India eyeing overseas for its fertilizer capacity building

To augment the prodn of fertilisers in the country, India is now looking forward and establish the manufacturing facilities well at the place of its resource. In this course, India has already signed a pact with Syria, and is in the process of working out agreements with Saudi Arabia and Indonesia, without making much hue&cry. A feasibility study was also conducted for these projects, jointly by Projects and Development India Ltd (PDIL) and RITES at a cost of $1.5 million for the GOI. Although the domestic supply of DAP has exceeded demand this year, the increased capacity abroad will help hedge against future shortfalls. Rock phosphate, the main ingredient required for the production of DAP, will be provided by Syria. According to estimates, Syria has rock phosphate reserves to the tune of 1,800 mt, with an annual production capacity of just 3 mt. This rock phosphate reserve, the 11th largest in the world, could last Syria at least another 100 years. India is also looking to establish gas-based urea production capacities in Saudi Arabia and coal-based urea production facilities in Indonesia. Analysts say that the landed cost of gas in Saudi Arabia comes to about $1.2 per million British thermal unit (mmBtu), as against $6-6.5 per mmBtu in India. So, although the cost of setting up a urea plant in Saudi Arabia would be the same as in India, the feedstock cost would be a fifth of that in India. India is looking to set up a coal-based urea plant in Indonesia. Indonesia is the sixth largest producer of coal in the world. Analysts say that although Australian coal is superior in quality, low-ranked Indonesian coal is cheaper and, therefore, increased demand will force India to increasingly switch to Indonesian coal. In countries like China, coal gasification is fast becoming the preferred method for urea production. So Indonesia, with its huge reserves of relatively cheap coal, is an ideal place to set up captive capacitie. India’s annual urea consumption is 27 mt, as against a domestic production of 22 mt. The deficit is made good by imports.