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Indian fertilisers

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To produce more food grains, soil nutrients have to be provided by fertilizers as an input.

To produce more food grains, soil nutrients have to be provided by fertilizers as an input.

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  • 1. FERTILISER INDUSTRY OF INDIA
  • 2.  Fertilizers(American English) or fertilisers (British English) are compounds given to plants with the intention of promoting growth.  Applied either via the soil, for uptake by plant roots, or by foliar feeding, for uptake through leaves.  Organic (composed of organic matter, i.e. carbon based), or inorganic (containing simple, inorganic chemicals).  Naturally-occurring compds such as peat, or made through natural processes (such as composting) or chemical processes (such as the Haber process).
  • 3.  Fertilizers typically provide, the three major plant nutrients (nitrogen, phosphorus, and potassium).  Secondary plant nutrients (calcium, sulfur, magnesium).  Trace elements (or micronutrients) with a role in plant nutrition: boron, chlorine, manganese, iron, zinc, copper and molybdenum.
  • 4. 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
  • 5. 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 .
  • 6. 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.
  • 7. Global production & consumption of fertilizers
  • 8. 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.
  • 9. co2 emmission from fertilizers 0.7, 42% 0.95, 58% india global average
  • 10. Indian production, consumption & import trend
  • 11. Fertilizer use and crop production in India 24% 8% 3% 9% 5% 3% 4% 2.00% 5% Rice 37% Wheat 24% Food Grains 8% Pulses 3% Oil Seeds 9% Sugarcane 5% Cotton 3% Vegetables 4% Figure 2: Crops wise consumption of Fertilizer in India Rice 37% Wheat 24% Food Grains 8% Pulses 3% Oil Seeds 9% Sugarcane 5% Cotton 3% Vegetables 4% Fruits 2% Others 5% Rice Wheat Food Grains Pulses Oil Seeds Sugarcane Cotton Vegetables Fruits Others
  • 12. PRODUCTION AND IMPORT OF FERTILISERS(IN '000'T) 0 2000 4000 6000 8000 10000 12000 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 YEARS PRODUCTIONANDIMPORT(IN '000TONNES) N Production N Imports P2O2 Production P2O2 Import K2O Production K2O Import
  • 13. CONSUMPTION OF CHEMICAL FERTILISER( LAKH TON) 0 20 40 60 80 100 120 140 160 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 YEAR CONSUMPTIONINLAKH TON Nitrogenous(N) Phosphatic(P) Potassic(K)
  • 14. "N" consumption 0 500 1000 1500 2000 2500 3000 states andhra pradesh punjabtam ilnadu haryana uttarpradesh biharkarnataka m aharashtra gujrat m adhyapradeshrajasthan w estbengal states "000"tonnes 2006-07 2007-08
  • 15. p consumption 0 100 200 300 400 500 600 700 800 900 andhrapradesh punjabtam ilnadu haryana uttarpradesh biharkarnataka maharashtra gujrat madhyapradeshrajasthanwestbengal assam states pconsumption(000tonnes) p2o5(2006-07) P2O5(2007-08)
  • 16. "k" fertilizer consumption 0 100 200 300 400 500 600 700 800 900 andhra pradeshpunjabtam ilnaduharyana uttarpradesh bihar karnataka m aharashtra gujrat m adhyapradeshrajasthan westbengalassam states "000"tonnes 2006-07 2007-08
  • 17. 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 1985-86 1989-90 1993-94 1997-98 2001-02 2005-06(P) years consumptionof N,P,K(kg/ha) consumption of N,P,K(kg/ha)
  • 18. % shares of consumption of fertilizers in 2006-07 12% 8% 6% 6% 19% 5% 7% 11% 7% 6% 5% 7% 1% andhra pradesh punjab tamilnadu haryana uttar pradesh bihar karnataka maharashtra gujrat madhyapradesh rajasthan west bengal assam % shares of states in fertilizer consumption in 2007-08 13% 8% 5% 6% 17% 6% 7% 11% 8% 6% 5% 7% 1% andhra pradesh 2667.58 punjab 1697.76 tamilnadu 1075.65 haryana 1230.36 uttar pradesh 3755.92 bihar 1205.64 karnataka 1507.38 maharashtra 2325.85 gujrat 1623.26 madhyapradesh 1301.7 rajasthan 986.7 west bengal 1374.74 assam 213.94
  • 19. 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
  • 20. 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
  • 21. 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
  • 22. 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
  • 23. projected production of urea 0 10 20 30 40 2008-092010-112012-132014-152016-172018-192020-212022-232024-252026-272028-29 years productionMT/annum production million MT/annum
  • 24. 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.
  • 25. 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
  • 26.  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.
  • 27. 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.
  • 28. 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
  • 29. 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)
  • 30.  source-government of India % shares of major states in total fertilizer subsidy in india 0 5 10 15 20 25 uttarpradesh andhrapradesh m aharashtra m adhya pradeshpunjabgujarat karnataka w estbengalbiharharyana tam ilnadurajasthanorissaassam keralaothers jam m u kashm ir him achalpradesh states %sharesinfertilizersubsidy 1992-93 1999-00 2007-08
  • 31. state wise fertilizer use /ha ofgrosscropped area by size ofholding,2001-02 0 20 40 60 80 100 120 140 160 180 punjab madhya pradesh maharashtra rajasthan westbengal A.P. major states fertilizeruse/haofgross croppedarea marginal small semimedium medium large allhousehold
  • 32. concentration of fertilizer subsidy on major crops in india 0 5000 10000 15000 20000 paddywheat sugarcane cotton ground nut jowar bajra m aizeothersallcrops major crops totalfertilizer used(000 tonnes) total fertilizer use
  • 33. % share in total subsidy 32% 20%6% 6% 3% 3% 2% 2% 26% paddy wheat sugarcane cotton ground nut jowar bajra maize others
  • 34.  Source-department of fertilizers (government of India) subsidies on indegenous and imported fertilizers 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000year1986-871988-891990-911992-931994-951996-971998-992000-2001 years subsidiesincrorerupees Total Subsidy Subsidy on Indigenous fertilizers Total Subsidy subsidy on imported fertilizers
  • 35. Total Subsidy on fertilizers 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 year1985-861986-871987-881988-891989-901990-911991-921992-931993-941994-951995-961996-971997-981998-99 1999-2000 2000-2001 years susidyincrorerupees Total Subsidy
  • 36. Fertilizer regulations:
  • 37. 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.
  • 38. 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)
  • 39. 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