Paradeep plant to cut India’s fert subsidy bill by Rs 500 cr a year

Nov 19 2008, 00:24 IST
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SummaryThe Paradeep phosphatic fertiliser plant of the Indian Farmers Fertilisers Cooperative Ltd is well on course in making India self-reliant in phosphatic fertilisers. With the addition of a new capacity, the country will reduce its dependence on imported phosphatic fertilisers by about 25% and is expected to cut the government’s subsidy bill by about Rs 500 crore annually.

The Paradeep phosphatic fertiliser plant of the Indian Farmers Fertilisers Cooperative Ltd (Iffco) is well on course in making India self-reliant in phosphatic fertilisers. With the addition of a new capacity, the country will reduce its dependence on imported phosphatic fertilisers by about 25% and is expected to cut the government’s subsidy bill by about Rs 500 crore annually.

The company’s annual capacity has now increased to 4.24 million tonne of urea and 4.335 million tonne of nitrogenous and phosphatic fertilisers. This accounts for 20 % of the country’s total nitrogenous fertilisers and 25% of the phosphatic fertiliser production. Of the total requirement of about 74 lakh tonne of di-ammonia phosphate (DAP), Iffco and erstwhile PSU Paradeep Phosphates Ltd (PPL) contribute about 33 lakh and 12 lakh tonne, respectively. Costly imports and smaller players in the country meet the additional requirement. “Iffco is on a backward integration spree with overseas ventures such as phosphoric acid plants in Senegal, Egypt and Jordan for supplying phosphoric acid to its Kandla and Paradeep units. Rock mining in Australia feeds the Paradeep plant,” executive director, M R Patel, said.

Iffco had acquired the country’s largest, privately owned phosphatic fertiliser complex from Abhey Oswal, at Paradeep, in a Rs 2,180-crore deal in October 2005. The complex has two streams. Each produces 3,500 tonne per day of sulphuric acid, which feeds the phosphoric acid plant and generates high-pressure steams from waste heat, which in turn, is used in power generation in the two streams of the 55-mw power plant.

The annual capacities of the plant are 23.1 lakh tonne of sulphuric acid, 8.745 lakh tonne of phos acid and 19.20 lakh tonne of DAP/NP. The complex has a jetty at Paradeep Port with two un-loaders. Major raw materials, such as sulphur, phosphate rock and ammonia, are imported from Jordan, Algeria, Vietnam and the Gulf countries.

The cost of production is directly related to the global prices of raw materials, which varies on the demand and supply situation. “This is a unique acquisition wherein a sick private enterprise, closed due to violation of environmental norms, is bought by a cooperative. Normally, it is the reverse case where a public sector company is sold to a private company like Paradeep Phosphates Ltd (sold to the Zuari Maroc group in 2002),” Patel pointed out.

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