PRESENTATION ON FERTILISER

INDUSTRY OF INDIA
 Presentation outline
 Introduction
 Global production and consumption of fertilizers
 Indian fertilizer industry
 Indian production ,consumption & import trend.
 Major companies
 Policies (subsidies & regulations)
 Strategies for industry expansion
 INTRODUCTION
 India is the third largest producer and consumer of fertilizer in
the world.

 Indian fertilizer industry started in 1906 with SSP production

facility at Ranipet near Chennai

 Started operating in a big scale since 1940s, when the

Fertilizer & Chemicals Travancore of India Ltd. and the
Fertilizers Corporation of India were set up in Kerala and Bihar

 The private sector produced 44.73 % of nitrogenous fertilizers

and 62.08 % of phosphatic fertilizers in 2006-07.

 Total production of fertilizers in india-206.5mt .

 Contd….
 The production of urea in India has reached
near self-sufficiency. The requirement of the
nitrogenous fertilizers is met through the
indigenous industry
 In the case of phosphatic fertilizers, the raw
materials and intermediates are imported in
large scale.
 . The requirement of potash (K) is met entirely
through imports. No fertilizer unit of India has
any reserve of potash.
Global
production &
consumption of fertilizers
 Indian fertilizer industry
 65 large-sized fertilizer plants in India .
 32 units-urea
 20 units-DAP & complex fertilizers
 13 units-ammonium phosphate & CAN
 Nitrogenous fertilizers-88% urea ,10% DAP & 2%
ammonium fertilizers.
 co2 emmission from fertilizers

0.7, 42%
india
global average
0.95, 58%
Indian
production,
consumption & import
trend
 Fertilizer use and crop production
in India
Figure 2: Crops wise consumption of Fertilizer in India
Others
24% 5%
8%
Fruits
3%
2%
9%
V5%
egetables
3%4%
4%
Cotton Rice
2.00%3%
5% Wheat
Sugarcane Rice Food Grains
5% 37% Pulses
Oil Seeds
Oil Seeds
9% Sugarcane
Cotton
Rice 37%
Pulses Vegetables
Wheat 24%
3% Fruits
Food Grains 8%
Pulses Food G3%
rains Others
8%
Oil Seeds 9%
Sugarcane 5%
Wheat
Cotton 3%
24%
Vegetables 4%
 PRODUCTION AND IMPORT OF FERTILISERS(IN '000'T)
PRODUCTION AND IMPORT(IN

12000

10000
N Production
'000 TONNES)

8000 N Imports
P2O2 Production
6000
P2O2 Import
4000 K2O Production

2000 K2O Import

0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
YEARS
 CONSUMPTION OF CHEMICAL FERTILISER( LAKH TON)

160
CONSUMPTION IN LAKH

140
120
100 Nitrogenous(N)
TON

80 Phosphatic(P)
60 Potassic(K)
40
20
0
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
YEAR
 "000" tonnes

an

500
1000
1500
2000
2500
3000

0
dh st
ra at
es
pr
ad
es
h
pu
nj
ta ab
m
iln
ad
u
ha
ut ry
ta an
rp a
ra
de
sh
bi
ka har
r
m nat
a
states
ah
ar ka
as
ht
ra
m
ad
"N" consumption

hy guj
ap ra
ra t
de
ra sh
ja
w st
es han
tb
en
ga
l
2007-08
2006-07
 p consumption (000 tonnes)
an
d hra

0
pra

100
200
300
400
500
600
700
800
900
de
sh
pu
nj
tam ab
iln
ad
u
ha
utt rya
ar na
pr
ad
es
h
bih
ka ar
rna
ma tak
ha a
ras
s ta te s htr
a
ma
dh gujr
ya at
pra
de
p c o n s u m p tio n

raj sh
as
we than
st
be
ng
al
as
sa
m
p 2 o 5 (2 0 0 6 -0 7 )
P 2 O 5 (2 0 0 7 -0 8 )
 "000" tonnes
an
dh
ra
pr

0
100
200
300
400
500
600
700
800
900
ad
es
pu h
ta njab
m
iln
a
ha du
ut
ta rya n
rp
ra a
de
sh
b
ka iha
r r
m na t
ah ak
ar a
s tate s as
ht
m ra
ad
hy g u
ap jrat
ra
d
ra e sh
j
we a sth
"k" fe rtilize r consumption

st a
be n
ng
a
as l
sa
m
2007-08
2006-07
 consumption of
N,P,K(kg/ha)

0
20
40
60
80
100
120
140
1951-52
1957-58
1961-62
1965-66
1969-70
1973-74
1977-78
1981-82

ye a rs
1985-86
1989-90
1993-94
1997-98
2001-02
2005-06 (P)
con su m p tion of N ,P ,K (kg /h a)

c ons um ption of N,P ,K (k g/ha)

 andhra pradesh
% shares of consumption of fertilizers in 2006-07
punjab
tamilnadu
7%
1% 12% haryana
5%
uttar pradesh
6% 8% bihar
7% karnataka
6%
maharashtra
6% gujrat
11%
madhyapradesh
7% 19% rajasthan
5%
west bengal
assam

% shares of states in fertilizer consumption in 2007-08

andhra pradesh 2667.58
punjab 1697.76
7% 1% 13% tamilnadu 1075.65
5%
haryana 1230.36
6% 8% uttar pradesh 3755.92
bihar 1205.64
8% 5% karnataka 1507.38
6% maharashtra 2325.85
11% gujrat 1623.26
madhyapradesh 1301.7
7% 17% rajasthan 986.7
6%
west bengal 1374.74
assam 213.94
 MAJOR PLAYERS:
 The public sector companies in Indian fertilizer market are
listed below:
 · Fertilizer Corporation of India Limited (FCIL)
 · Hindustan Fertilizer Corporation Limited (HFC)
 · Pyrites, Phosphates & Chemicals Limited
 · Rashtriya Chemicals and Fertilizers Limited (RCF)
 · National Fertilizers Limited (NFL)
 · Projects &Development India Limited (PDIL)
 · The Fertilizers and Chemicals Travancore Limited (FACT)
 · Madras Fertilizers Limited (MFL)
 · FCI Aravali Gypsum & Minerals India Limited, Jodhpur
 Some Private fertilizer Companies
 The Scientific Fertilizer Co Pvt Ltd
 Coromandel Fertilizers
 Deepak Fertilizers and Petrochemicals Corporation Limited
 Apratim International
 Aries AgroVet
 Devidayal Agro Chemicals
 DSCL
 Gujarat State Fertilizers &Chemicals Limited
 Tata Chemicals Limited
 Chambal Fertilizers
 Nagarjuna Fertilizers and chemicals limited
 Godavari Fertilizers and Chemicals limited
 Zuari Industries limited
 CHALLENGES IN FERTILISER
INDUSTRY
 Gap between demand and supply
 Greater dependency of country on imports( also
feedstock)
 Unable reduce burden of government in
subsidiary rates
 Infrastructural bottlenecks
 Uncertainties in government policies
 Small size of older plants
 CURRENT SCENERIO
 Most companies are expecting approval for their
huge capital expenditure plans from department
of fertilizer and industry
 Indian fertilizer companies joined hands with
Jordan, Senegal, Oman, Morocco, Egypt etc
 The demand for fertilizer has increased by 5%
(21 June 2010, Rashtriya Chemicals and
fertilizer)
 10% increase in Urea price in April 2010
 Fertilizer subsidy has taken largest share for
58.7% of total subsidies in 2008-09
 production MT/annum
20
08

0
10
20
30
40
-0
20 9
10
-1
20 1
12
-1
20 3
14
-1
20 5
16
-1
20 7
18
-1
20 9
20
-2

ye a rs
20 1
22
-2
20 3
24
-2
20 5
26
-2
20 7
28
-2
9
p ro jec te d p ro d u c tio n o f u re a

produc tion m illion M T/annum

 Fertilizer subsidy
 In both developed and developing countries.
 Objectives-
 Self sufficiency
 making available fertilizers to farmers at affordable prices
and to promote balanced application of three main
fertilizer nutrients viz. nitrogen, phosphorus and potash.
 To encourage domestic production by allowing fertilizer
producer a reasonable returns.
 Trends in fertilizer subsidies
Retention price cum subsidy scheme
 Fertilizer control order,1985
 Nov 1977-nitrogenous fertilizers
 Feb 1979-complex fertilizers
 To encourage green revolution
 Subsidy=retention price*-notified sale price
 Retention price-normative cost of production of the urea as
determined by the Government plus 12 per-cent post tax
return on net worth.
 Freight subsidy
 Farm gate price of urea is amongst the lowest in the
region and is heavily subsidised.
 Retention price of controlled fertilizers is fixed in every
3 years.
 1992-govt. decontrolled import of complex fertilizers
(DAP & MOP).
 For each decontrolled fertilizer, the Maximum Retail
Price (MRP) is indicated by Central Government
except for Single Super Phosphate, the MRP of which
is indicated by each State/UT Government.
 New fertilizer pricing policy
 Started from 1 April 2003
 Objective-encouraging efficiency based fertilizer pricing
 High Powered Fertilizer Pricing Policy Review Committee (HPC)
 At present, the maximum retail price (MRP) of urea is Rs. 483 a
quintal, while DAP costs Rs. 935 a quintal and MOP Rs. 445.50 a
quintal.
 First 2 stages-prices was decided on the basis of energy
consumption
 Third stage(2006-10)-conversion of all farms into natural feed
stock.
 LIST OF RECENT POLICIES
1. concession scheme for SSP,DAP,MOP,SSP,TSP &
indigenous Ammonium Sulphate.
2. Policy for encouraging production and availability of
fortified and coated fertilizers.
3. Nutrient based pricing of subsidized fertilizers
4. Policy on P & K fertilizers
5. Policy for uniform freight subsidy on all fertilizers
6. Policy for new investments in urea sector and long term
off take of urea from joint ventures abroad
 NUTRIENT BASED SUBSIDY
 NBS policy on decontrolled Phosphoric and Potassic
fertilizer w.e.f 1st April ,2010.
 Fix subsidy on N,P,K,S for 2010-11
 Additional per ton subsidy for subsidized fertilizer
carrying other secondary nutrients and micronutrients.eg
in Zn,Boron.
 Constitute an Inter Ministerial Committee under
chairmanship of Secretary of fertilizer.
 Retail prices fixed by companies at farm gate level
 10% increase in price of urea (Rs 4830 to Rs 5310)
 % shares in fertilizer subsidy
ut
ta
an r p

0
5
10
15
20
25
dh ra
ra de
p s
m rad h
m a
ad ha esh
hy ras
a ht
pr r a
ad
es
pu h
nj
a
gu b
ka jar
r a
w nat t
es ak
tb a
en
ga
bi l
h
ha ar
r
ta yan
m
iln a

states
india

ra adu
ja
st
ha
or n
is
s
as a
sa
m
ke
ra
ja la
m o
hi m th
m u e
ac ka rs
ha sh
lp m
r a ir
de
sh
% shares of major states in total fertilizer subsidy in

2007-08
1999-00
1992-93
 sta te w is e fe r ti liz e r u se / h a o f g r o ss c r o p p e d a r e a b y s iz e o f h o ld i n
180
160
140
120 m a r g in a l
100
s m a ll
cropped area
fertilizer use/ha of gross

80
s e m i m e d iu m
60
40 m e d iu m
20 la r g e
0 a ll h o u s e h o ld
p u n ja b m a d h y a m a h a r a s hr tar aja s t h a wn e s t b e n g aA l . P .
p ra d e s h
m a jo r s t a t e s
 c o n c e n tra tio n o f fe rtiliz e r s u b s id y o n m a jo r c ro p s in
20000
in d ia
total fertilizer

15000
used(000
tonnes)

10000
5000
total fertiliz er us e
0

jra
y

nd n

ar
ga at

ize
al ers
ps
dd

jow t
gr cotto
ne

nu
su he

ba
ma
oth
cro
pa

rca
w

ou

m a jor c rops
 % share in total subsidy
paddy

26% wheat
32% sugarcane
cotton
ground nut
2%
2% jowar
3%
3% bajra
6% maize
6% 20%
others
subsidies in crore rupees subsidies on indegenous and imported fertilizers

10000
9000
8000
7000 Total Subsidy Subsidy on
6000 Indigenous fertilizers
5000
4000 Total Subsidy subsidy on
3000 imported fertilizers
2000
1000
0
r

93

99
87

01
a

-9
-8

-9

-9
ye

6-

2-

8-

0
88

90

94

96

-2
8

9
19

19

19

19
19

19

19

00
20
years

 Source-department of
fertilizers (government of
India)
 susidy in crore rupees

0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
ye
19 a r
85
- 86
19
86
- 87
19
87
- 88
19
88
- 89
19
89
- 90
19
90
- 91
19
91
- 92
19
92
- 93
19
93
-

years
19 94
94
-
19 9 5
95
-
19 9 6
96
-
19 9 7
97
-
19 98
9
Total Subsidy on fertilizers

19 8-
99 99
-
20 2 0
00 00
-2
00
1
Total Subsidy
Fertilizer regulations:
 Fertilizer control order
 Compulsory registration of fertilizer makers, importers
and sellers.
 Specifications for all fertilizers produced, imported or
sold in India.
 A set of regulations on the manufacture of fertilizer
mixtures.
 Packing and labelling of fertilizer bags.
 Appointment of enforcement agencies and creation of
quality control laboratories.
 Banning of the manufacture or import and sale of non-
standard, spurious or adulterated fertilizers.
Central fertilizer quality control and
training institute
 Undertaking inspection and analysis of imported
and indigenous fertilizers
 Standardization and development of method of
analysis
 Training of fertilizer enforcement officers and
analysts.
 Acting as a referee laboratory
 Providing technical guidance to the Central and
State governments on Fertilizer Quality Control
Laboratories.
 Fertilizer movement control order(1973)
 STRATEGIES FOR INDUSTRY
EXPANSION
 Modernization and revamping of existing
fertilizer units.
 Reviving some of the closed fertilizer units
 Alternative sources for urea production
 Establishment of joint ventures where
cheaper raw materials can be procured
 Joint ventures for phosphoric acid
procurement
THANK YOU