Indian Fertilizer Industry has been witnessing much changes on part of production technology,feed stock, and regulatory policy. So far this industry has been merely logistics and distribution management and not other functions needed much concern because of regulated price. Till 2010, NPS III had been in force and had to be lifted according to phase wise deregulation of the sector but since new policy has not been finalised, same has been in continuation. This presentation includes current scenario of the industry, Porter's analysis and SWOT analysis of IIFCO to understand more the Indian fertilizer industry.

1. STRATEGIC ANALYSIS OF
INDIAN FERTILISER
INDUSTRY
By
Course: Agri-Input Marketing
Bidhu Bhushan Binit
PGDM(2011-2013)
(group leader)
Indian Institute of Plantation
Group No:05
Management, Bangalore.

2. FERTILIZERS
• India is the third largest producer and consumer of
fertilizer in the world.
Introduction
• Indian fertilizer industry started in 1906 with SSP
Industry Analysis production facility at Ranipet near Chennai.
• Started operating in a big scale since 1940s, when the
Major Challenges Fertilizer & Chemicals Travancore of India Ltd. and the
Fertilizers Corporation of India were set up in Kerala
Current scenario and Bihar
SWOT Analysis • 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 .
• 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.

3. Main fertlizers produced in
India
Introduction • Urea
Industry Analysis •Di-ammonium Phospahte
Major Challenges •Complexes
•Single Super Phosphate
Current scenario
SWOT Analysis

4. Porter's Model on Fertilizers
Introduction
Industry Analysis
Major Challenges
Current scenario
SWOT Analysis

5. Porter Analysis
Introduction THREAT OF NEW ENTRANTS:- LOW
Industry Analysis Entry barriers are high
Major Challenges
1. Supply side economies of scale- Present fertilizer
Current scenario industries both public and private sector enjoy the
benefit of scale economies of scale. The cost per unit
SWOT Analysis is low.
2. Demand side benefits of scale-the buyers i.e.
farmers are having faith on the fertilizers they are
using. They communicate to each other the results of
fertilizers. Hence always has tendency to buy what
others are buying. Hence for new entrant it is difficult
to break this attachment.
3. Customer switching costs- It is high. When
farmers are using any fertilizer, they are well known
about the results, also for that fertilizers they have tie
up with the o-operative societies, they can get it on
credit basis also.

6. Porter Analysis
RIVALRY –
Introduction
Industry Analysis
• High fixed costs
Major Challenges • Negligible perceived differences between the
brands
Current scenario • Prices fixed – price competition impossible
• FFBL has sole DAP production facility
SWOT Analysis • Engro imports and sells DAP
• A little competition between these two

7. Porter Analysis
Introduction
POWER OF SUPPLIERS-LOW
Industry Analysis
• Gas subsidies given by government
Major Challenges • Long term agreements
• Firms can’t influence market prices
Current scenario
• Hence supplier power is very low
SWOT Analysis

8. Porter Analysis
Introduction THREAT OF SUBSTITUTES-LOW
Industry Analysis
• No proper substitutes
Major Challenges • Natural fertilizers can be used but not as effective
• Animal manure not suitable for commercial
Current scenario production
SWOT Analysis

9. Porter Analysis
Introduction BARGAINING POWER OF BUYERS- VERY LOW
Industry Analysis
• No alternate for urea – have to buy it irrespective
Major Challenges of prices
• Urea used as an alternate for DAP
Current scenario • When DAP prices increase, urea sales increase
and DAP sales fall
SWOT Analysis

10. Industry Analysis
Introduction • 65 large-sized fertilizer plants in India
Industry Analysis
• 32 units-urea
Major Challenges
• 20 units-DAP & complex fertilizers
Current scenario
• 13 units-ammonium phosphate & CAN
SWOT Analysis
• Nitrogenous fertilizers-88% urea ,10% DAP &
2% ammonium fertilizers.

11. Industry Analysis
Figure 2: Crops wise consumption of Fertilizer in India
Others
24% 5%
8%
Fruits
Introduction 3%
2%
9%
Industry Analysis Vegetables
5%
3%4%
Major Challenges 4%
Cotton Rice
2.00%3%
Current scenario 5% Wheat
Sugarcane Rice Food Grains
SWOT Analysis 5%
37% Pulses
Oil Seeds
Oil Seeds
9% Sugarcane
Cotton
Rice 37%
Pulses Vegetables
Wheat 24%
3% Fruits
Food Grains 8%
Pulses Food 3%
Grains Others
8%
Oil Seeds 9%
Sugarcane 5%
Wheat
Cotton 3%
24%
Vegetables 4%

12. Industry Analysis
PRODUCTION AND IMPORT OF FERTILISERS(IN '000'T)
Introduction
Industry Analysis 12000
Major Challenges
10000
N Production
Current scenario
8000 N Imports
SWOT Analysis
PRODUCTION AND IMPORT(IN
P2O2 Production
'000 TONNES)
6000
P2O2 Import
4000 K2O Production
2000 K2O Import
0
2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
YEARS

13. Major Players of Public Sector
Introduction The public sector companies in Indian fertilizer market are
listed below:
Industry Analysis
 Fertilizer Corporation of India Limited (FCIL)
Major Challenges  Hindustan Fertilizer Corporation Limited (HFC)
Current scenario  Pyrites, Phosphates & Chemicals Limited
SWOT Analysis  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

14. Private Companies
Introduction  The Scientific Fertilizer Co Pvt Ltd
Industry Analysis  Coromandel Fertilizers
 Deepak Fertilizers and Petrochemicals Corporation
Major Challenges Limited
Current scenario  Devidayal Agro Chemicals
SWOT Analysis  DSCL
 Gujarat State Fertilizers &Chemicals Limited
 Tata Chemicals Limited
 Chambal Fertilizers
 Nagarjuna Fertilizers and chemicals limited
 Godavari Fertilizers and Chemicals limited
 Zuari Industries limited

15. Major Challenges
Introduction
• Gap between demand and supply
Industry Analysis • Greater dependency of country on
Major Challenges
imports( also feedstock)
• Unable reduce burden of government in
Current Scenario
subsidiary rates
SWOT Analysis • Infrastructural bottlenecks
• Uncertainties in government policies
• Small size of older plants

16. Current Scenario
Introduction
• Most companies are expecting approval for their
Industry Analysis huge capital expenditure plans from department of
fertilizer and industry
Major Challenges
• Indian fertilizer companies joined hands with
Current Scenario Jordan, Senegal, Oman, Morocco, Egypt etc
SWOT Analysis • 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

17. About IFFCO
Introduction COMPANY OVERVIEW
Industry Analysis FOR THE FARMERS, OF THE FARMERS, BY THE
FARMERS.
Major Challenges
Indian Farmers Fertilizer Co-operative Limited (IFFCO)
Current Scenario & was registered on November 3,1967 as a Multi-unit
IIFCO Co-operative Society. On the enactment of the Multistate
Co- operative Societies act 1984 & 2002, the Society is
SWOT Analysis deemed to be registered as a Multistate Co-operative
Society. The Society is primarily engaged in production
and distribution of fertilizers. IFFCO, to day, is a leading
player in India's fertilizer industry and is making
substantial contribution to the efforts of Indian
Government to increase food grain production in the
country.

18. SWOT Analysis - Strengths
1. Growth: IFFCO is one the most leading companies of
India. This industry is expected to grow at significant
Introduction
rate and internal strength is quite strong and good
Industry Analysis management as well.
Major Challenges
2. Technology: Technology innovation has increased the
Current Scenario company’s productivity and distributional channels
because of the company adoption of modern
SWOT Analysis technology.
3. Over the years, IFFCO has grown in strength from a
modest membership of 57societies in 1967-68 to
33260 as on March 31,2008.
4. The society derives strength from the invaluable
contribution made by its talented and dedicated
employees, who is well accomplished to deliver in the
dynamic economic scenario for gaining competitive
advantage.

19. SWOT Analysis - Weakness
Introduction 1. Gas supply: company has to depend on other
companies for the use of production
Industry Analysis
2. Insufficient production: as per demand of the fertilizer
Major Challenges in the country, company is not able to provide in full
fledged way.
Current Scenario
3. IFFCO are going only straight forward direction, i.e.
SWOT Analysis produce only fertilizers.
4. The use of fertilizers is depending only on rain and
irrigation facilities. If both are not good it will directly
affected to the use of fertilizers.

20. SWOT Analysis - Opportunités
Introduction 1. Continuous improvements quality and international
exposure has helped open up new doors to
Industry Analysis
crossover audience (farmers) and offers immense
Major challenges potential for development.
2. Company has opportunity to expand its Harrison by
Current Analysis
structuring new plant at kalol unit because of to
SWOT Analysis meet demand of the market.
3. Expand the market by globalization.
4. IFFCO has a good distribution network by which he
will sale pesticides, bio-fertilizer, research seeds
etc40

21. SWOT Analysis - Threats
Introduction 1. Many competitors are coming to crash the
strengths of the company in the market for
Industry Analysis
example GSFC.
Major challenges 2. Sometime lack of quality may generate disloyal
market.
Current scenario
SWOT Analysis

22. Introduction
Industry Analysis
Major challenges
Current scenario
SWOT Analysis
THANK YOU

23. Introduction
Industry Analysis
Current scenario
SWOT Analysis
?
Questions