PROFILE OF THE FERTILIZER AND CHEMICAL INDUSTRY.docx

7/28/2019 PROFILE OF THE FERTILIZER AND CHEMICAL INDUSTRY.docx

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PROFILE OF THE FERTILIZER AND CHEMICAL INDUSTRY

India is the second biggest consumer of fertilizer in the world next only to

China. The Indian fertilizer industry provides a vital input for agriculture sector;

it ensures self reliance in food grain product and food security of nation. Growth

and development of fertilizer industry is playing an important role in the growth

of the economy as a whole.

However, the total availability was short of demand and was met through

imports. Of total fertiliser production, urea output increased to 23.3 million

tonnes in FY12-13 from 21.8 million tonnes in FY11-12 due to better capacityutilization. While production of di-ammonium phosphate (DAP) may touch 4.3

million tonne from 3.6 million tonnes this year, output of NPK (nitrogen,

phosphate and potassium) could rise to 10 million tonnes from 9.2 million

tonnes in the current period.

The entire requirement of around five million tonnes of potash fertilisers would

be met through imports as India does not have commercially viable sources of

potash. With a view to make the nation self-sufficient in urea fertiliser, the

Fertiliser Ministry has moved a proposal to boost investment in the sector. The

fertilizer subsidy bill for FY 2012-13 is expected to increase by Rs 10,000 crore

in respect of the budgeted estimates.

In current financial year FY 2012-13 the subsidy bill would reach to Rs 70,974

crore while it was estimated as Rs 60,974 crore in the budget. The government

planned to contain subsidy within 2% of the GDP in FY 2012-13 but due to

international conditions like depreciating Rupee and oil prices subsidies rose to

2.6 % of GDP. The Kelkar Committee has proposed certain initiatives to whittle

down subsidies to 2 per cent in FY 2013-14 and 1.8 % in FY 2014-15.


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INTERNATIONAL SCENARIO

When there are large areas of unused frontier land in the world it was often

more economical for farmers to move on to new uncultivated land than to invest

additional money in fertilizers. This practice continued till the 2nd half of the

20th

century in some under developed areas of the world. The use of manure and

compost is probably as old as agriculture itself and many other materials such as

ground bones, wood ash from burning the fallen trees, dried blood and fish were

employed long before the chemistry of soil and crops was understood. The

disappearance of frontiers combined with improvements in the technology of

fertilizers manufacture and more effective transportation led to a growing role

of fertilizers for producing the needed fiber.

Worlds leading producers are China, India, Russia, US, Canada and France.

The fertilizer industry in US is organized into separate segments for producing

and marketing products. Industry in the European Union is governed by a wide

number of manufacturing regulations. All fertilizer manufacturers in European

Union strive to minimize the environmental impact of their manufacturing

processes, both by improving the efficiency of those processes and by abating

emissions.

NATIONAL SCENARIO

India is primarily an agriculture based economy. The agricultural sector and its

other associated spheres provide employment to a large section of the country's

population and contribute about 25% to the GDP. National Scenario

The Indian Fertilizer companies produced around 37.6 million tonnes of

fertilizer in the year 2012-13 with a 9% rise in comparison to 34.6 million

tonnes of last year ( 2011-12 ) production.


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Agriculture productivity is dependent upon various factors like soil properties,

climate conditions, irrigation facilities, seed quality and variety, cropping

pattern, techniques of farming, prevention from pests etc, but more importantly

usage of optimum primary ,secondary and micro nutrients. Thus, the role of

Government becomes more significant in making available all types of nutrient

at affordable prices to farmers at appropriate time.

The Indian Fertilizer Industry is one of the allied sectors of the agricultural

sphere. India has emerged as the third largest producer of nitrogenous

fertilizers. The adoption of back to back Five Year plans has paved the way for

self sufficiency in the production of food grains. In fact production has gone up

to an extent that there is scope for the export of food grains. This surplus has

been facilitated by the use of chemical fertilizers.

The large scale use of chemical fertilizers has been instrumental in bringing

about the green revolution in India. The fertilizer industry in India began its

journey way back in 1906. During this period the first Single Super Phosphate

(SSP) factory was established in Ranipet in Chennai. It had a capacity of

producing 6000 MT annually. In the pre and post independence era a couple of

large scale fertilizer units were established namely the Fertilizer Corporation of

India in Sindri, Bihar and the Fertilizer & Chemicals Travancore of India Ltd in

Cochin, Kerala.

The Indian government has devised policies conducive to the manufacture and

consumption of fertilizers. Numerous committees have been formed by the

Indian government to formulate and determine fertilizer policies. The dramatic

development of the fertilizer industry and the rise in its production capacity has

largely been attributed to the favourable policies. This has resulted in large scale

investments in all three sectors viz. public, private and co-operative.


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At present there are 57 large scale fertilizer units. These manufacture an

extensive range of phosphoric, nitrogenous and complex fertilizers. 29 of these

57 units are engaged in the manufacturing of urea, while 13 of them produce

Calcium Ammonium Nitrate and Ammonium Sulphate. The remaining 20

fertilizer plants manufacture complex fertilizers and DAP. There are also a

number of medium and small scale industries in operation, about 72 of them.

Fertilizer and chemical industries in India are undergoing major transformations

and these industries are gradually being decontrolled. Administered pricing is

also being replaced by market determined pricing. Besides recession and

consequent decline in the prices of certain inputs and finished products in the

international market has made its domestic products costly and un-competitive.

Fertilizer production in India has been growing at an accelerating rate from the

very low levels. Currently India produces various kinds of nitrogenous

fertilizers (urea and ammonia), straight phosphate fertilizer (single super

phosphate) and complex fertilizers like di-ammonium phosphate.

STATE SCENARIO

Kerala has high degree of land use and cropping intensity. The states

agricultural productivity is decreasing year by year. The production and

cultivation of rice is decreasing as the farmers more attached to commercial

crops like rubber and coconut. Due to the decrease in the cultivation of rice the

consumption of nitrate and potash has come down.

The per hectare consumption of fertilizers in different states in India, the

position of Kerala is as one of the low ranking states.


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PRESENT SCENARIO

Indian agriculture has witnessed a low rate of growth of around 1.5% in the

recent years. Low and unbalanced use of fertilizer could be major reason for

this.

Adoption of new improved technology and utilisation of alternative cheaper

source of stock coupled with educational awareness can help the farmers to use

the fertilizers in correct manner.

In India only about 76% of farmers are currently using fertilizers during the

kharif season and 54% of the farmers using it in rabi season. Therefore special

efforts are needed for bringing the rest of the farmers to use fertilizers and

thereby increase in the consumption of fertilizers

Fertilizer industry in India is undergoing a major transformation .this industry is

gradually being decontrolled in the backdrop of liberalized policy and

globalization .fertilizer industry in India at present is at crossroads. The

spiralling prices of hydrocarbon and non-availability of required products and

decreasing prices of finished goods like sulphur are the main problem being

faced by this industry in India and this industry mainly depends on imported

raw materials like rock phosphate, sulphur and intermediate products like

phosphoric acid for production of complex fertilizers. This over dependence of

feed stock is another major issue confronting this industry. In short, adverse

climate conditions, continuous increase in the input cost, unremunerative selling

prices has seriously affected the operations of the fertilizer plant in all over the

country.

For the development of fertilizer industry in India, Indian fertilizer industry has

to adjust with global environment where reductions, energy efficiency,

economies of cost are crucial. To meet these challenges, Indian fertilizer

industry has to evolve clear-cut strategies.


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COMPANY PROFILE

FACT a Government of India Enterprise has business interests in manufacturing

and marketing of fertilizers, caprolactam, engineering consultancy and

fabrication of equipments. Units of FACT include the two manufacturing

divisions Udyogamandal Complex-UC and Cochin Division-CD, the

consultancy unit FACT Engineering and Design Organization-FEDO, the

fabrication division FACT Engineering Works-FEW and the Marketing

Division. The Company has also interests in petrochemicals,

hydrometallurgy,chemicals and pharmaceuticals.

INDUSTRY STRUCTURE AND DEVELOPMENT

FACT, India's first large scale fertiliser unit was set up in 1943. In 1947, FACT

Udyogamandal started production of Ammonium Sulphate with an installed

capacity of 10,000 MT Nitrogen. FACT became a Kerala State Public Sector

Enterprise on 15th August 1960 and 21st November 1962, the Government of

India became the major shareholder.

The 2nd stage of expansion of FACT was completed in 1962. The 3rd stage of

expansion of FACT was completed in 1965 with setting up of a new

Ammonium Sulphate Plant.

FACT Engineering and Design Organisation was set up on 24th July 1965 to

meet the emerging need for indigenous capabilities in vital areas of

Engineering, Design and Consultancy for establishing large and modern

fertiliser plants. FEDO has since then diversified into Chemicals,

Petrochemicals, Hydrometallurgy, Pharmaceutical and other areas. FEDO offers

services from project identification and evaluation stage to plant design,

procurement, project management, site supervision and commissioning of new


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plants as well as revamping and modernisation of old plants.

FACT Engineering Works was established on 13th

April 1966 as a unit to

fabricate and install equipments for fertiliser plants. Over the years FEW

developed capabilities in the fabrication of pressure vessels and heat

exchangers. FEW has also undertaken laying of cross country piping and

fabrication and installation of large penstocks of hydel projects.

The Cochin Division of FACT, the 2nd production Unit was set up at

Ambalamedu and the 1st phase was commissioned in 1973. The 2nd phase of

FACT Cochin Division was commissioned in 1976.

As a diversification plans from the traditional field of Fertilisers and Chemicals,

50000 TPA Caprolactam Plant at Udyogamandal was commissioned in 1990.

FACT set up 900 TPD Ammonia Plant at Udyogamandal at a cost of 638 Croresfollowing an order of the High Court of Kerala in February 1994 on a Public

Interest Litigation, to decommission the existing imported Ammonia storage

and handling facility at Willington Island (Cochin Port). The Ammonia plant

was commissioned in 1998.

The company's main business is manufacture and marketing of (a) Fertilisers (b)Caprolactam and Engineering Consultancy and Fabrication of Equipment.

The Second World War which cut of traditional sources of imports of food

grains aggravated our problem and the famine conditions that prevailed. For this

the production of fertilizers was found to be an ultimate solution.

It was then that a daring and farsighted administrator of Travancore (Kerala) Dr.

C.P. Ramaswamy Iyer had overcome the obstacle and paved the way for setting


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up a chemical fertilizer factory, FACT (Fertilizer And Chemical Travancore

Ltd.) in 1943. It was then the first large scale fertiliser factory in the entire

country.

VISION & MISSION OF FACT

Vision of FACT

To emerge as a leading company in the business of providing quality

agriculture and industrial inputs and providing engineering services for

industrial and infrastructural facilities.

Mission of FACT

To function as a dependable and globally competitive producer of fertilizer and

other allied products and to develop self reliance in the field of engineering and

technology, especially in the field of fertilizers, chemicals, petrochemical, oil &

gas industries

CORPORATE OBJECTIVES

To be of service to the nation and to contribute effectively to itseconomic well being and growth through the production and marketing of

fertilizers and chemicals and through the acquisitions/development and

dissemination of engineering technology know-how and skills.

To sustain and improve its pioneering role in the developmentof indigenous engineering and technology through research

anddevelopment.


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To improve productivity and maintain high standards of quality and adopteffective measures for controlling cost and minimizing dependence

onimports.

To ensure for its customers the availability of its products and services onreasonable terms, for its shareholders a fair return on capital invested and,

for itself, development of adequate internal resources for continual

growth and expansion.

To actively work for rural uplift through guidance, advice and service tothe farmers in co-operation with all other agencies working for

agriculture development and allied activities.

To develop, train and maintain a team of motivated and disciplinedpersonnel with required skills and abilities, and to encourage innovation

and to create a condition for their functioning and career development soas to improve their overall quality of life.

To project a favourable image of the company and its operations, in thesociety in which it operates, amongst its customers and suppliers and

amongst the public in general.

To continuously plan its future operations for sustained growth andstability for meeting the needs of the country.


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CORPORATE GOALS

To focus on cost reduction and technology up gradation in order tobecome competitive in each line of business.

To constantly innovate and develop new products and services to satisfycustomer requirements.

To invest in new business lines, where profit can be made on sustainablebasis over the long term.

To ensure corporate growth by expansion and diversification To care for the community around

MILESTONES

22-09-1943 - Incorporation

26-06-1947 - Production started

15-08-1960 - FACT came under Public Sector

21-11-1962 - Govt. of India major share holder

1959-1960 - UD 1st stage expansion completed

1962 - UD 2nd stage expansion completed


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16-03-1964 - ICMA Award for utilizing byproduct gypsum

15-10-1966 - UD 3rd stage expansion completed

1971 - ICMA Award for technology transfer

01-10-1971 - UD 4th stage Ammonia Plant

01-10-1973 - UD 4th stage 150TPD Ammonium Phosphate

24-07-1965 - FACT Engineering and Design Organisation

13-04-1966 - FACT Engineering Works

07-06-1966 - CD Phase-I License issued

27-04-1973 - CD I Urea Plant commissioned

10-11-1976 - CD II Sulphuric Acid Plant commissioned

10-12-1976 - CD II Phosphoric Acid Plant commissioned

10-01-1977 - CD II NPK trial run started

01-04-1976 - CD II NPK commercial production started

18-05-1984 - PD Caprolactam technical collaboration agreement

14-09-1984 - PD Zero date of ASCL Project


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06-08-1985 - PD Caprolactam License issued

13-12-1989 - FEW shifted to Palluruthy

26-07-1989 - Award for excellence in performance 1986/7 from the Prime Minister of I

20-12-1990 - CD-12MW Captive Power Plant

01-03-1991 - PD Caprolactam commercial production started

01-03-1991 - UD New Ammonium Sulphate commercial production started

25-09-1993 - Foundation stone - 900 TPD Ammonia Plant

23-03-1998 - 900 TPD Ammonia plant commercial production started

DIVISIONS OF F.A.C.T

1.MANUFACTURING DIVISION

Udyogamandal DivisionFACT commenced operation at Udyogamandal with the commissioning of

50,000 tonnes per annum Ammonium Sulphate Plant in 1947.In the decades

that followed multi stage expansion programs were undertaken bringing in the

latest technologies of the day which were quickly mastered and successfully

implemented. Today the division is 40 year old small capacity plants and 10

year old state of the art technology plants. The latest addition to this unit was a

900 tonnes per day Ammonia Complex set up with an investment of RS 618

crores. FACT Udyogamandal division is certified to ISO 14001, the

environmental system standards.


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Cochin DivisionFACT Cochin Division was set up in the 1970's at Ambalamedu, 30 km from

Udyogamandal and adjacent to the Cochin Refineries. Phase-I of the division

saw the setting up of an integrated Ammonia urea complex utilizing Indian

Engineering skills. A large scale complex fertilizer plant of 485,000 TPA was

set up as phase-II. Sulphuric acid and Phosphoric acid plant of economy scale

were also set up.

Petrochemical DivisionFACT diversified into petrochemicals in 1990 with the production

of Caprolactum. This versatile petrochemical product is the raw material for the

manufacture of nylone-6, which finds extensive application in textiles, tyre cord

and engineering products. Thanks to its high quality, the product has been

acknowledged as among the best in the world. The division is located adjacent

to the Udyogamandal division. Co-product Ammonium Sulphate is transferred

to the fertilizer plant of Udyogamandal division for processing.

2.MARKETING DIVISION

FACT Engineering & Design Organization (FEDO)FACT Engineering & Design Organization (FEDO) was established in 1965for

utilizing the considerable indigenous plant building expertise accumulated by

FACT in its process of nurturing the nascent chemical fertilizer industry. FEDO

is today one of India's premier project engineering organization, catering to a

wide spectrum of industries like petrochemicals, refining, pharmaceuticals,

hydrometallurgy etc as well as

petroleumstorage, environmental engineering, offsite facilities etc. The division

undertakes project execution on consultancy and turnkey basis, handling the


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intricacies of the technology sourcing, design and engineering, hardware

procurement and construction with practiced ease. FEDO is ISO9001 certified.

FACT Engineering Works (FEW)Established in 1966, FACT Engineering Works was originally conceived as a

unit to fabricate and erect equipment for fertilizer plants. Over the years, it

developed capabilities in the manufacture of Class I Pressure Vessels, Heat

Exchangers, Columns, Towers etc. required for the fertilizer, petrochemical and

petroleum industries. FEW received ISO 9002Certification in 1998.

SUB DIVISIONS

1.RESEARCH AND DEVELOPMENTS

FACThas a well occupied laboratory for research bodies by a team of highly

motivated research personnel.

2.COMPUTER SERVICE CENTRE(CSC)

FACT was amongst the companies to install computers as early as in the 60s.in

order to meet the gowing needs for management information ,for engineering

and commercial application,multi system computer service centre is constantly

updating its hardware and software resources . The online intergrated

information system that links all the functional areas of the entrprise had been

jointly developed and independent by M/S Tata Consultancy Services and

CSC.Major software systems in the organisation are developed and maintained

in skilled workforce.

PRODUCTS PROFILE

COMPANY PRODUCTS


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FACT manufactures straight fertilizers,complex fertilizers,fertilizers mixture

and chemicals

straight fertilizers ammonium sulphate urea

COMPLEX MIXTURES

FACTAMFOS Ammonium phosphate

FERTILIZER MIXTURES

Rose mix Vegetable mix Garden mixture

CHEMICALS

Anhydrous ammonia Sulphuric acid Caprolactum Nitric acid and soda ash

Documents

PROFILE OF THE FERTILIZER AND CHEMICAL INDUSTRY.docx