Deepak Fertilisers and Petrochemicals Corporation (DFPC) will be commissioning the new Rs 4,350 crore ammonia plant and start production by May-June this year. The company is adding a capacity of 5,00,000 million tonnes per annum (MTPA) at Taloja in Maharashtra which would take the total ammonia capacity to 6,28,700 MTPA.
“By the end of the quarter, we should have the plant up and running. This is a world-scale ammonia plant with the world’s best technology (KBR and Toyo), and we are expecting a fairly low gestation period for a smooth running,” Sailesh C Mehta, chairman and managing director, DFPC, said.
“We are beautifully aligned with the Indian growth story and China plus one strategy,” Mehta said. As India grows, the requirement for all its products will grow with demand from coal, cement, mining, and industrial chemicals sectors. Ammonia is a critical raw material for fertilisers, industrial chemicals and TAN (Technical Ammonium Nitrate).
Mehta said. Upstream investments in ammonia, a key raw material for each of the business segments, would help mitigate risk against global vagaries he said, “All these products require ammonia and instead of facing the vagaries of ammonia price volatility now we will have our own plant serving 100% of our needs,” Mehta said. The price of ammonia went up by 63% in FY23.
This expansion would also save the logistics cost of importing ammonia by $ 75-80 per tonne and improve consolidated margins for the company. The company has been importing ammonia from the Middle East bringing it to JNPT and transporting it to Taloja in 30,000 road tankers every year. The project was also expected to save forex of `20,000 crore over the next 20 years through import substitution. The expansion could be expected to add `2,000-`2,500 crore to the topline.
The company has executed gas supply agreements for the ammonia plant and this would take care of more than 2/3rd of their total gas requirements.
DFPC crossed the landmark of `11,000 crore topline (`11,301 crore) `2,000 crore Ebitda and bottom line of `1,000 (`1,221 crore) crore in FY23.