Fertiliser Majors Plan Hike In Urea Capacity To 3mt

Fertiliser companies are planning to add over three million tonnes of urea capacity to exploit the favourable conditions in the urea industry.

Led by Indian Farmers and Fertilisers Co-operative (IFFCO), public and private sector players like Rashtriya Chemicals and Fertilisers (RCF), Gujarat Narmada Valley Fertilisers (GNFC), and Gujarat State Fertilisers (GSFC) are planning capacity additions of over seven lakh tonnes each.

Sops like increase in subsidy for nitrogenous and phosphatic fertilisers, quick disbursement of the subsidy amount and favourable long-term demand projections has led to this rush. Urea demand is projected to grow by over seven per cent, says K C Mahapatra, chairman of Fertiliser Association of India, (FAI) and managing director of GNFC.

 

While GSFC, GNFC, RCF and IFFCO plan to set up new units, Chambal Fertilisers, the KK Birla group major is expanding its urea capacity at Gadepan in Rajasthan.

GSFC has planned a urea plant at Baroda with an annual capacity of seven lakh tonnes. Based on natural gas from Bombay High, the company has also put forth a proposal to set up an ammonia unit called ammonia IV plant.

The new ammonia plant will be in lieu of the old ammonia I unit at Sikka. The old unit is expected to be scrapped some time this year. Since the ammonia I unit was recently revamped, GSFC will be able to continue production from this unit for some time, a GSFC official claimed.

GSFC is also increasing capacity of di-ammonium phosphate (DAP) unit from seven lakh tonnes per annum (tpa) to nine lakh tpa at Sikka, Gujarat. Debottlenecking and a few changes in the production pattern will enable GSFC to double its DAP output, an official said.

GNFC and RCF have both planned gas-based urea plants at their existing premises having a capacity of seven lakh tonnes per annum.

While GNFCs unit at Bharuch will be based on gas supplied by Gujarat State Petrochemicals Corporation Ltd , feedstock for RCFs unit is expected from Bombay High.

IFFCO is considering a 1,350 tpd of ammonia and 2,200 tpd of urea plant at Andhra Pradesh. Although at a nascent stage, the unit will come up in joint venture with the private sector. At Gadepan , Rajasthan, Chambal Fertilisers is doubling urea capacity from seven to 14 lakh tpa.

The increased urea output is expected to make up for the shortfall in domestic production. India imported over three million tonnes of urea in 1996-97. Imports of nitrogenous fertilisers are expected to go up to 4.5 million tonnes in 1997-98.

The nitrogen sector will continue to grow at seven per cent, while phosphatic and potash sector is poised to grow at the rate of 12 per cent, said Mahapatra.

The hike in subsidy component on DAP and phosphatic fertiliser has lowered the farmgate price of these nutrients.

The low farmgate price of fertilisers may help promote a balanced use of fertilisers, said Mahapatra.The new farmgate price of urea is Rs 3,600 per tonne (Rs 2,600 per tonne subsidy component), DAP is priced at Rs 8,300 per tonne ( Rs 3,000 per tonne) and single super phosphate is available at Rs 2,905 per tonne (Rs 600 per tonne).