Fertilizer Industry In India

Group No. : 8 Group Members:

Sumeet Rattan
Shalabh Aggarwal
Kunal Abhishek
Shirish Jain
 Present Status of Fertilizer Industry
 India being the third largest producer and consumer of fertilizers
in the world with an installed capacity of Nitrogen (N) and
Phosphate (P) nutrients at 14 million tonnes p.a.

 Urea, a nitrogenous type of fertilizer, is most widely consumed in

India. Currently the urea capacity is 20.2 million tonnes while
consumption is 21.7 million tonnes.

 Fertilizer production is highly energy intensive with cost of

feedstock and fuel alone accounting for between 55 to 80 per
cent of the cost of production. Plants in India are based primarily
on three feedstock -- naphtha, fuel oil and natural gas with a
significant proportion of domestic capacity of urea plants based
on naphtha or fuel oil which cost more than natural gas. High
cost feedstock and increased production / consumption have
caused a steady increase in fertilizer subsidy.

 Installed capacity is 20.8 million MT in the year 2003-04

Fertilizer consumption in India vis-à-
vis neighbouring countries
 Per hectare fertiliser consumption (Kg/ha) in
neighbouring countries during 2001-02

China – 225.1 Bangladesh – 159.7

Sri Lanka – 122.7 Pakistan – 131.9
India – 91.5 World – 89.9

 India is the third largest producer and consumer of

fertilizers in the world after China and USA and it
contributes to 12% of world production of N & P
nutrients and 12.6% of world consumption of NPK
nutrients.
 Different grades of Fertilisers

Based on consumption pattern in 2001-02:

 Nitrogen (N) comes from –
Urea (81%), DAP (9.8%), Complexes (7.6%) and
Others (1.6%)

 Phosphate (P2O5) comes from –

DAP (64.9%), Complexes (25.3%), SSP (9.5%) and
Others (0.3%)
 Potash (K) comes from –
MOP (71.6%), Complexes (27.8%) and Others (0.6%)
 Nitrogenous Fertilizers
Urea
Table –Production and Consumption of Urea

(‘000 MT) (‘000 MT)

1998-99 19292 20396
1999-00 19808 20277
2000-01 19624 19186
2001-02 19003 19917
2002-03 18621 18493
2003-04 19038 19623
 Price $/MT FOB

0
50
1 00
1 50
2 00
2 50
3 00
3 50
1963
1964
1965
1966
1967
1968
1969
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985

Y ear
Price movement of urea

1986
1987
1988
Ure a Price

1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
Till Oct 2004

2003
2004
Other Nitrogenous Fertilizers

 The other nitrogenous fertilizers — CAN, ammonium sulphate (AS)

and ammonium chloride (AC) — were decontrolled in 1991 .
 The total installed capacity of CAN in the country is 942,500 tonnes
per annum (tpa).
 The major CAN producers in the country are NFL, Steel Authority of
India Ltd. (SAIL) and Gujarat Narmada Valley Fertilizers Company
Ltd.
 The total installed capacity of AS is 864,500 tpa.
PHOSPHATIC FERTILIZERS

DAP (64.9%), Complexes (25.3%),

SSP (9.5%) and Others (0.3%)

 DAP has a domestic production of 4 m.t.

 The total installed capacity of SSP in the country
is 6.48 m.t. per annum.

POTASSIC FERTLIZERS
The major potassic fertilizer consumed in the country is
Muriate of Potash (MOP).
 ENHANCEMENT IN FERTILIZER
AVAILABILITY
 Economic Reforms and Its Impact
 Investment in fertilizer industry -Public, Private
and Cooperative sectors
 Imports of fertilizers
 Distribution of fertilizers
 Fertilizer promotion
 Quality Control of Fertilizer
Quality Control Measures

 Raw material quality

 Process Control
 Product Quality Control
 Quality Control during Storage
 Field level Quality Control
 Agencies involved in Quality Control
of Fertilisers

 Department of Fertilisers
 Central Fertiliser Quality Control & Trg Institute, Faridabad
 Regional Fertiliser Control Laboratories (Chennai, Kalyani
(Kolkata), Mumbai)
 State Agricultural Departments
 State Govt Quality Control Laboratories
 Policy Initiatives

 Pricing policy
 Fertilizer subsidy
 Fiscal concessions
 Transport infrastructure
 Setting-up New Capacities
 Addition to Domestic capacities
 Joint ventures abroad
 UREA IMPORT BY CHINA AND ITS
IMPLICATIONS FOR INDIA

 China and India have emerged as dominant forces in the world

fertiliser market.
 The two countries together have accounted for more than one-third
of the world imports of urea.
 Political factors contributed to skews in demand of urea in the two
countries.
 Fertiliser import policy has been governed, more often than not, by
short-term and ad hoc considerations.
 Recently China has embarked upon a strategy of achieving self-
sufficiency in fertiliser production.
 World capacity for the production of urea in 1995 was 102 million
mts. This capacity is expected to rise to half a billion mts by the year
2010
Government Pricing Policy and Competitiveness:

Input prices are either internationally determined or fixed

by GOI

Output prices fixed by GOI

Industry lacks flexibility and autonomy in decision

making

 So, it is the Pricing policy of GOI which determines the

competitiveness.
Government Pricing Policy and Competitiveness:

Urea: The Group Concession Scheme

 Introduced to enhance competitiveness of the

industry by :-

a) Encouraging efficiency parameters of

international standards;

b) Stimulating the use of the most efficient

feed stock and latest technology.

c) Phased decontrol of movement,

distribution and sale of urea
Zuari - Chambal
The Group:
• Zuari Chambal is part of the K.K. Birla Group.
• Turnover of Rs. 5,000 crores and an asset base of Rs. 4,500 crores.
• It is a professionally managed, diversified Conglomerate having
investments in fertilisers, cement, hybrid seeds, biotechnology, ready-
to-assemble furniture, chemicals, software, investments, home
finance and engineering services.

International Collaborations

Zuari-Chambal has several reputed International Groups as Joint

Venture partners. These include Office Cherifien des Phosphates
(OCP), Morocco - Largest producers of phosphoric acid in the world
 COMPANY PROFILE

 Chambal Fertilisers and Chemicals Limited was promoted by

Zuari Industries Ltd. in 1985.

 It is located at Gadepan, 35 kms. from Kota, on the Kota -

Baran National Highway, Kota is the hub of industrial activity
in the state of Rajasthan.
Manufacturing
 Chambal operates two hi-tech nitrogenous fertilizer plants and is the largest
fertilizer complex in private sector in India.
 The two mega fertilizer plants having a total re-assessed capacity of 1.7292
million tons of urea per annum.
 Both Gadepan-I & Gadepan-II phases represent a total investment of over
Rs. 2,500 Crores. Gadepan-I was commissioned in December 1993 and its
commercial production commenced in January 1994.

Technological Advancements

 Gadepan-I is designed to produce 1,350 MT of Ammonia by Haldor Topsoe,

Denmark technology and 2,348 MT per day urea based on Snamprogetti,
Italy process.

 Gadepan-II Ammonia plant is based on Kellog (USA) technology and the

Urea Plant is based on ACES process of TEC, Japan. The Ammonia Plant
is a single stream, having a design capacity of 1,350 MT ammonia per day.
The Urea Plant is designed to have twin streams, each with the design
capacity of 1,175 tons of urea per day.

 Gadepan-I is based on natural gas as the feed stock while the fuel demand
is met by naphtha. Gadepan-II is designed both for naphtha and natural gas
as feed stock..
 MANUFACTURING PROCESS

Manufacturing process for organic compound fertilizer made from

composted livestock manure
Manufacturing process for organic compound fertilizer
 Operations and Supply Chain Management
 Chambal Fertilisers and Chemicals Limited caters to the Northern and Western
regions of India and supplies urea to nine states.

 The company markets urea under the brand name ‘Uttam Veer’.

 With ten regional offices, Chambal has a 1,000-strong dealer network and 14,000
village level outlets to assist distribution.

 Besides urea, other agri-inputs as other fertilisers, plant protection chemicals, seeds
and bio-fertilisers are being made available to the farmers under the ‘single window’
concept.

 These products are being sourced from reputed suppliers and sold under the ‘Uttam’
umbrella brand.Extensive promotion activities are undertaken to promote ‘Uttam
Veer’ by the dedicated team of field officers. Today, Chambal is India’s largest urea
unit in the private sector. The soil testing facilities at Sri Ganga Nagar and Agra use
sophisticated testing tools.

 Chambal has a website dedicated to the Indian farmer. It is both area and crop
specific and is an endeavour to help improve farm productivity by providing online
information on various agricultural practices. It answers queries that a farmer may
have and provides information on market prices of farm produce as also the weather
forecast. In order to assist the farmers access it, the company has set up kiosks and
has an arrangement with Agriculture Universities, Agriculture Research Stations and
Krishi Vigyan Kendras.
 Environmental Protection

 Chambal is deeply committed to environmental

protection, pollution control and maintenance of
ecological balance. A corporate conscious of its
responsibilities, the Company have consistently
taken upon itself major environmental projects. Zero
affluent discharge, (the first in the fertiliser industry),
afforestation programme to transform large
stretches of barren terrain into strips of green, wild
life protection are a part of its enterprise. Chambal
Fertilisers has been certified as an ISO14001
Company as a result of its environmental practices.
Awards
•Fertilisers have helped transform the agriculture sector in India
- from being dependent on food grain imports before
independence, India is now self sufficient.
•Fertiliser consumption has increased 20 fold since
independence.
•This remains one of the few highly regulated industries in India
•Prices (retention pricing), subsidies, distribution restrictions,
imports and even choice of technology, feedstock are all
controlled / regulated by the government. There are signs that
the fertiliser pricing mechanism is being reviewed, imports
liberalised, tariff rates revised and measures being debated to
lower fertiliser subsidies