Classification and Analysis of Market

The present practice of fertilizer distribution in India has a number of gaps and hence it is ill equipped to handle current shortages and surging demand. Shortages are being experienced and the farmer continues to face the problem of not getting urea at the right time and place which is hampering the growth of farmers. The consequences are: (a) Farmers of Punjab (and the country in general), who record the highest consumption of fertilizer within the country are not in good conditions economically (b) Increasing production of food-grains and other essential crops and making these available to the poor at affordable prices remains a challenge to Indian Government. The aim of our product is to fill up this gap with a fertilizer brand that is sensitive towards the farmer and would help them overcome their financial problems, as well as help the Indian Government in increasing production of food-grains and other essential crops and making them available to the poor at affordable prices

Gaps in the Existing Supply Chain

Estimation gap: Estimation of urea requirement is based on the collation of data by a large network of field personnel of the Government, with the assistance of the Lead supplier, which is vulnerable to inefficiencies in interpretation, collation, complexities and models used. Data moderation at the State and Central Governments inject further inaccuracies in the projections, with variations ranging as high as 22% as at the end of the Eighth Plan, leading to avoidable pressures on production, procurement, allocations, and planning of distribution strategies. Allocation gap: The Government machinery determines allocation. Besides, the aforementioned distortions in estimation, other extraneous factors that determine allocations are political pressures, farmer lobbies, manufacturers, and corporate consumers, etc. which adversely affect the resource allocation. Fragmentation of land holdings has resulted in greater complexities in the allocation of resources. Production gap Demand supply gap: The production of urea within the country is not sufficient to meet even the current requirement, let alone the future projections. In order to overcome the production gap, India has two alternatives live with the supply gap, or import. The data on urea demand gap is tabulated below.

Table: Urea Demand, Supply and Imports (million tonnes). Year 2004 2005 2006 2007 2008 2011(E) Demand 19.7 20.7 22.3 24.5 26.7 29.1 Supply 19.0 20.2 20.0 20.3 20.0 23.1 Imports 0.1 0.6 2.1 4.7 6.7 6.0

Micronutrient gap: The micronutrient deficiency in crops is growing rapidly both in extent and intensity with the Green Revolution and it has been observed that 47, 4.8, 11.5 and 4.0 percent soils are deficient in zinc, copper, iron and manganese respectively. The deficiencies of boron and molybdenum also have been recorded in many areas. The deficiency of zinc is the most widespread followed by that of iron, copper, manganese and boron and it is anticipated that with higher yields and more intensive agriculture, the micronutrient can be expected to deplete further. To enhance fertilizer-use efficiency under different cropping systems, continuous technological inputs are needed to make them cost-effective. Capacity gap: During the last two decades there has been no establishment of fertilizer plants, as the country opted to import rather than enhance production capacity. This option was exercised primarily because India did not have sufficient feed-stocks/raw material at low enough prices to make production costs competitive with world prices. India does not have sufficient gas, hence it has to import gas or use dual feedstock plants based on naphtha/gas. However naphtha is not energy efficient, and hence not cost efficient, as compared to gas based plants. Investment gap: Declining Government investments in setting up fertilizer plants, infrastructure required for fertilizer distribution systems-road, rail, ports, bridges, storages, etc, as also agriculture and allied activities in general are closely related to increasing subsidies. Price gap: While the demand for urea has increased over the years, whenever India enters the international market to import fertilizer, international prices fluctuate wildly, as these are not cost based but are determined by the forces of demand and supply. A look at the historical urea prices reveals that these have fluctuated from the lows $61per tonne to $86 per tonne in 1999 to the highs of $274 per tonne in 1975 and $251 per tonne in 1995 depending upon the quantities imported by India and China. Hence the country has to take a call whether to import at a price higher than the indigenous price of urea. Make or Buy decisions has been a longstanding challenge for the Government, and particularly so, since the 80s. Option of import is a luxury, as the international prices are continuously increasing and countrys foreign exchange is being used. The intensity of use of fertilizer is much lower than norms, and to attain our target of food security we need to monitor and deploy the resources, whether for buying or making urea within the country properly. Some of the issues that are identifiable are given in the flow chart below.

Vision of our Product

Our Product Urvara Aims at reducing these gaps. Over 80% of farmers are small and marginal farmers producing primarily for self consumption and left with little marketable surplus. For this class of farmers it is important to have low input prices, which we will introduce with our product.

The Fertilizer Sector

The history of the Indian fertilizer industry dates back to 1906, when the first fertilizer factory opened at Ranipet (Tamil Nadu). Since then, there have been major developments in terms of both the quantity and the types of fertilizers produced, the technologies used and the feedstocks employed. The fertilizer industry in India is in the core sector and second to steel in terms of investment. Prior to 1960/61, India produced only straight nitrogenous fertilizers [ammonium sulphate (AS), urea, calcium ammonium nitrate (CAN), ammonium chloride and single superphosphate (SSP)]. The production of NP complex fertilizers commenced in 1960/61. Currently, India produces a large number of grades of NP / NPK complex fertilizer. These include 162020, 20200, 28 280, 151515, 171717, 191919, 102626, 123216, 142814, 143514 and 1919 19. In addition, India produces various grades of simple and granulated mixtures. Table 6 shows the chronology of fertilizer production in the country. Chronology of fertilizer production in India Year of manufactur e 1906 1933 1959 1959 1959 1960 1961 1965 1967 1968 1968 1968 SSP AS Ammonium sulphate nitrate Urea Ammonium chloride Ammonium phosphate CAN Nitro phosphate DAP TSP Urea ammonium phosphate NPK complex fertilizers

Fertilizer product

Total number of units 65 10 No longer manufactured 29 1 3 3 3 11 No longer manufactured 2 6

The total indigenous capacity of N and P2O5 increased from 17 000 and 21 000 tonnes in 1950/51 to 12 276 million and 5 547 million tonnes in 2004/05.

PRODUCTION The domestic production of N and P2O5 was 29 000 and 10 000 tonnes, respectively, in 1951/52. By 1973/74, this had increased to 1.05 million tonnes N and 0.325 million tonnes P2O5. As a result of the oil crisis in the mid-1970s and the consequent sharp increase in the international prices of fertilizers, the Government of India encouraged investment in domestic fertilizer production plants in order to reduce dependence on imports. It introduced a retention price subsidy in 1975/76. The scheme led to a sharp increase in domestic capacity and production between the mid-1970s and the early 1990s. The total production of N and P2O5 rose from 1.51 million and 0.32 million tonnes respectively in 1975/76 to 7.30 million and 2.56 million tonnes in 1991/92. In 1992/93, phosphatic and potassic fertilizers were decontrolled. As a consequence, the rate of growth in the demand for these products slowed. The total production of N reached 10.6 million tonnes and that of P2O5 reached 3.6 million tonnes in 2003/04. There has been a shift in the product pattern over the years. SSP and AS dominated fertilizer production before the 1960s whereas urea and DAP dominate production at present. In 2003/04, urea accounted for 84.6 percent of total N production and di-ammonium phosphate (DAP) accounted for 59.9 percent of total P2O5 production (Table 7). Production by product 2003/04 Fertilizer products Ammonium chloride Ammonium sulphate CAN DAP NP / NPK complexes SSP Urea Total IMPORTS India imports mainly urea, DAP and potassium chloride (MOP). The country has almost reached self-sufficiency in urea production. As regards DAP, the level of imports was between 1.5 and 2 million tonnes in the 1980s and 1990s. A great deal of DAP capacity came on stream in the early 2000s. Consequently, the importation of DAP fell to less than 1 million tonnes after 2000/01. In 2003/04, DAP imports were 0.73 million tonnes. Imports meet the entire MOP requirement as there are no known natural potash deposits in the country. In 2003/04, MOP imports were 2.58 million tonnes In addition, India also imports a small quantity of mono-ammonium phosphate (MAP) and potassium sulphate (SOP) (65 000 and 10 500 tonnes, respectively, in 2003/04). Production ('000 tonnes) 79 601 141 4 709 4 507 2 483 19 038 31 558

CONSUMPTION Fertilizer consumption was less than 1 million tonnes before the mid-1960s. With the introduction of high-yielding variety (HYV) seeds, there was acceleration in the growth of fertilizer consumption. It reached 12.73 million tonnes in 1991/92 as against 0.78 million tonnes in 1965/66. After the decontrol of P and K fertilizers the growth in consumption slowed. The highest consumption was recorded in 1999/2000 (18.07 million tonnes of nutrients). Since then, the growth in consumption has been erratic. In 2003/04, total nutrient consumption was 16.8 million tonnes. The consumption of N, P2O5 and K2O was 11.08, 4.12 and 1.60 million tones, respectively. Table 8 shows the production, importation and consumption of N, P2O5 and K2O from 1999/2000 to 2003/04. CONSUMPTION AT STATE LEVEL The consumption of fertilizers varies significantly from state to state. The all-India per-hectare consumption of total nutrients was 89.8 kg in 2003/04. While the North and South zones have a consumption of more than 100 kg/ha, in the East and West zones the consumption is lower than 80 kg/ha. Among the major states, the per-hectare consumption is more than 100 kg in West Bengal (122 kg), Haryana (167 kg), Punjab (184 kg), Uttar Pradesh and Uttaranchal (127 kg), Andhra Pradesh (138 kg) and Tamil Nadu (112 kg). In the remaining states, the consumption per hectare is lower than the all-India average. Table 9 shows fertilizer consumption per hectare of the gross cropped area in the major states. Production, importation and consumption of fertilizers Year Fertilizer Item N Production Importation Consumption P2O5 Production Importation Consumption K2O Production Importation Consumption 1999/2000 10 873 856 11 593 3 448 1 534 4 798 1 774 1 678 2000/01 10 943 164 10 920 3 734 437 4 215 1 594 1 568 2001/02 '000 tonnes 10 690 283 11 310 3 837 494 4 382 1 697 1 667 10 508 135 10 474 3 904 228 4 019 1 568 1 601 10 557 205 11 076 3 617 372 4 124 1 553 1 598 2002/03 2003/04

NPK CONSUMPTION RATIO Because the deficiency of N is widespread, the N:P2O5:K2O use ratio has favoured N. This ratio narrowed from 8.9:2.2:1 in 1961/62 to 5.9:2.4:1 in 1991/92. After decontrol of P and K fertilizers in 1992/93, the ratio widened to 9.7:2.9:1 in 1993/94. Despite the introduction of a price concession on P and K fertilizers and other measures taken to increase their consumption, the ratio remained wide and in 1996/97 it was 10:2.9:1 Subsequently it has tended to improve, reaching 6.9:2.6:1 in 2003/04. Consumption of fertilizers by state 2003/04 Zone/State N P2O5 (kg/ha) East zone Assam Bihar & Jharkhand Orissa West Bengal North zone Haryana Himachal Pradesh Jammu & Kashmir Punjab Uttar Pradesh & Uttaranchal South Zone Andhra Pradesh Karnataka Kerala Tamil Nadu West Zone Chhattisgarh Gujarat Madhya Pradesh Maharashtra Rajasthan All India 49 22.2 68.7 26.7 63.8 102.9 125.6 32.6 50 139.6 91.2 60 84.1 40.1 28.3 59.7 38 30.7 64.3 32.8 38.9 29.3 59.2 15.8 12.7 8.7 8.5 33.4 32 38.9 9.2 18.1 40 29.4 26.1 35 19.6 12.9 25 17.1 11.9 23.9 19.5 18.8 10.6 22.1 11 11.7 3 6.3 25.2 5.3 2.6 7.6 3.2 4.5 6.1 19.2 17.7 15.2 22.4 27.8 4.4 3.9 6.9 2.7 7.9 0.6 8.5 75.8 46.6 80.5 41.4 122.4 140.1 167.1 49.4 71.4 184 126.7 105.4 136.8 74.9 63.6 112.5 59.4 46.5 95.1 55 65.7 40.5 89.8 K2O N + P2O5+ K2O

Target Market
Our target market will be the North Zone, which includes Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Uttar Pradesh & Uttaranchal. As they are the states that have the largest consumption of fertilizers and also are the major importers of fertilizers. With most of the farmers living in poor condition, we will make it a point to keep our costs low and price them according to what the farmers can spend and get the most out of it Consumption by Product While India uses many types of fertilizers, urea accounts for most of the consumption of N and DAP for most of that of P2O5. Urea accounts for 82 percent of the total consumption of straight N fertilizers. Other straight N fertilizers, such AS, CAN and ammonium chloride account for only 2 percent. The share of N through DAP and other complex fertilizers is about 16 percent. DAP accounts for 63 percent of total P2O5 consumption and other complex fertilizers for 27 percent. Single superphosphate (SSP) accounts for 10 percent of total P2O5 consumption. Figure 4 shows the shares of the various fertilizers in total N and P2O5 consumption in 2003/04.

Share of fertilizers in total N and P2O5 consumption, 2003/04

Positioning Strategy
Organizational Outputs
Up-to-date technical information Effective distribution networks Set up fertilizer suppliers association Reduced prices of fertilizer

1: Strategies to update technical information

We will invest in regional testing capabilities to improve our products effectiveness and

differentiate it from the rest of the players We will update the Technical information on soil fertility at regular intervals, to make sure we cater to the changing needs of the farmers and soil. We will develop Principles of soil fertility management and disseminate it among the farmers. We will also hold workshops for farmers to teach them how to recognize nutrient and pH deficiencies Activities for investing in regional testing capabilities Upgrade equipment in main research stations Adopt internationally acceptable testing protocols Upgrade professional skills of technicians Ensure regular supplies of reagents Activities for updating technical information on soil fertility Update old soil maps Perform comprehensive nutrient analysis of different soil series Conduct fertilizer trials Broaden range of products on market Activities for developing principles of soil fertility management Synthesize extension messages (doses, application methods/crop/soil type) Disseminate appropriate messages widely to farmers Activities for teaching farmers recognition of nutrient and pH deficiencies Train farmers on use of leaf color charts Train farmers to use vegetation types as indicators

2: Strategies & actions for effective distribution networks

We will establish Wholesale and retail linkages Appoint wholesalers at major centers We will train traders on marketing & business skills Carry out needs assessment Design courses and deliver them Train farmers on group marketing Assess functional capacity of coops Design courses and deliver them Distribute Pre-packed fertilizer in small labeled bags Develop standards & advertise small packs

3: Actions for forming a fertilizer suppliers association

Convene suppliers meeting to discuss constitution Register the association Establish links with international associations

4: Strategies & actions for reducing prices of fertilizer

- We will use cheaper modes of freight to reduce transportation cost - Utilize rail freight and utilize back-hauling - We will encourage farmers to purchase in bulk by promoting bulk orders - Consolidate farmer demand orders - We will establish localized blending plants - Monitor distribution of blends - Establish in-house analytical facilities - Conduct routine soil testing before blending

The Product
Feautres of URVARA(the crop booster):

Urvara is the only renewable fertilizer that can be used in the same manner as widely-used mono-ammonium phosphate or coated products, with the added benefit of high levels of slowrelease magnesium. Theres no need to change equipment or application methods because Urvara can be substituted for any existing phosphorus source. Its crystalline structure allows it to form a completely new chemistry for our industry. Yet, unlike slow-release products, it is far more predictable as it is not affected by excessive moisture, bacteria and temperature changes. And its longevity is as reliable as coated products. Your plants will see the difference and the environment will thank you for both what its made from and how it releases. The manufacturing of Urvara is unique, too. Compared to conventional fertilizer manufacturing, the production of Urvara is highly energy efficient and is produced without adding greenhouse gases to the atmosphere. No other commercially available fertilizer has renewable and environmental safety attributes comparable to Urvara. Urvaras benefits include slow release and ease of handling. The prill is a hard crystalline material suitable for broadcasting, top dressing or incorporation.

Features
Complete Plant Food
Urvara Organic is a perfect combination of Natural NPK, more than 60 micro nutrients plus Amino Acid essential for plants derived from a 100% natural fermentation of Fish, Kelp and Guano Extracts through Natures Beneficial Microorganism. It is processed under rigid quality control to retain natures valuable nutrients. It also contains Plant Growth Hormones (Auxins, Cytokinins, and Giberillins) plus Alginates and Carrageenan from tropical seaweeds and other rich sea minerals important to plant growth and development.

Stimulates The Natural Plant Development

Urvara Organic stimulates the natural development and growth of plants by increasing the chlorophyll production level. Urvara Organic acts as the plants catalyst in utilizing more effectively the suns energy, hence promoting stronger and healthier plant growth.

Nutrients For The Soil

Feeding the plants without concern for the soil is like building a house on sand, soil is very important; it is one of the essential food source of plants. Artificial fertilizers offer short term impressive results do so in the expense of the long term health of the soil. Urvara reactivates the good micro organism in the soil and gives improvements on the eco-system of the plants. It creates an extended root system giving plants greater access to nutrients and water in the soil hence, giving long term health benefits for the plants.

Natural Resistance
Urvara Organic stimulates the activity of beneficial soil micro-organisms. This is the pesticidal property of seaweeds and guano which make plants resistant from stress brought about by pests and disease. Features & Benefits:

Easy To Spray - Chelated - Sticker! No Burning No Overdose - Non Toxic! Speeds Germination And Growth! Fast Absorption!, - Increases Your Yield!, - Increases Quality! Systematic Acquired Resistance To Pests!, - Cuts Disease! Cuts Plant DamageWind & Rain!,-Helps Protect From Low Rainfall! Regenerates & Detoxifies Your Soil!,- Restores Soil Fertility

Urvara Organic Premium Ingredients

1. Natures Beneficial Microorganism

Increases Nitrogen Formation

Fixation,

Mineralization

and

Humus

Enhances Breakdown Of Organic Matter and Fast Decomposition Kills Antibiotics and Bioactive compound

2. Fish Emulsion from Fresh Fish Extract

A Tremendous Source Of Nutrition and contains Substantial Amount of Proteins Balances Nitrogen Provision and Full Spectrum fertility All 18 Nutrients Necessary for the plant growth

3. Fresh Tropical Seaweeds Extract

Loaded With Beneficial Micronutrients Contains Plant Growth Hormones (Auxins, Cytokinins, and Giberillins) With Natural Sticker from Carageenan and Alginates Helps To Protect Plants In Times Of Low Rainfall Permits Roots To Access Low Water Levels, Increases Water Retention Helps To Protect Plants In Times Of Low Rainfall Speeds Up Germination, Increases % Success Of Germination, Speeds Up Growth Reduces Nutrient Leaching, Improves Soil Fertility Protects Plants From Stress Wind & Rain

4. Bat Guano Extract

Source Of Essential Nitrogen Essential Phosphates, Potassium& Sulfates Anti Pest

Assists In Soil Regeneration

5. Glucose - Raw Molasses

Quick source of Energy for Microbes Significant Source of Potash and sulfur Ability to Work as a Chelating Agent Converter of Some Natural Nutrients Natural & Organic Source of Micronutrients Supplying Nutrients for the Soil and the Plants through Root System

Innovative value added quality of URVARA:

Pesticide added fertilizer: We will provide fertilizers with the quality of pesticides to users. Our fertilizer will have affinity to kill pest, weeds, bugs, and suckers like cuscuta; actually cuscuta is a plant sucker, it absorbs vital nutrients which are needed for the plant metabolism. Our products have quality to kill these suckers. Farmers have no need to spray insecticides because it will be already present in our fertilizer. Restrict new pest breakage: Our fertilizer will prevent new pest breakage. Some time, it happens that new pests appear in the life cycle of the plant. It happens due to excessive use of pesticides. But after using our fertilizers there will be no need of extensive pesticide.

Natural resistance: Innovative special Organic compound of URVARA stimulates the activity of beneficial soil micro-organisms. This is the pesticidal property of seaweeds and guano which makes plants resistant to stress brought about by pests and disease.

Chelation affinity of URVARA:

URVARA will have the greatest quality of chelate formation. Chelation of compound will restrict compound to be independent. Due to that, free leakage of fertilizer compound will be stopped up. Plant can absorb full compound easily without any constraint. Eco-friendly product: Most of the fertilizers do not easily degrade in the environment after completing their work. It results in environmental pollution and enters the food cycle through herbivores that infect human beings also in the top food level strata. Here, we will provide fertilizer which will degrade easily after completing its work.

Price of our Products:

Types of our product and its price:

SERIAL NO [A] 1 2 3 4 5 6 [B] 7 8 9 10 11 12 13 [C] 14 15 16 17 18 19 [D] 20 21 22 [E] 23 24

PRODUCT U.UREA U.AS U.DAP U.ASP U.NPK 12:32:16,10:26:26 U.GYPSUM U.UREA U.PHOS U.CAN U.MOP U.SSP(G) U.SSP(P) U.DAP CH.UREA CH.DAP CH.MOP CH.NPK 12:32:16 CH.SSP(G) CH.SSP(P) IPL UREA IPL MOP IPL DAP RCF UREA RCF SUFLA15

FARMER PRICE Per Bag 250.10 540.80 470.10 325.85 400.15 377.05 Area wise rate 250.10 269.88 510.00 230.39 195.20 176.20 480.10 250.10 470.10 230.39 370.05 199.20 170.20 243.10 239.39 492.13 243.10 258.35

25 [F] 26 27 [G] 28 29 30

RCF DAP NIR SSP-G NIR SSP-G LIBERTY SSP(P) LIBERTY SSP(G) LIBERTY NPK(20:10:10)

440.13 190.20 188.20 168.20 179.20 325.00

Service and customers relationship:

Our company will provide free soil analysis to their fields .it will give information to the

farmers that up to what amount of npk (nitrogen: phosphorus: potassium) is needed for the studied field . Free knowledge about various fertilizers and its requirements upto what concentration. Providing free sample of product by which they can test our products performance. Direct customer relation to know about the product effectiveness. If any problem occurs, customer can easily contact our CRM department. Home delivery of the product for easy access of URVARA. We will also give information to customer about modified high yield seeds. Our company will provide self spraying of fertilizer in large crop farms, if customer wants to use this service. We will make a outlet named HARYALI which will give information about our innovative product and how to utilize it to the farmers.