GAS ALLOCATION:
Indian Farmers Fertiliser Co-operative (IFFCO) and Indo-Gulf Fertlizer Ltd. (IGFL) plants are ready for offtake of the balance quantity of the KG-D6 gas, which has been allocated to them by the Empowered Group of Ministers (EGoM).
A total of 0.52-mmscmd and 0.478-mmscmd of D-6 gas were allocated to IFFCO's Phulpur-I/II units and IGFL's Jagdishpur plant. Out of the total allocations, gas sale & purchase agreements (GSPAs) were signed for only 0.25-mmscmd with each company.
As plants of the two companies are now ready, they have expressed their desire to offtake the balance. The Department of Fertilizers (DOF) has also informed the ministry about readiness and GAIL has confirmed connectivity of these two plants to the pipeline grid.
In light of this, the petroleum ministry has asked Reliance Industries Ltd. (RIL) and Niko – the two contractors of the KG-D6 field – to immediately sign fresh GSPAs with the two fertilizer entities.
Highest priority to fertilizer plants
The EGoM has accorded highest priority to gas-based fertilizer plants and accordingly the petroleum ministry, in consultation with the DOF, has allocated 15.668-mmscmd of gas produced from the KG-D6 block to various fertilizer plants.
OUTLOOK FOR NUTRIENTS
Slump in Indian demand for MOP temporary: PotashCorp
Canada's Potash Corporation (PotashCorp) believes the slump in demand for potash in India due to certain factors is a passing phase. In its quarterly market analysis report dated 25 June 2012, the company says: "One of the major impediments to improvement of India's lagging crop yields is its under-application of potash relative to nitrogen."
It claims "farmers were making strides to improve this ratio until 2011, when delayed contract settlements limited potash availability. More recently, a weakened Rupee and fertilizer subsidy changes that subsidize nitrogen heavily, compared to potash and phosphate, are leading to higher retail prices for potash and deferring demand in the short term."
"We view this situation as a short-term issue, as the medium- to long-term consequences on India's food production of under-applying potash and phosphate are too significant. Given projected potash consumption levels for 2012, the nitrogen-to-potash ratio is expected to fall back to 6:1. This is not sustainable in the face of the need to improve lagging crop productivity and meet the future food needs of India's rising population."
PotashCorp admits potash shipments have fallen below the long-term trend, following the global economic downturn and recent deduction in India's potash demand.
Flat demand for phosphates in 2012
As for phosphates, the company notes that changes in nutrients-based subsidy scheme in India caused a decline in 2011 DAP and MAP consumption. "We expect India's consumption to be flat in 2012 compared to 2011 levels," it adds.
OVERSEAS FORAY
Iffco plans ammonia-urea plant in Canada
The Indian Farmers Fertiliser Co-operative Ltd. (Iffco) is setting up a gas-based ammonia-urea complex in Canada.
According to Mr. A.K. Singh, Senior Executive Director (Technical), the proposed project would be through a joint venture, Iffco Canada Fertiliser Co, between its wholly-owned Dubai-based subsidiary, Kisan International Trading FZE, and a Canadian partner. The process to select the partner and location of the complex has started, Mr Singh said. Americas Petrogas, the Canadian company in which Iffco has a 10% stake, or its subsidiary, with which Iffco has a joint-venture agreement, are not collaborating for this project.
The project will comprise two ammonia units (2,200-tpd each), a couple of urea plants (4,000-tpd in two streams), and auxiliary facilities. The complex, likely to be located in eastern Canada, will also include a dedicated jetty for export, with an ammonia throughput of 1,000 tonnes per hour and urea at 1,200-1,500 tonnes per hour. Iffco has received several bids for the three expressions of interest from engineering, procurement and construction contractors, both domestic and foreign.
The engineering, procurement, erection and commissioning of the two streams of the urea plants shall be phased such that the second unit would be in production one year after the first unit goes on stream. However, the auxiliary facilities will become ready with the first urea stream.
DIVERSIFICATION
Sterlite likely to enter phosphatic fertilizers segment
Sterlite Industries (India) Ltd. (SIIL) has hinted that it is likely to enter phosphatic fertilizers and chemicals business as forward integration to its by-products acid business.
In its notice to shareholders convening its annual-cum-extra-general meeting, it says "it is proposed to explore manufacturing of any other useful products derived from sulphuric acid or phosphoric acid."
The company says that it also intends to explore the possibility of adding value to phosgypsum, a waste production of phosphoric acid plant.
SIIL currently manufactures sulphuric acid and downstream phosphoric acid at its copper smelter complex at Tuticorin in Tamil Nadu. It sells a part of sulphuric acid output to fertilizer and chemical companies and uses the balance for production of phosphoric acid. The latter acid is sold to fertilizer plants.
The AGM/EGM resolution provides for inclusion of two new objectives in the object clause of SIIL's memorandum of association – fertilizers and various chemicals – as potential areas in which the company can make forays.
CORRUPTION
Yara probe confirms pay-offs in Indian & other deals
Norway's Yara International has issued updates on completion of a probe into the "unacceptable" payments that it made to unnamed overseas entities in relations to certain transactions including an aborted joint venture deal with Kribhco.
Yara-appointed law firm Wiersholm has completed investigation into these payments, confirming the concern over the nature of these payments. In April 2011, Yara ordered its own probe after notifying Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) of possible irregularities in specified overseas transactions.
A Yara release says: "An unacceptable payment of US$1-mn in 2007 to a consultant in India is documented, related to negotiations with Krishak Bharati Cooperative Limited (Kribhco)."
Yara had signed a speciality fertilizers joint venture agreement with Kribhco in April 2007, but the proposal did not take off.
The law firm has also confirmed unacceptable offers of payment to a consultant are documented, related to the establishment of Libyan Norwegian Fertilizer Company (Lifeco).
NEED FOR INVESTMENT
Urea demand-supply gap to rise to 11-mt: FAI
India currently produces around 22-mt of urea, while the consumption is around 28-mt. This gap in demand and supply of urea is projected to rise to 11-mt by the 2016-17 fiscal, according to the Fertiliser Association of India (FAI). "There is an urgent need for construction of new urea projects to fill the projected consumption and production gap," FAI's Director General, Mr. Satish Chander noted.
India was self-sufficient in urea till 2001-02, but with rising consumption and lack of major investments, production could not catch up with increasing demand, he added. Emphasising the need for more investments in the urea sector, Mr. Chander said in view of high capital costs, there has to be a conducive policy for investments in new projects. "The government should come out with the new investment policy for urea. The industry is ready," he added.
According to a report of the Working Group set up by the Planning Commission for the 12th Five Year Plan (2012-17), India needs to invest Rs. 40,000-crore in the fertiliser sector to increase the country's urea production capacity to 33.7-mtpa by the end of the 12th Five Year Plan. Investments in the sector by end of 2010-11 stood at Rs. 27,247-crore, the report said.
CALL FOR ROLLBACK
Tamil Nadu pushes for withdrawal of nutrient-based fertiliser subsidy
The Tamil Nadu Government has urged the Central Government to withdraw the Nutrient-Based Subsidy (NBS) policy and revert to the earlier system of controlled pricing.
The Tamil Nadu Chief Minister, Ms. J. Jayalalithaa, has written to the Prime Minister, Dr. Manmohan Singh, to withdraw the prevailing subsidy system, which has resulted in a steep increase in fertiliser prices for farmers. She also requested Dr. Singh to direct the Fertiliser Ministry to allocate to the State the entire quantity of fertiliser that it needs.
For the current year, the Fertiliser Department has reduced the subsidy on DAP to Rs. 14,350 from Rs. 19,763 last year and for MOP to Rs. 14,400 from Rs. 16,054. It is also considering further cuts in subsidy and a 10% hike in urea prices are also envisaged, the Chief Minister said. The State Government has absorbed some of the impact of the price hike by doing away with the 4% VAT on fertilisers and pesticides from July 2011. However, the Centre, which dictates the policy, has to support the farmers to make agriculture remunerative, she said.
"The introduction of the nutrient-based subsidy scheme by the Government from April 1, 2010, coupled with an unreliable supply of fertilisers to the state, is indeed threatening to deprive our farmers of their basic means of sustenance and livelihood." Mr. Jayalalithaa said in the letter.
MMTC to buy one lakh tonnes of complex fertilisers
MMTC Ltd. has invited tenders for delivery of 100,000-tonnes of three grades of complex fertilisers during July-September 2012. The three grades of complex fertilisers are: ammonium phosphate sulphate (APS) (20-20-0-13), NPK (15-15-15) and NPK (17-17-17).
MMTC has asked for supply of 50,000-tonnes of APS in two parcels of equal size. The balance requirement of 50,000-tonnes is split equally between two NPK fertilisers. The consignments have to be delivered at Tuticorin port.
ACCIDENT
Reactor blast at Nagarjuna Agrichem's AP unit injures 14
Fourteen workers were injured as a reactor exploded at the Nagarjuna Agrichem factory at Chilakapalem in Etcherla mandal of Srikakulam district, Andhra Pradesh on the morning of June 30.
"There are no casualties in the unfortunate accident, which occurred in the plant at around 9.30 a.m. It is now under control. Fourteen employees were injured in the incident," informed a press note issued by the company. The unit produces pesticide technical formulations and the products are sold in over 20 States.
Public outrage
Tension gripped the area as news of the fire spread through the TV channels and many in the neighbouring villages moved to safer places. The authorities also evacuated some people in the morning and asked people within a radius of 10-km to be on the alert.
Operations were suspended the next day following an agitation by the public. People from the 15 villages in the vicinity staged a demonstration and asked the district authorities to close down the factory immediately. The agitators contended that had the fire spread to the other reactors in the factory the consequences would have been even more disastrous and, therefore, the factory should be shut down immediately. The management was not taking proper safety measures, they alleged.
In response to the agitation, the district administration served a show-cause notice on the management, instructing it to stop operations for a fortnight, and offer an explanation on July 15 on the accident and the related issues. The district authorities assured the public in the nearby villages that all steps would be taken to ensure their safety and that requisite steps would be taken against the management.
CONFERENCE
CropWorld India to highlight business innovations
CropWorld India, an annual conference being held for the third year, from September 10-11, 2012 in Hyderabad, will focus on highlighting innovation in business, distribution, R&D and product development strategies in the agrochemical, seed and biofertiliser and biopesticide businesses.
The two-day event organized by UBM India will enable participants to identify business opportunities, and trends in diversification, mergers and acquisitions, industry consolidation and portfolio expansion. It will also showcase advances in seed production, processing and hybrid technology, and present case studies on opportunities lying in bio-pesticides and bio-fertilisers.
According to the organisers, experts from research and industry will highlight innovations in formulation, nanotechnology and encapsulation, while special sessions will provide guidance on market entry and regulatory guidelines on Asian and American markets.
GROWTH TARGET
Rallis aims at Rs. 500-cr turnover from Dahej plant in 5 years
Tata Group-owned agrochemicals company, Rallis India, is expecting a Rs. 500-crore turnover in five years from its multi-purpose manufacturing plant at Dahej in Gujarat. This was stated by Tata Sons' Executive Director and Chairman of Rallis India, Mr. R. Gopalkrishnan, while addressing shareholders at the company's annual general meeting (AGM) recently.
During the year, the company successfully commissioned and started commercial production at its additional manufacturing facility at Dahej, producing a number crop protection products. He said the company will focus more on launching a suit of crop solutions under its green portfolio. The company's net profit stood at Rs. 101.38-crore for the year ending March 31, 2012, while its total revenue was at Rs. 1,260-crore.
