Growth of Indian Fertilizer Industry

The Indian fertilizer industry has come a long way since the setting up of the manufacturing unit of Single Super phosphate (SSP) near Chennai in 1906 A new impetus to the growth of Indian Fertilizer industry was provided by the set up the two fertilizer plants- Fertilizer & Chemicals Travancore of India Ltd. (FACT) in Kerala and the Fertilizers Corporation of India (FCI) in Bihar. This was during the forties and the fifties.

[br]The aim was to create an industrial base that would provide India with self reliability in food grains.

India witnessed significant growth of the fertilizer industry during the sixties and the seventies. By 2003, India had an installed capacity of 12.11 million MT of nitrogen and 5.36 million MT of phosphate. Today, with 57 large sized fertilizer plants manufacturing a wide variety of the nitrogenous, complex and phosphatic fertilizers, the Indian fertilizer industry is the 3rd largest producer in the world. One of the major factors that have led to the rapid increase in the production capacity of fertilizers in India is the policy environment. With the formulation and implementation of investor friendly policies, large investments poured into the private, public and co-operative sectors and this propelled the growth of the Indian fertilizer industry.

Some of the major fertilizer companies in India (in the public sector) are as follows:

National Fertilizers Limited (NFL)
Hindustan Fertilizer Corporation Limited (HFC)
Paradeep Phosphates Limited (PPL)
Fertilizers & Chemicals Travancore LTD. (FACT)
Rashtriya Chemicals & Fertilizers Limited (RCF)
The Fertilizer Corporation of India Limited (FCI)
Steel Authority of India Limited (SAIL)
Madras Fertilizers Limited (MFL)

[br]Reports showed the total installed capacity of fertilizer production in 2004 to be 119.60 LMT of nitrogen and 53.60 LMT of phosphate. These figures went up to 120.61 LMT of nitrogen and 56.59 LMT of phosphate in 2007. The production of fertilizers was 113.54 LMT of nitrogen and 42.21 LMT of phosphate during 2005-06. The target of production for 2006-07 was set at 114.48 LMT of nitrogen and 48.20 LMT of phosphate. Though the target production was not met, there was a growth in production during 2006-07 as compared to the production during 2005-06.

Indian fertilizer industry has reached international levels of capacity utilization by adopting various strategies for increasing the productions of fertilizers. These include the following:

Expansion and increase in efficiency through modernization and revamping of existing fertilizer units.

Reviving some of the closed fertilizer plants.

Using alternative sources, such as coal or liquefied natural gas for the production of fertilizers, especially urea.

Establishing joint venture projects with companies in countries that abound in cheaper resources of raw materials.

In order to meet the demand for gas, which is one of the prime requirements for the production of nitrogenous fertilizers, India has entered into joint ventures with foreign companies in a number of countries. Joint ventures have also been established for the supply of phosphoric acid. Indian fertilizer manufacturing companies has joined hands with companies in Senegal, Oman, Jordan, Morocco, Egypt, Tunisia and other countries.

It is, therefore, evident that the Indian fertilizer industry has witnessed extensive growth and development in a short span of time. With such extensive growth, it is not surprising that the India ranks among the leading fertilizer manufacturing countries of the world.