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Urea industry: High cost units may survive while low cost plants shut down
Sep 07: The urea industry has sent out a distress signal that all is not well with it and if steps are not taken in time, sickness will follow
8Twin attacks -- of an unreasonable reduction in energy consumption norms and the strangling of funds due to the DBT scheme -- will see a number of companies folding up
8Nagarjuna's fate is being cited as an example of how the situation will shape up in the future.
8The tightened energy consumption norms will mean that some units may have to fold up
8Around 6-7 million tonnes of urea production may go off, and India may face a contradictory situation where high cost urea units are managing to produce while lower cost units are being forced to shut down
8Meanwhile, this year may see more red ink spilled over the balance sheets of fetilizer companies.
8More than 50% of operating urea units are incurring losses and for units which are earning profits, the argin is very thin leaving little scope for investment in this capital intensive industry.
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