Sunteți pe pagina 1din 20

REPORT

of
Fertilizer Industry

Submitted to Gitarattan International Business School In partial fulfillment of the


Requirements For the award of the degree….

Master of Business Administration (M.B.A)


(Batch 2018-2020)

BY
Prateek Thakur
University Roll No. (9388062)
Under The Guidance
Of

Ms. Neha Arora

1
Index
1. Acknowledgement……………………………………….(3)
2. Certificate Of Originality………………………………(4)
3. Introduction…………………………………………………(5)
4. Objective……………………………………………………..(7)

2
Acknowledgement

I am very grateful to my report Guide Mrs.Neha Arora for giving her valuable time and
constructive guidance in preparing the report. It would not have been possible to
complete this report in short period of time without his kind encouragement and valuable
guidance.

Date: Signature:

(Prateek Thakur)

3
Certificate of Originality

I hereby declare that the project entitled “Fertilizer” submitted to the Department of
Personalty Development, GIBS in partial fulfillment for the award of the degree of Master
of Business Administration in session 2018-2020 is an authentic record of my own work
carried out under the guidance of Ms. “Neha Arora” and that the Project has not
previously formed the basis for the award of any other degree.

Place: Rohini Signature of the Candidate

Date: (Prateek Thakur)

(360)

This is to certify that the above statement made by the candidate is correct to the best of
my knowledge.

Signature of Internal Guide:

Name: Ms. Neha Arora

Designation: Lecturer

4
Introduction

India is the 3rd largest producer and consumer of fertilizers. Overall production of fertilizers during
FY18 has been 413 LMT.
Fertilizers are substances that supply one or more of the chemicals required for plant growth. Fertilizers
can be both organic and inorganic. As per industry experts it is said that there are sixteen elements that
are absolutely necessary for plant growth. Out of these sixteen 9 elements are required in large quantities
while the other seven are needed in smaller amounts.
The Indian Fertilizer Industry has shown tremendous growth in the last five decades and at present
ranks third in the world.
-India is the second largest consumer of fertilizers after China.
-India also ranks second in the production of nitrogenous fertilizers and third in phosphatic fertilizers
whereas the requirement of potash is met through importssince there are limitedreserves of potash in
the country.
According to the Food and Agriculture report world demand for total fertilizer nutrients is estimated to
grow at 1.8% per annum from 2014 to 2018. The demand for nitrogenous, phosphatic, and potash is
forecasted to grow annually by 1.4%, 2.2%, and 2.6%, respectively, during the period. Over the next five
years, the global capacity of fertilizer products, intermediates and raw materials will increase further.
The global demand for nitrogenousfertilizers is expected to grow around 5.6% to 119.4MT in four years
through 2018, according to the Food and Agriculture Organization of the United Nations. Asian nations,
led by China and India, are expected to account for 58% of this increase.The fertilizer industry is
considered to be an allied activity of the Agricultural sphere. Farming and ancillary activities contribute
about 1/6th to India’s GDP.
Since agriculture is a very important sector it goes without saying that the fertilizer industry is one which
the Indian economy cannot do without. The fertilizer industry in India is extremely vital as it
manufactures some of the most important raw materials required for crop production. The primary
objective of this industry is to ensure the inflow of both primary and secondary elements required for
crop production in the desirable quantities.
The success of the agricultural sector in India is largely dependent on the fertilizer industry. The
benchmark that the food industry in India has set is mainly due to the many technically competent
fertilizer producing companies in the country.

Background
The fertiliser industry was recognized as a core sector for public sector investment in the industrial policy of
1956. Several public sector units came up during 1960-70 for producing ammonium sulphate, calcium

5
ammonium nitrate (CAN), Di-Ammonium Phosphate (DAP) and complex NPK's even as private sector
investment was also encouraged. Private sector units such as Duncan Industries, Shriram Chemicals, Auari
Agro now called Auari Industries and Southern Petrochemical Industries Corporation (SPIC) came up in the
late 1960s and the mid 1970s. Of the 26 urea plants commissioned during 1966-82, seventeen were in the public
sector, seven in the private sector and two in the cooperative sector.
Indian Fertilizer Industry’s main objective to ensure the supply of primary and secondary nutrients in the
required quantities. The Indian Fertilizer Indiustry is the most energy intensive sectors according to the context
of environmental discussions. As there is increasing productivity through the implementation of competent and
pollution free technologies in the manufacturing sector it would be desirable in combing economic,
environmental and social development objectives.

Growth of Fertilizer Industry


(i)The actual production of all the Fertilizers during the year 2016-17 was 414.41 LMT. The estimated
productionof all the Fertilizers during the year 2017-18 is expected to be 462.20 LMT showing an
increase of more than 11% in comparison with the previous year. The rapid build-up of fertilizer
production in the country has been achieved as a result of a favourablepolicy environment facilitating
investments in the public, co-operative and private sectors.
(ii)The Government had announced New Investment Policy(NIP)-2012 on 2nd January, 2013 and its
amendment on 7th October, 2014 to facilitate fresh investment in urea sector and to make India self-
sufficient in the urea sector. Under the said policy, Matix Fertilizers & Chemicals Limited (Matix) has set
up a CBM based Greenfield Ammonia Urea complex at Panagarh, West Bengal with the installed capacity
of 1.3 MMT per annum. The commercial production of Matix has started on 1st October, 2017.
(iii)At present, there are 31 large size urea plants in the country manufacturing urea, 21 units produce
DAP and complex fertilizers and 2 units manufacture Ammonium Sulphate as a by-product.

Latest developments
 The leading role is to be played by Gujarat in fertilizer production.
 There is lot of development going on to meet the demand of fertilizers in the country through
indigenous production, self-reliance in design engineering and execution of fertilizers projects is
very crucial. There are consultancies which organize themselves to undertake execution of
fertilizer projects starting from concept/designing to commission of fertilizers plants in India and
abroad.
 Today India has developed expertise for fabrication and supply of major and critical equipment
such as highpressure vessels, static and rotating equipment, Distributed Control System(DCS),
heat exchangersand hydrolyser for fertilizer projects.
 India fertilizer industry is carrying out de-bottlenecking and energy saving schemes for the
existing plants to enhance the capacity and reduce the specific energy consumption per ton of
product.

6
 The most significant development/advancement made by the industry is in the fieldof
manufacturing catalysts of various ranges by catalyst-manufacturing Organisations like PDIL. PDIL
helps in implementing the schemes for enchancement of capacity and technological upgradation
in their existing catalyst plant and other utilizes at Sindri to compete in the International Market.

Types of Fertilizer
(i)Organic Fertilizer
These are the most commonly used fertilizers. Organic fertilizers are easily available and extremely safe.
Some of the popular organic fertilizers include; manure, peat moss, worm castings, slurry, sewage,
seaweed, and guano.

Advantages of Organic Fertilizers

 Advantages of Organic Fertilizers


 Improve the quality of the soil.
 Mobilize the existing soil nutrients.
 Release nitrogen slowly and consistently
 Soil moisture retention
 Do not harm the plants like chemical fertilizers

(ii) Inorganic or Chemical Fertilizer


These fertilizers are usually got from chemical compounds like potassium chloride, ammonium
phosphates and ammonium nitrate. Some of the popular Inorganic fertilizers used in India re; limestone,
mined rock phosphate and Chilean sodium nitrate

Advantages of Organic Fertilizers

 The more the amount of nitrogen the healthier are the stems and leaves of the plants.
 Increased levels of phosphorus result in healthier tubers and roots
 The Potassium obtained from potash promotes stems and leaves development.
 Releases nitrogen quickly

Indian Industries and Companies of Fertilizer


India is home to numerous top class private and government fertilizer companies. Ranging from
fertilizers to seeds to fungicides the many fertilizer companies in India are the major reason behind the
success story of the sector in India.

In the present scenario, there are more than 57 large and 64 medium and small fertilizer production
units under the India fertilizer industry. The main products manufactured by the fertilizer industry in

7
India are phosphate based fertilizers, nitrogenous fertilizers, and complex fertilizers. The fertilizer
industry in India with its rapid growth is all set to make a long lasting global impression.

(i)Public Sector Fertilizer Company in India

 National Fertilizers Limited


 Fertilizers & Chemicals Travancore Limited
 Rashtriya Chemicals & Fertilizers Limited
 Madras Fertilizers Limited
 Steel Authority Of India Limited
 Neyveli Lignite Corporation Limited
 Paradeep Phosphates Limited
 Pyrites, Phosphates & Chemicals Limited
 Hindustan Fertilizer Corporation Limited

(ii)Private Sector Fertilizer Company in India

 Ajay Farm-Chem Private Limited


 Balaji Fertilizers Private Limited
 Deepak Fertilizer and Petrochemicals Corporation Limited
 Bharat Fertilizer Industries Limited
 Coromandal Fertilizers Limited
 Gujarat Narmada Valley Fertilizer Co. Limited
 Meerut Agro Chemicals Private Limited
 Duncans Industries Limited
 Karnataka Agro Chemicals

 Godavari Fertilizers & Chemical Limited

 Shri Amba Fertilizers (I) Private Limited

 Tuticorin Alkali Chemi & Fertilizer Limited


 Gujarat State Fertilizers & Chemicals Limited
 Indo-Gulf Fertilizers & Chemicals Corporation Limited
 Southern PetroChemical Industries Corporation Limited
 Maharashtra Agro Industrial Development Corporation
 Zuari Industries Limited- Fertilizer Limited
 Mangalore Chemicals & Fertilizers Limited

Top Fertilizer Companies in India


Fertilizer Companies Products Contact Details

Basant Agro Tech (India) Ltd.,


NPK Fertilizers
Basant Agro Tech India Limited Sea Lord A-1/3,
SSP Fertilizers
Cuffe Parade,
SSP Single Super Phosphate
Mumbai 400 005.
8
Seeds India.
Basant Agro Tech (I) Ltd.
Near S.T.Workshop, Kaulkhed, Akola.
444 044.
Phon:0724-2432513.
email:customercare@basantagro.com

Namrup, P.O. Parbatpur - 786623


Dist. Dibrugarh (Assam), India
Bharat Fertilizer Industries Prilled Urea
Fax:0374-2500317 / 2500524
Limited Ammonia
Tel: See link
email: bvfclnam@bsnl.in

Fertilizers
Uttam Veer Urea (Urea)
Uttam Neem (Neem Coated Urea)
Uttam DAP (Di Ammonium
Phosphate)
Uttam MOP (Murate of Potesh)
Uttam SSP (Single Super Phosphate)
Seeds
Hy Paddy - Khushi & Barkha
Paddy - Uttam Kranti
Bt Cotton Dhruv
Barley - Uttam
Mustard - Uttam Kranti
Corporate Office :
Soybean - Uttam Kranti & Chamtkar
Corporate One, First Floor,
Chambal Fertilizers and Chemicals Hy Bajra - Albela & Uttam Kranti-
5 Commercial Centre,
Limited 2095
Jasola, New Delhi - 110 025
Hy Maize - Nandini & Muskan
+91-11-11 41697900 / 46581300
SSG - Manik & Moti
Kranti
Wheat - Uttam Kranti
Insecticides
Aceveer
Endoveer
Alphaveer
Acto
Lambda veer
Chlorveer
Monoveer
Imidaveer
Lambda Double

9
Disulphonic Acid
p-Chloro Benzene Sulphonyl
Chloride Prospect Chambers,
Ammonium Sulphamate 317/21, Dr. Dadabhoy Naoroji Road,
Special Chemicals Mumbai - 400 001, India.
Methane Phone: +91 22 22048881-2-3,
Dharamsi Morarji Chemical Boronated Single Superphosphate Fax : +91 22 22813657
Company Limited (Borophos) M.G.Road, Ambernath (West),
Chlorosulphonic Acid Pin code - 421501, District : Thane,
Oleums Maharashtra, India.
Sulphuric Anhydride Phone : +91-251-2682241-2-3-4-5
Fertilizers and Agri Business Fax : +91-251-2682769
Single Superphosphate (Powder &
Granule)

Rock Phosphate
Ammonia
Sulphur
Sulphuric Acid
Hydrochloric Acid P.O. Fertilizernagar - 391 750, Dist.
Liquid Sulphur Vadodara Gujarat (India)
Gujarat State Fertilizer and Chemical Methyl Ethyl Ketone Phone 91-265-2242651, 91-265-
limited, Vadodara Phosphoric Acid 2242751,
Benzene Fax 91-265-2242746(Purchase),
(MEK) 2240966, 22401191/5
Acetone
Cyclohexanone
Methyl Acrylate
Caustic Soda Lye

Ashutosh Chowdhury Avenue,


Kolkata: 7 00019 Tel.No.: +91 (0) 33
2283
2226/2529/2952/2871/2032 Fax
no.: +91 (0) 33 2283 2478/2640
Sulphuric Acid
hcl_ho@hindustancopper.com
Hindustan Copper Limited (HCL), Copper Sulphate
57/190 R V Road, Near Vijaya
Khetrinagar Anode Slime
College,
Copper Cathode
Bangalore: 560004
Tel. No.: +91 (0) 80 2656 3343
Fax No.: +91 (0) 80 2656 4712
email:
hcl_bangalore@hindustancopper.com

10
Indian Farmers Fertiliser Cooperative
Ammoniam Chloride (ACl)
Limited (IFFCO)
Muriate of Potash (MOP)
Indian Farmers Fertilizer IFFCO Sadan, C-1, District Centre,
Ammoniam Sulphate
Cooperative Limited (IFFCO) Saket Place, New Delhi - 110017
Di-ammonium Phosphate (DAP)
Phone: 011-42592626,26542625
Sulphate of Potash (SOP)
Fax: 011-42592650

Zuari Industries Limited Jai Kisaan


Bhawan
Urea Zuarinagar - Goa 403 726.
Zuari Industries Limited Bio Fertilizers Tel No.: 91-832-2592180
Seeds Fax No.: 91-832-2555462
E-mail: shares@zuari.co.in
investor_redressal@zuari.co.in

United Phosphorus Limited


Uniphos House, Madhu Park Centre,
Caustic Chlorine Opp Madhu Park,Chitrakar
Industrial Chemicals Dhurandar
United Phosphorous Limited
Speciality Chemicals Marg, Khar (West), Mumbai 400 052
White Phosphorus Tel : 2646 8000 (Board)
Fax : 26041010
Email : info@uniphos.com

Chart : Category-wise production of fertilizer

11
During theFY
2016-17 India has produced 413.24 LMT of fertilizers. Urea dominates the total fertilizer production in
the country. While Indiais the world’s second largest consumer of urea, the Government of India is
working towardsincreasing the production of urea so as to end imports by 2022and achieve self-
sufficiency in Urea Production. Out of the total fertilizer production India produces only 10%-12%of
DAPbut due to recent fall of raw materialprices in the international markets,phosphates havebecome
cheaper and its economicalto produce the fertilizer rather than importing the end product. Hence the
government is encouraging sprucingup the production of DAP, which is the second most widely used
fertilizer after urea. Production of Complex Fertilizers includesthe various grades of
NPKFertilizers(Nitrogenous-Phosphorus-Potassic). The Government is encouraging SSP production as
SSP is also considered as a substitute to diammonium phosphate (DAP), which is largely import based
and costlier vis-à-vis to SSP.

Production of Major Fertilizers


The production of Urea during the year2016-17 was 242.01 LMT and the production of DAP & Complex
fertilizers were 123.31 LMT. The estimated production of Urea during 2017-18 would be 242.51 LMT,
which is more than to previous year and the estimated production of DAP & Complex fertilizers would be
140.74 LMT, representing a growth rate of approximately 14 % in comparison with previous year.The
sector-wise production ofUrea, DAP and Complex fertilizers during 2016-17 and estimated production
during 2017-18 are given in the table below:-

12
Table 1: Sector-Wise Capacity of Fertilizer Manufacturing Units for 2016-2017 and 2017-
2018(figures in *LMT)

Joint Ventures abroad


is to the extent of 25% our requirementof Urea,90% in case of Phosphates,eitheras raw material or
finished fertilizers (DAP/MAP/TSP) and 100% in case of Potash. The Government has been encouraging
Indian Companies to establish Joint Ventures abroad in Countries which are rich in fertilizer resources
for production facilities with buy back arrangements and to enter into long term agreement for supply of
fertilizers and fertilizer inputs to India. Further, the Department is also working with the goal of having
access to acquisition of the fertilizer raw materials abroad.

Joint Ventures Projects


So far, the Department of Fertilizers has undertaken Joint Ventures abroad with 5 Countries in the
previous years. The details of such joint ventures in the fertilizer sector are at Annexure-VII. Although
during the year 2016-17, no joint venture with any country was signed by this Department but a number
of major developments took place with the following Countries:-

Algeria:
An Algerian delegation led by the Director General-Mines and officials from PHERPOS, an Algerian
government owned mining company and other mining companies like ASMIDAL visited India. During this
visit, the Algerian delegation me senior officials from the Department of Fertilizers and officials from
fertilizer PSUs and private sector. During their interaction, the delegation invited Indian companies for
undertaking feasibility studies for cooperation in the fertilizer sector.

13
Malaysia:
The Malaysian Prime Minister presented a proposal for the setting up of a urea and ammonia
manufacturing plant in Melaka, Malaysia with production capacity of 2.4 million tonnes of urea and 1.35
million tonnes for ammonia per annum at an estimated investment of US$ 2.1 billion with an assured G2G
buy-back arrangement between India and Malaysia. Later the MoU has been signed between India and
Malaysia on 01.04.2017.

Iran:
(i)The RCF-GSFC delegation visited Tehran from 6thtill 9thNovember, 2016 to discuss setting up of Urea-
Ammonia plant in Chabahar Free Trade Zone. The delegation had a meeting with five potential JV
partners. Among five parties, at prima facie, only two parties i.e M/s Tadbir Energy Development
Company and M/s Pasargad Eneregy Development Company (PEDC) was found interested in proposed
JV. Delegation met National Iranian Gas Company (NIGC) for agreement on gas price and availability and
also discussed with Negin Mokran Development Company (NMDC) for por t infrastructure and utilities
cost.
(ii)Further, a meeting was held under the chairpersonship of Secretary (Fert) on 24.01.2017 to discuss
the issue. Joint Secretary (WA) mentioned that with current change in the United States political scenario,
we must have to wait for some time before taking any further decision. It was also decided that
RCF/GSFC would update DOF on the developments once MEA clarifies their stand on Iran including
possibility of funding the project.
Talks are also being held with countries like Iraq, Belarus, Saudi Arabia, Qatar etc. regarding Joint
Venture possibilities and Long Term Offtake Agreement.

14
Urea
Urea is an inexpensive form of nitrogenousfertilizer. Ureais synthetically produced in enormous
quantities. Although urea often offers farmers the most nitrogen for the lowest price in the market since
it is heavily subsidized by the Indian Government, it should be used judiciously to avoid the soil turning
acidic in nature. Urea contains 46% nitrogen. Urea is the only “Controlled Fertilizer” which means the
Government controls the MRP of Urea. Currently Urea is priced at Rs 5,360 per tonne.
At present, there are 31 urea manufacturing units in our country, out of which 28 urea units use Natural
Gas (either domestic gas / LNG or both / CBM) as feedstock and fuel and remaining 3 urea units use
Naphtha as feedstock and fuel.
MRP of Urea
The MRP of urea is statutorily fixed by the Government of India and at present it is Rs. 5360/-per MT
(exclusive of the Central/State Taxes). MRP includes the following:(i)Rs. 180/MT for dealer margin for
private traders/PSUs and Rs. 200/MT in case of Co-operatives.(ii)Rs. 50/MT is paid to retailers for
acknowledging the receipt and reporting the stock in mFMS as additional incentive.

15
An extra MRP of 5 % (of Rs. 5360/-per M T ) is c h a r g e d b y f e r t i l i z e r manufacturing entities on
Neem Coated Urea. Further, the Government of Uttar Pradesh levies Additional VAT on natural gas used
by urea plants situated in these states. Impact of this additional VAT is calculated perMT of urea on the
quantity of urea sold in UP and is recovered from the farmers of UP by charging Rs 600/-per MT.
Payment of subsidy
The urea issold at a Maximum Retail Price (MRP) statutorily fixed by the Government of India. The
difference between the delivered cost of urea at farm gate and net market realization by the urea units is
given as subsidy to the urea manufacturer/importer by the Government of India.
Chart : Trends in Urea Pricing(Rs/Tonne)

The current MRP of Urea which is Rs. 5360 per MT is exclusive of the Central Excise Duty for the
domestically produced urea, countervailing duty for the imported urea (which is 1% at present) and state
VAT (which again differs state to state.). (This will change with GST). The MRP also includes:
1.Rs. 180/MT Margins for dealers belonging in the private and PSU sectors and Rs. 200/MT for dealers in
the cooperative sector.
2.Rs 180/MT is given as Retailer margins which help in acknowledging the receipt and reporting the
stock.Ever since the government has also mandated introduction of neem coating of urea an additional
charge of an extra 5% on the MRP of urea is charged by the fertilizer manufacturing companies.
Chart : Production of Urea in India (in units of LMT)

16
Chart : Urea Imports by India (in units of LMT)

17
Diammonium Phosphate (DAP)
Diammonium Phosphate (DAP) is a concentrated fertilizer with high phosphorus and nitrogen content. It
can be applied directly to soil of a mixture with other fertilizersand to all soil types. The best effects are
achieved when applied prior to sowing. The major consumption of DAP is met through imports in the
country. DAP falls under the decontrolled fertilizers. DAP and DAP blends are used on a range of crops in
broad-acre farming, cereals, sugar cane, sowing pastures, dairy pastures, fodder crops and also in
horticultural crops; for example, vegetables and tree crops.
Diammonium Phosphate (DAP)production has risen on account of expansion of domestic capacity and
easy availability of acid, which has partly substituted imports thatdecreasedby 3.8% during FY18.India
mainly imports DAP from China (45%), Saudi Arabia (31%), USA (13%) and Jordan (5%).
Ammonium phosphate fertilizers first became available in the 1960s, and DAP rapidly became the most
popular in this class of products. It’s formulated in a controlled reaction of phosphoric acid with
ammonia, where the hot slurry is then cooled, granulated and sieved. DAP handles and stores well. The
standard nutrient grade of DAP is relatively high, at 18-46-0, so fertilizer products with lower nutrient
content may not be labeled DAP.
The inputs required to produce one ton of DAP fertilizer are approximately 1.5 to 2 tons of phosphate
rock, 0.4 tons of sulfur (S) to dissolve the rock, and 0.2 tons of ammonia. Changes in the supply or price of
any of these inputs will impact DAP prices and availability. The high nutrient content of DAP helps reduce
handling, freight and application costs. DAP is produced in many locations in the world and is a widely
traded fertilizer commodity.
Chart : Production of DAP in India (in units of LMT)

18
Chart : DAP imports by India (in units of LMT)

Nutrient Based Subsidy:

Government of India is implemented the Nutrient Based Subsidy (NBS) policy w.e.f. 1st April 2010. The
NBS deals with 22 grades of decontrolled fertilizers namely DAP, MAP, TSP, DAP Lite, MOP, SSP,
Ammonium Sulphate and 15 grades of complex fertilizers. These fertilizers are provided to the farmers at
the subsidized rates based on the nutrients (N, P, K & S) contained in these fertilizers. Additional subsidy
is also provided on the fertilizers fortified with secondaryand micronutrients as per the Fertilizer Control
Order such as Boron and Zinc. The subsidy given to the companies is fixed annually on the basis of its
nutrientscontent (i.e. Nitrogen, Phosphate, Potash and Sulphur) on per kg basis which is converted into
subsidy per tonne depending upon the nutrient content in each grade of the fertilizers. Under this
scheme, Maximum Retail Price (MRP) of fertilizers has been left open and manufacturers/marketers are
allowed to fix the MRP at reasonable level. These rates are determined taking into account the
international and domestic prices of P&K fertilizers, exchange rate, inventory level in the country.
Table 3: Per Kg Rates for Nutrients N P K S

19
The revision in the new subsidy rates is in line with changes in the input prices in the global markets.
Hence the industry is unlikely to face any inventory loss, due to reduction in the subsidy rates of P&K
nutrients.
Table 4: Per MT Subsidy Rate for different P & K fertilizers

20