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ZACL evaluating two options for expansion of its ammonia-urea stream

Sept 2: Zuari Agro Chemicals Ltd (ZACL) is considering two alternative techno-economic options for revamp and expansion of ammonia-urea stream at its production complex at Zuari in Goa.
8In its annual report for 2013-14, ZACL says: “The Company has initiated a Basic Engineering and Design Study for the substantial revamping of its existing ammonia / urea manufacturing capacities. The study for the ammonia plant is being carried out by Kellogg Brown & Root (KBR), USA which is expected to be completed by end of May, 2014. The technical feasibility of the Urea plant has been completed by Toyo Engineering Corporation, Japan.”
8It adds: “Meanwhile, the Company is also evaluating alternative technical feasibility for the ‘Super Revamp’ by Casale Group of Switzerland. The Company will take a final decision on the proposed capital expenditure based on detailed analysis of the two alternative proposals.”
8As regards amendment to the New Urea Investment Policy (NUIP)-2012 made earlier this year by outgoing UPA Government, the report has noted the removal of the word ‘guaranteed buyback’ and its replacement with domestic sales made by the companies.
8It says: “Consequently, in case of excess supply, subsidy would be paid only for actual sales of urea in the domestic market. This would increase the marketing risk to some extent for the investors setting up new plants as the companies would need to ensure optimum capacity utilisation for setting up such highly capital-intensive projects.”

DSL mulls entry in crop care business; stresses urgency for rational urea policy

Sept 2: DCM Shriram Limited (DSL) is considering entering the pesticides business to emerge as total farm inputs provider to growers.
8At a recent conference call with analysts, DSL Chairman and senior Managing Director Ajay Shriram said: “We have studied the crop care protection chemicals as a vertical and as a business. We have also got some study done by McKinsey on this to see what is the future strategic direction for the business. We are in dialogue with them to see how we want to carry forward this business and what are the growth avenues in this business? Crop care protection chemicals is one of them definitely. We are studying all the avenues currently, but have not frozen on anything yet.”
8He said this in response to a question which reads as: “Farm Solutions business has presence almost across the segment i.e. seeds to Fertilizers to many inputs, but you do not have any facility in agro chemical. That is probably the missing link. So with the significant cash flow generation now do you have any plans in organic growth opportunities in agro chemical business in India?”
8Asked whether DSL was looking at “an inorganic opportunity in agro chemical business,” Mr. Shriram said: “As I mentioned we are still studying it. I think we have to take a management decision of what is the strategic direction we want to invest in and grow in and I think this is an ongoing activity. I am sure we will have more information by the next quarter and we will be in a better position to share a more concrete plan.”
8Reviewing fertilizer sector developments, he said: “The Urea business continues to be adversely affected due to delay in subsidy payments and inadequate compensation for the conversion cost increases over the last decade. The government as a partial relief has increased conversion cost reimbursements by Rs. 500 per ton with effect from 1st April 2014. However, a rational long-term policy is an urgent need for the sector.

RCF lets nitric acid & ammonium nitrate plant bidders for Talcher project rework their bids

Sept 1: Rashtriya Chemicals and Fertilisers Limited (RCF) is offering three pre-qualified bidders for nitric acid and ammonium nitrate plants of Talcher fertilizer project an option to change their respective consortium partners.
8The prequalified bidders are: 1) UHDE India Pvt Ltd (UIPL), Mumbai, 2) Tecnicas Reunidas, Spain and 3) Technip, France.
Observing that these three bidders need not re-apply, RCF says: “In case any existing bidder wishes to change consortium partner, then fresh bid will have to be submitted from the new Consortium.”
8The notice inviting tenders, limited to these entities, says that RCF has prepared a pre-qualification booklet for providing details of the bidding process. The last date for submission of bids is 29th September 2014.
8The proposed integrated coal gasification based fertilizer complex at Talcher in Odisha would have a 850 tonnes per day (tpd) nitric acid plant and a 1000 tpd ammonium nitrate plant.
the Government last year decided the complex should be would form two separate JVs for the proposed revival of the mothballed fertilizer plant. The first JV would set up coal gasification and gas purification plant with GAIL having major stake. The second JV would set up ammonia, urea, ammonium nitrate, nitric acid plants & off-sites, including captive power plant & coal washery. In this JV, the majority stake would be held by RCF & Coal India Limited (CIL) with minor stake by Fertilizer Corporation of India Limited (FCIL) & GAIL.

RCF gives bidders for Talcher Ammonia-Urea stream an option to change consortium members

Sept 1: Rashtriya Chemicals and Fertilisers Limited (RCF) has decided to give six pre-qualified turnkey bidders for the ammonia-urea stream of Talcher project an opportunity to change their respective consortium partners.
8The prequalified bidders are: 1) Samsung (Single bidder), 2) Techint (Single bidder), 3) Saipem (Single Bidder), 4) Consortium of Technimont Italy and Tecnimont ICB,India, 5) Consortium of Technip and L&T and 6) Consortium of UHDE GmBH, UHDE India and Nagarjuna Construction Corporation Ltd.
8In notice inviting tenders limited to these entities, RCF says: “In case any existing bidder wishes to change consortium partner, then fresh bid will have to be submitted from the new Consortium.”
8The company has prepared a pre-qualification booklet for providing details of the bidding process. The pre-qualified entities that do not wish to alter their respective consortium composition need not apply for fresh bidding.
8The last date for submission of bids is 29th September 2014.
8The proposed integrated coal gasification based fertilizer complex at Talcher in Odisha would have a 2700 tonnes per day (tpd) ammonia plant and a 3850 tpd urea plant.

CFCL implies the need for SSP sector reforms

August 29: Chambal Fertilisers and Chemicals Limited (CFCL) has hinted at the need for restructuring and reforms in the single super phosphate (SSP) industry.
8According to CFCL’s annual report for 2013-14, “The Company is running its Single Super Phosphate (SSP) production facility at Gadepan. There is a good potential for SSP business as there are not many big players in production of SSP. This industry is plagued by the presence of a number of small players who sometimes resort to unethical practices.”
8As regards CFCL’s plan to expand further its urea capacity, the company would take up implementation of its 1.3-mtpa expansion at Gadepan complex after the Government announces the revised urea investment policy.
8As put by the report, “Your Company plans to expand existing capacities at Gadepan to produce additional 1.30 Million MT per annum prilled Urea through a Brown-field Expansion Project (Gadepan-III Project). The Board of Directors had approved the setting up of the project at a cost not exceeding USD 850 million. The Company had issued Letter of Intent to the Lump-Sum-Turn-Key contractors for Gadepan–III Project. The implementation of Gadepan-III Project will place the Company in a different league and will further strengthen its position in Urea segment. Since Government of India has put New Investment Policy 2012 on hold, further action for expansion plans of the Company will be taken after the Government announces the revised policy.”

CFCL foresees a big setback to indigenous urea prod due to policy glitch

August 29: Chambal Fertilisers and Chemicals Limited (CFCL) believes that the country’s march towards self-sufficiency in urea production would receive a setback for want of appropriate policy for production beyond the assessed capacity of gas-based plants.
8In its annual report for 2013-14, the company says: “Urea production beyond re-assessed capacity is becoming unviable for most of the urea manufacturing units due to increased cost of RLNG, expected price rise in domestic gas and fall in the international urea prices. The urea industry needs immediate policy intervention from the Government to sustain the production beyond re-assessed capacity. If the Government does not come out with appropriate policy urgently to support the production beyond re-assessed capacity, the urea units will be forced to cut down production, resulting into increased imports of urea and foreign exchange outgo.”
8It adds: “The proposed increase in domestic gas prices will have a huge impact on the subsidy burden of the Government and consequent increase in the working capital requirements of fertilizer industry including your Company.”
8CFCL had to curtail the production of urea due to unviable Government policy for production beyond certain level in 2013-14. Therefore, the overall production of urea during the year under review was lower than that of last year.
8According to the annual report, during last few years, the Government of India has resorted to under-provisioning for fertilizer subsidy in the union budget. This has resulted into long delays in payment of subsidy to the fertilizer companies thereby substantially increasing industry’s interest burden.

CCEA extends the breather for naphtha-based urea by three months

August 28: The Cabinet Committee on Economic Affairs (CCEA) has approved the continuation of naphtha-based urea production at Madras Fertilizers Limited (MFL), Mangalore Chemicals and Fertilizers Ltd (MCFL) and Southern Petrochemical Industries Corporation (SPIC) by three months.
8CCEA decided on Wednesday to extend the deadline for these three companies for changeover of feedstock to natural gas from naphtha from 30th June 2014 to 30th September 2014 under the Modified New Pricing Scheme-III.
8According to an official release, “This will enable these units to continue urea production for the next three months and help in meeting the requirement of urea for Indian farmers in the ongoing kharif season. This decision will ensure food security of the country. All stake holders namely farmers, urea manufacturers in the country and the Government will be benefitted by this.”

MFL seeks separate bids for supply of granulated mixture & ammonia

August 28: Madras Fertilizers Limited (MFL) has invited offers for supply of 21,000 tonnes of granulated mixture (20:20:0 grade) packed in 50 Kg bags carrying its ‘Vijay’ brand.
8The company has specified different quantities of this fertilizer to be supplied at certain places in Tamilnadu, Puducherry, Telengana, Andhra Pradesh and Karnataka for the period 2014-15.
8Through a separate tendering invitation, MFL has solicited offers for supply of 6,000 tonnes of fertilizer-grade anhydrous ammonia beginning September 2014 from indigenous gas-based fertilizer companies or from complex fertilizer companies that have ammonia storage facilities.
8The prospective bidders should be “willing to supply with an offer on (a) Immediate payment (b) On 15th day from the date of dispatch of material (c) 30 days Buyer‟s credit from the date of dispatch of material at SBI PLR interest on Ex-works basis for indigenous supply of Anhydrous Ammonia on Import Parity Price,” says MFL

CFCL foresees profitability squeeze in DAP value chain; shuts down Gadepan-I urea unit due to a technical snag

August 27: Chambal Fertilisers and Chemicals Limited (CFCL) foresees a squeeze in the profitability of DAP industry due to rise in international prices of both the fertilizer and phosphoric acid.
8Answering questions on DAP business at a recent conference call with investment analyst, CFCL Managing Director Anil Kapoor observed: “Phos-acid prices have not yet been concluded. We expect a higher price of acid than last time. DAP which was ruling at around $450 to $460 per ton is now been quoted upwards of $475 to $480. So the margins have substantially squeezed in the Phosphatic segment. This coupled with the rupee pressure, the coming quarters are going to be very interesting for the Industry.”
8He said: “Earlier there was a glut situation, as a result of which the margins improved. But now with the market tightening and the whole chain not making that type of money, everybody will have to do belt tightening. Last year was a skewed market. In fact the dealer, retailer network was making more money than the industry. And in certain places DAP was selling below MRP. Now that will not happen. Everything will go at MRP and a rational profitability will be taken by each segment of the business.”
8Replying to a question on DA inventory in the country, CFCL Vice President (Marketing) V K Gupta said: “Last financial year we had opening inventory of about 40 lakh tonnes of DAP in the channel. This year we have started with about 20 lakh tonnes and most of that has been consumed in the first quarter. So now inventory level would be bare minimum i.e. about 7-8 lakhs tonnes.”
8CFCL expects a marginal dip in DAP consumption in 2014-15. Mr. Gupta said: “We expect the total consumption of about 80 lakhs to 90 lakhs tonnes of DAP during the year at an all India level. The way monsoon is improving, the number would be close to 90 lakh tonnes otherwise it will be close to 84-85 lakh tonnes.”
8He added: “Last year, the total sales were about 72 lakh tonnes; 20 lakh tonnes came from the pipeline. So almost 92 lakh tonnes was consumed.”
Meanwhile, the company yesterday disclosed to BSE, Mumbai that it had shut down one urea unit at its ammonia-urea production complex at Gadepan.
8CFCL stated: “one of the Company's Urea Plants at Gadepan, District Kota, Rajasthan has shut down on August 23, 2014 due to leakage in Ammonia synthesis gas converter. It is likely to take two weeks before the plant resume production.”

DAC calls for a big boost to prod of phosphorous-delivering biofertilizer

August 27: The Department of Agriculture and Cooperation (DAC) has pitched for quantum jump in production and usage of Phosphorous Solublizing Bio-fertilizers (PSB)
to reduce dependence on imported phosphates.
8According to DAC’s annual report for 2013-14, the Centre has advised States to promote use of PSB.
8The report says: “current production of bio-fertilizers as per recommended dose of bio-fertilizers (kg/hectare) can cover only about 10% of total gross sown area of our country. State Governments have been advised to make an assessment of how much of PSB is required to be produced for ensuring coverage of more than 80% of gross sown area and start a campaign to ensure to cover this area by funding from various Central/State Government schemes.”
8It adds: “This Ministry has also started promoting use of SSP, as an alternative source of ‘P’ nutrient and accordingly, an attempt has been made in consultation with State Governments to convert 5% requirement of DAP into equivalent SSP for the Rabi season 2013-14.”
8The report has discussed at length different issues relating to soil fertility and fertilizers.

IIL gears up to secure green nod for SSP expansion with an eye on exports

August 26: Indra Industries Limited (IIL) is gearing up to secure environmental approval for its Rs 5-crore expansion of its single super phosphate (SSP) plant and diversification into zinc phosphate production in Dhar district of Madhya Pradesh.
8According to the company’s environment impact assessment report (EIA) unveiled for public hearing, the expansion has been conceived with an eye on both the domestic and export markets.
8The project provides for increase in powder SSP capacity to 120,000 tonnes per annum (tpa) from 45,000 tpa. It also provides for a facility for transformation of the entire output into granular SSP (GSSP). The company would also locate 10 tonnes per day zinc phosphate within the existing factory area.
8The company would source rock phosphate either from Rajasthan State Mines & Minerals Limited (RSMML) or from overseas. It has identified Kandla port as potential gateway for import of rock phosphate and export of SSP. The company would procure spent sulphuric acid from the nearby areas.
8The monthly requirement for rock phosphate and sulphuric acid would be 7000 tonnes and 4320 tonnes respectively.
8The expanded plant would generate 12,000 kilolitre per annum of hydro fluro silicic acid (HFSA) as a by-product which would partly be reused and partly sold to authorized entities.

DOF inducts Mosaic India as MOP importer under NBS

August 26: The Department of Fertilisers (DOF) has inducted Gurgaon-based Mosaic India Private Limited (MIPL) in the nutrient-based subsidy (NBS) scheme as an importer of muriate of potash (MOP) with immediate effect.
8In an office memorandum, DOF has said this decision has been taken on the basis of a representation dated 26th May 2014 received from the company. DOF also took into account the fact that the company is already registered for import of DAP & MAP under NBS scheme.
8MIPL is a wholly owned subsidiary of GNS Corp II LLC, which, in turn, is a wholly owned subsidiary of The Mosaic Company of the U.S. It is one of the world's leading producers and marketers of concentrated phosphate and potash.

August 25: ICRA expects Govt to modify incentive for additional urea output   Details
August 25: RCF seeks offers for supply of 50,000 tonnes of DAP/MAP   Details
August 22: MFL seeks tenders for import of 15,000 tonnes of potash   Details
August 22: MMTC solicits offers for importing 30,000 tonnes of APS complex fert   Details
August 21: Saurabh Chandra pushes for using LNG by power stations-I: Cost of using diesel and FO higher than LNG   Details
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