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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