIDERATION
4.6.1
Project proposals involving a total
investment of Rs.6973 crore for
creating an additional capacity
of 39.04 lakh TPA of urea, have
been posed by public sector
undertakings/cooperative societies
for investment approval of the Government
under the prescribed investment
approval procedure. These are:-
i)
Expansion of Panipat plant of
NFL in Haryana.
ii)
Expansion of Nangal plant of NFL
in Punjab.
iii)
Expansion of Hazira plant of KRIBHCO
in Gujarat.
iv)
A new urea plant to be set up
by KRIBHCO at the existing site
of FCI’s Gorakhpur plant
in Uttar Pradesh.
v)
Expansion of Thal plant of RCF
in Maharashtra.
vi
) A grass root urea plant to be
set up at Nellore by IFFCO in
Andhra Pradesh.
FEEDSTOCK
POLICY FOR FERTILIZERS
4.7.1
The feedstock policy for nitrogenous
fertilizers had hitherto envisaged
establishment of new plants based
mainly on natural gas. Realising
the constraints in the availability
of natural gas which is the preferred
feedstock, Department of Fertilizers
has set up a Core Group of Fertilizer
Companies with a view to exploring
the feasibility of importing LNG
by forming a consortium of fertilizer
companies, along with other interested
economic operators, for fertilizer
sector in particular and other complementary
sectors such as power, domestic
fuel etc. The report of the Core
Group is awaited.
4.7.2
One of the options being considered
envisages the installation of a
re-gasification facility at Haldia
in West Bengal and the construction
of a pipeline connecting the fertilizer
plants in the eastern sector with
an inter-link to the HBJ pipeline.
Existing naphtha based units such
as IFFCO-Phulpur, DIL-Kanpur, Nangal,
Panipat and Bhatinda units of NFL
and new projects like KRIBHCO-Gorakhpur
could also be served by this system.
JOINT
VENTURES ABROAD
4.8.1
Due to constraints in the availability
of gas, which is the preferred feedstock
for the production of nitrogenous
fertilizers, and the near total
dependence of the country on imported
raw materials for production of
phosphatic fertilizers, the Government
has been encouraging Indian companies
to establish joint venture facilities
with buy-back arrangements in other
countries, which have rich reserves
of natural gas and rock phosphate.
4.8.2
The Govt. of India, Indian Farmers
Fertiliser Co-operative Ltd. (IFFCO)
and Southern Petrochemical Industries
Corporation Ltd.(SPIC), are equity
partners and are collectively holding
10.64% of the share in the joint
venture company in Senegal named
‘Industries Chimiques du Senegal’
(ICS). The company produces phosphoric
acid and finished phosphatic fertilizers
in its plants located in Darou and
M’Bao in Senegal. It started
production in 1984 and after debottlenecking,
attained an installed capacity of
3.5 lakh MT of phosphoric acid per
annum. During the year 1998, the
company produced 3.33 lakh MT of
phosphoric acid in terms of P205,
achieving 95% capacity utilisation.
The supplies of phosphoric acid
to India from this venture in 1998
totalled 2.40 lakh MT.
4.8.3
From 1.1.96, Compagnie Senegalaise
Phosphates de Taiba (CSPT), a mining
company which supplied rock phosphate
to ICS, has been merged with it.
ICS is now implementing a project
for doubling the production capacity
of its phosphoric acid plants and
development of new rock phosphates
mines at cost of about US $ 250
million. The project is expected
to be completed within 30 months
from the zero date of 30.9.98. ICS
proposes to sell a major portion
of the phosphoric acid produced
in the expanded plant to India.
Government has approved equity contribution
of US $ 20 million by IFFCO in ICS
Senegal for financing the expansion
project.
4.8.4
A joint venture project in Jordan
to produce 2.24 lakh MT of phosphoric
acid per annum jointly implemented
by SPIC and Jordan Phosphate Mines
Company Limited is under production
since May 1997.
4.8.5
The following overseas projects
are under implementation/consideration:
i)
A Memorandum of Understanding
was signed on 30.7.94 between
the Government of India/KRIBHCO/RCF
and the Government of Sultanate
of Oman/Oman Oil Company, expressing
the interest of both the parties
in sponsoring the design, construction,
financing and operation of a world
scale fertilizer complex in Oman.
The Joint Venture Agreement of
the project was signed in April
1997. Other project agreements
have also reached the stage of
finalisation.
Based
on a Detailed Feasibility Report,
which envisages the production
of about 14.52 lakh MT of urea
and 3.30 lakh MT of merchant ammonia
per annum, the Govt. has approved
on 1.12.97 the investment proposal
of RCF/KRIBHCO to make an equity
contribution of US $ 69 million
each in the proposed Joint Venture
Company (JVC) i.e. Oman India
Fertilizer Company which has been
registered in Oman on 18.2.98.
It is estimated that the joint
venture would be commissioned
by 2002. The estimated cost of
the project is US $ 1106 million.
ii)
A Memorandum of Understanding
(MOU) was signed between Govt.
of India/IFFCO & KRIBHCO (INDCONS)
and Govt. of Iran/Qeshm Free Area
Authority (QFAA) on 6.3.94 for
exploring the possibility of setting
up a fertilizer plant in QFAA.
A supplementary MOU was signed
on 26.11.96, reflecting the agreed
position of the joint venture
partners on the price of inputs
required for the proposed nitrogenous
fertilizer project. The Feasibility
Report for the establishment of
a 1500 MTPD ammonia and 2200 MTPD
urea project at an estimated cost
of US $ 470 million has been appraised
and adopted by the joint venture
partners.
iii)
SPIC is setting up a gas-based
nitrogenous fertilizer plant at
Dubai in United Arab Emirates
to produce 4.00 lakh tonnes of
urea at an estimated cost of US
$ 160 million. The plant and equipment
have already been procured and
the plant is expected to be commissioned
by September 1999.
iv)
A joint venture between Office
Cherifien Des Phosphates, Morocco
and Chambal Fertilizers &
Chemicals Ltd. (CFCL) to produce
3.30 lakh tonnes of phosphoric
acid at an estimated cost of US
$ 228 million is being set up
in Morocco. All Govt. clearances
have been granted and a JVC under
the name "INDO MAROC PHOSPHORE
SA" has been formed on 20.11.97.
CFCL will hold 50% of the equity
of the JVC. The project is expected
to go into production in the 2nd
quarter of 1999.
SINGLE
SUPERPHOSPHATE
4.9.1
Single Superphosphate (SSP) is a
straight phosphatic fertilizer.
At present, about 79 medium and
small scale units, including 5 in
the public sector, having a total
annual installed capacity of 10.02
lakh MT of phosphate (P2O5),
are engaged in the production of
SSP. Along with other phosphatic
fertilizers, SSP was also decontrolled
w.e.f. 25.8.1992. The estimated
production of SSP during 1998-99
is expected about 4.97 lakh MT of
phosphate (P2O5)
nutrient as against 5.07 lakh MT
in 1997-98.
PRODUCT
MIX
4.10.1
Among the straight nitrogenous fertilizers,
the country is currently producing
urea, ammonium sulphate, calcium
ammonium nitrate (CAN) and ammonium
chloride. The only straight phosphatic
fertilizer being produced in the
country is SSP. The complex fertilizers
under production include Di-ammonium
phosphate (DAP), and several grades
of nitrophosphates and NPK complexes.
Urea and DAP are the main fertilizers
produced indigenously accounting
for 84.5% and 42.8% of the overall
capacity of nitrogen and phosphate,
respectively.
BIO-FERTILIZERS
4.11.1
Bio-fertilizers are carrier based
formulations of live and beneficial
micro organism and are a self-generating
source of plant nutrients. They
are complementary to chemical fertilizers.
Besides being cost effective, bio-fertilizers
are eco-friendly. To encourage the
bio-fertilizers production, Department
of Fertilizers has been giving one-time
grant-in-aid of Rs.20 lakh (Maximum)
to fertilizer PSUs/Cooperatives
for setting up a bio-fertilizer
plants of capacity of 100 TPA and
above.
4.11.2
In the year 1997-98, this Department
released a total grant-in-aid of
Rs.38.24 lakh to the fertilizer
PSUs/Cooperatives under its administrative
control, for setting up bio-fertilizer
plants. Out of this grant-in-aid,
HFC, MFL availed Rs.24.74 lakh and
Rs.13.5 lakh, respectively. The
plants at Siliguri, Cuttack, Bhopal
and Gwalior of HFC and Udyogamandal
unit of FACT are expected to be
commissioned by 1998-99.
