India Manufacturing

Corp.
Pvt. Ltd.
Fertilizers
 India Mfg. Co.

Nutrient-Based Subsidy
• Govt. of India has decided to free prices of non-urea fertilisers and fix subsidy on
these based on their nutrient content from April 2010.
• Reform would give fertiliser companies the freedom to set farmgate prices of
fertilisers other than urea, allow them to offer innovative nutrient combinations,
improve the fertiliser balance, soil health and yields.
• Bolder reforms are needed in the domestic fertiliser industry that has seen virtually
no investment in the last decade. The final target must be to dismantle price control
on urea as well, reimburse the farmer his extra expenditure through better prices,
shorten and modernise the supply chain to minimise the impact on retail prices and
transfer whatever producer subsidy is deemed fit directly to the farmer and let
markets determine all fertiliser prices.
• The fertiliser industry has given an assurance that it will maintain the current price
line in decontrolled fertilisers in 2010.
• From April this year, fertiliser subsidy will shift from per tonne of a product to its
nutrient content. Eventually, the government should directly pay the subsidy to the
farmer. This will be the mother of all reforms in the fertiliser sector.

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Nutrient-Based Subsidy
• Deregulation of fertiliser prices in the new NBS regime would be only to the extent
that the cost farmers incur doesn’t rise beyond a band. Government may control
prices, in case of steep increases in initial months of the new regime
• Of course, subsidy adjustments will be the first choice of the government to reign in
any sharp rise in prices of phosphorous and potash-based fertilisers after their
deregulation from April 1. Tweaking of subsidy amounts, along with occasional price
adjustments of phosphorous and potash, are expected to reduce any likely pain to
the farmer from deregulation, as the wild fluctuations in the global prices of the two
fertilisers cannot be ruled out.
• The Fertiliser (Control) Order (FCO) gives the government power to fix retail prices
and revoke the licence given to producers and dealers for certain violations such as
selling sub-standard or adulterated products, giving false claims about nutrients and
selling fertilisers without showing the minimum guaranteed nutrient as a fraction of
the total weight. FCO also allows the government to fix different retail prices for
selling the same product in different locations or to different classes of buyers.
• After giving producers the freedom to fix retail prices of potash and phosphorous
from April, the government’s main concerns are in these areas — non-supply to far
flung areas, escalation in international price being passed to the local consumer, sale
of products beyond printed price and selling poor quality fertilisers.

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Requirement, Production &
Import
Year Particulars Urea DAP/MAP/ Complex MOP
TSP Fertilizers
2008-09 Requirement 281.34 94.83 92.32 37.86
Production 199.22 29.93 68.48 -
Import 56.67 66.29 - 56.33*
Total 255.89 96.22 - -
(Prod.+Import.)
Availability 270.88 99.78 72.26 43.34
Sales 266.51 99.03 71.22 40.95
2009-10 Requirement 159.70 70.46 56.97 26.53
Production 120.28 29.08 44.17 -
(April Import 32.76 45.09 - 27.08
2009- Total 153.04 74.17 - -
Oct.2009 (Prod.+Import.)
Availability 149.80 74.04 45.26 23.84
Sales 142.36 72.66 43.52 22.71
* This is inclusive of quantities imported for industrial purpose for which
no subsidy is paid.

• Figures are in Lakh MT

• No new capacity added in last few years. In Urea, availability of gas
major constraint and P&K sector depend on imported raw materials
• 100% import dependence in Potash & 90% import dependence in
Phosphate
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 India Mfg. Co.
Assessed requirement: 2009-
10
Season UREA DAP MOP COMPLEX TOTAL
Karif 2009 136.36 49.21 21.61 47.52 254.70
Rabi 2009-10 145.53 57.77 22.24 40.21 265.75
Total 281.89 106.98 43.85 87.73 520.45
• Figures are in Lakh MT
• No new capacity added in last few years. In Urea, availability of gas
major constraint and P&K sector depend on imported raw materials
• As per government’s projections, the urea imports are likely to touch 10
mt by 2011.
Year Weightage Average Price Weightage Average Quantity received Savings in
of imported urea (in Price of OMIFCO from OMIFCO (in foreign
US$/MT) urea (inUS$/MT) LMT) exchange (in
million US$)
2005-06 258.56 155.23 13.25 136.9
2006-07 248.85 168.66 18.37 147.3
2007-08 344.00 180.10 18.91 309.9
2008-09 528.03 232.79 19.06 562.7

• Success of OMIFCO, Oman. The only successful Urea JV. IFFCO and
KRIBHCO are each 25% equity partners

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Urea Production

• NFL in collaboration with M/s KRIBHCO & RCF has formed a JV company
named as Uravarak Videsh Limited (UVL) to explore investment opportunities
abroad and within country in NPK sectors and to render consultancy services
for setting up Projects in India & Abroad

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Subsidy: Details of
Period expenditure
Amount of Amount of Subsidy disbursed on urea Total of all
concession Indigenous Imported Total for fertilizers
disbursed on Urea Urea Urea
decontrolled
fertilizers
(indigenous +
imported)
2006-07 10298.12 12650.37 5071.06 17721.43 28019.55
2007-08 16933.80 16450.37 9934.99 26385.36 43319.16
2008-09 65554.79 20968.74 12971.18 33939.92 99494.71
2009-10 24037.34 10410.81 4311.54 14722.35 38759.69
(Expenditure up
to 13.11.2009)

• Figures are in Rs. Crores

• Subsidy transferred in the form of subsidized MRP. Subsidy is released to
companies on confirmation of receipt of subsidized fertilizers by State
Govt.
• Per Hectare consumption of Fertilizers is max. in AP, Punjab & TN, and
lowest in NE States, Rajasthan, Orissa, Jharkhand & MP

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 India Mfg. Co.

Top Producers in India (PSUs)

Public Sector
National Fertilizers Ltd. (NFL) Fertilizer Corp. of India (FCI)
Paradeep Phosphates Ltd. (PPL) Fertilizers & Chemicals Travancore (FACT)

Hindustan Fertilizer Corp. Ltd. (HFC) FCI Aravali Gypsum & Minerals Ltd.

Pyrites, Phosphates & Chemicals (PPCL) RCF

Madras Fertilizers Ltd. Indian Potash Ltd. (IPL)
Projects & Development India (PDIL) SAIL
Hindustan Copper Ltd. Neyveli Lignite Corporation
The Dharamsi Morarji Chemicals Co. Ltd.
Cooperatives
IFFCO
KRIBHCO
Indian Farmers Fertilizers Coop

Complete List, with contact details, is

available
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 India Mfg. Co.
Top Producers in India
(Private)
Private Sector
Gujarat State Fertilizer Company Limited Godavari Fertilisers & Chemical Ltd.
Coromandal Fertilisers Ltd. Nagarjuna Fertilizers & Chemicals Limited

Shriram Fertilisers & Chemicals Chambal Fertilizers & Chemicals Ltd.

Zuari Agro Chemicals Ltd. Tata Chemicals Limited
Southern Petrochemical Ind. Corp. Ltd. Oswal Chemicals & Fertilizers Limited
(SPIC)
Mangalore Chemicals & Fertilizers Limited Basant Agro Tech Ltd.

Gujarat Narmada Valley Fertilisers Co. Ltd. Bharat Fertilizer Industries Ltd.

Duncans Industries Limited EID Parry (I) Ltd.

Deepak Fertilizer and Petrochemicals Raashi Fertilizers Ltd.
Corpn. Ltd.
Indo-Gulf Fertlizers & Chemicals Corpn. Rallis India Ltd.
Ltd.
Khaitan Chemical & Fertilizers BEC Fertilizers
Bajaj Fertilizers Ajay Farm-Chem
Shri Amba Fertilizers Maharashtra Agro Industrial Development
Corp.
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 India Mfg. Co.

Joint Ventures
• JORDAN. SPIC, Jordan Phosphates Mines Company Ltd. (JPMC) and Arab
Invest. Company (AIC) have setup a JV in Jordan to produce 2.24 L tons of
phosphoric acid pa
• MOROCCO. A JV IMACID (Indo Moroc Phosphore SA) between Office Cherifien
Des Phosphates (OCP), Morocco and Chambal (CFCL) to produce 3.30 L tons of
phosphoric acid pa commissioned in Morocco in October 1999.
• OMAN. OMIFCO. 16.5 LMT of urea & 2.5 LMT of surplus ammonia pa
• UAE. SPIC in process of setting up a gas-based nitro. Fert. plant at Dubai to
produce 4 LMT of urea pa at estimated cost of US$ 170 mn
• EGYPT. IFFCO & El Nasr Mining Co. (ENMC) have formed a JV, the Indo
Egyptian Fertiliser Company in 2005 for setting up a Phosphoric Acid plant in
Edfu, Egypt with installed cap. of 0.5 million tones of P205 pa.
• TUNISIA. GSFC & CFL alongwith Group Chimique Tunisien (GCT) & M/s
Compagnie Des Phosphates De Gafsa (CPG) setting up a JV in Tunisia for
prodn. of 3.6 LMTs of Phosphoric Acid per annum

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 India Mfg. Co.

Future JVs
• Import dependence for availability of urea and phosphatic fertilizers
& DAP has been increasing over the last few yrs.
• Govt. exploring possibility of setting up JV urea projects in countries
abroad having rich gas resources. Specially Middle East like Saudi
Arabia, Kuwait & Qatar & in African nations like Nigeria, Egypt and
Mozambique.
• Govt. also setting up JV projects for phosphatic rich countries like
Tunisia, Algeria, Morocco & Jordan so that supplies of raw material,
intermediates and finished fertilizers are ensured in future
• GoI in talks with Qatar for setting up 1.6-mn ton fert plant with a
buyback arrangement to import urea at a fixed price to augment its
domestic supply, like OMIFCO

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Other JVs
• Israel Chemicals Ltd. has formed a JV with Zuari to
produce and distribute water-soluble NPK fert. in
India thru a 10000 MT plant. ICL is a leading
supplier of fert in Europe and a key player in the
specialty fertilizer market
• Yara International ASA & Kribhco to establish a JV
for prodn. & mktg. of mineral fertilizer. Indian prodn.
base by acquiring existing prodn. facilities & import.
Foreign prodn. base in areas with well priced raw
materials (2007)
• Deepak Fert to establish JV with Yara for prodn &
mkt of ammonium nitrate and specialty fertilizers in
India.

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SSP Plants

Chittorgarh
Udaipur
Raisen /
Sagar
Khargone, Dewas,
Indore, Dhar
Akola, Wardha,
Amravati
Thane, Raigad
Nanded

Vizag

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SSP Plants

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SSP Plants

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SSP Plants

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World’s Leading
Manufacturers

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 Thank You
Puneet Goyal, Business Head
India Mfg. Corp. Pvt. Ltd.
www.imfg.in ; info@imfg.in
99905 50666