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   GOVT. ’s  PROPOSAL TO REVIVE DEFUNCT  FERTILISER PLANTS FACTORS  THAT  NEED TO BE LOOKED INTO   Government  of India appears to have decided to push through the revival of the defunct fertiliser plants at Gorakhpur, Sindri, Barauni, Ramagundam and Talchar, which stopped operating more than a decade back. The Prime Minister’s Office is reported to have put in place an action plan to invest several thousand crores of  rupees to revive the three defunct fertiliser units  located  at Gorakhpur, Sindri and Barauni, with public sector funding, by early 2020. Considering the need for promoting  large scale investment in the country to  spur growth and the reluctance of private sector, the proposal should be viewed positively. Government’s proposed action plans Indian Oil Corporation will join Coal India and NTPC Ltd to form a joint venture called Hindustan Urvarak and Rasayan Ltd. The new entity will revive three sick fertiliser plants at Sindri (Jharkhand), Gorakhpur (Uttar Pradesh) and Barauni (Bihar), at a total investment of around Rs.20,000 crore. Fertiliser Corporation of India Ltd will also have a small share in the venture. Government of India has decided that since Coal India, NTPC and Indian Oil Corporation are cash rich public sector enterprises, they will contribute equity to revive the three fertiliser plants. The fertiliser plants will be the anchor customers for the Phulpur-Dhamra-Haldia pipeline being built at  cost of over Rs.12,000 crore.The pipeline is being built in three phases, slated for completion by December 2019. Earlier, public sector undertakings namely NTPC and Coal India Ltd (CIL) signed a joint venture agreement for reviving the closed  naphtha based Gorakhpur and Sindhri urea fertiliser units of the near defunct Fertiliser Corporation of India (FCI) with the investment of around Rs.18,000 crore, with  debt: equity ratio of 2:1, with public sector firms (NTPC, CIL and IOC) bringing in around Rs.2,000 crore of equity each. RCF,GAIL and Coal India Ltd were asked to take the responsibility of reviving Talchar unit using coal as  feedstock. Urea plant at Ramagundam has been proposed to  be established by the Ramagundam Fertilisers & Chemicals, a joint venture between NFL, EIL and FCIL, with an estimated investment of   around Rs. 5,254 crore. Ground reports suggest that  little progress  has been made so far in reviving Talchar  and Ramagundam units. Poor response from private sector Earlier, Government of India attempted to prompt private sector to revive the above sick fertiliser units and the efforts of the government were unsuccessful . In March 2016, Minister of State for Chemicals & Fertilizers told Parliament that the Gorakhpur unit attracted only one bidder who turned out to be ineligible. The unwillingness or inability of the private sector to invest in projects to revive the defunct fertiliser units are evident. Obviously, Government of India has no alternative other than taking steps to revive the units by investing on its own. Feedstock for urea projects The urea projects  proposed to be revived have to be necessarily based on natural gas, so that  they would be economically viable and would also meet environmental stipulations. Government of India has taken a decision that naphtha based urea projects will not be approved in future. Coal based  urea projects may prove to be controversial in view of the environmental issues involved, particularly in the context of the Government of India’s commitment to  Paris Climate Conference. It is extremly doubtful as to whether  the coal based urea projects will take off The revived units in Sindri, Gorakhpur have to  use natural gas as raw material. One of the biggest problems facing these fertiliser units’ revival is feedstock (natural gas) availability. The proposed pipeline to ferry the gas from Jagdishpur to Haldia could not take off so far, as there were no confirmed takers for the gas. Proposed sometime in 2005, the pipeline is still on the drawing board stage.GAIL has been asked to complete this long delayed Rs.12,000 crore gas pipeline project by the time the gas based fertiliser units would be ready to commence production. Why not term them as new projects ? While the feedstock for the projects have to be  natural gas, the feedstock used in the earlier operation of the plants was different. The defunct fertiliser units have been remaining closed  for many years now and obviously, the machineries are outdated and must be in bad condition. The engineering and technology practices have undergone much change for better in recent years. Therefore, revival of the  defunct fertiliser units  will not be possible with old technology, plant and machineries and plant layouts. Almost the entire facilities have to be changed. Therefore, it would be appropriate to scrap the  old plant  and machineries entirely and sell them off for scrap value. Even the building must be in bad condition and may defy the present safety regulations. Modifying the old  and outdated plant and machineries and layout of the building to suit the new technology would prove to be a counter productive exercise from the view point of feasibility and cost factors. Under the circumstances, it would be appropriate to declare that new urea projects would be set up in the same land terming them as new and greenfield projects, instead of  calling them as revival projects.Such announcement would provide greater clarity and confidence to the investors and technical collaborators. Put the land to optimism use The defunct units have large area of land available. So much area of land will not be required for the modern urea projects with optimised design. Therefore, the surplus area of land can be offered to private sector. which can use the surplus land for setting up ancillary projects that would serve the needs of urea fertiliser units. Need to assess long term feedstock (natural gas) demand supply scenario There is no likelihood of substantially increasing the production of natural gas in India in the near future. On the other hand, Indian production of natural gas  has shown declining trend  in recent years. Natural gas production Year (April to March) Natural gas production (BCM) % Growth in natural gas production 2009-10 47.496 44.61 2010-11 52.219 9.94 2011-12 47.559 -8.92 2012-13 40.679 -14.47 2013-14 35.407 -12.96 2014-15 33.656 -4.94   Import  of LNG Period (April to March) Import   Quantity in BCM 2008-09 10.9616 2009-10 12.441 2010-11 13.506 2011-12 17.971 2012-13 17.865 2013-14 17.724 2014-15 21.039   India’s import dependence of natural gas has been increasing at annual average growth  (AAGR) of 11.48%  in the past few years. The requirement of natural gas for operations of the three fertiliser plants at Gorakhpur, Sindri and Barauni  for producing total of around 4 million metric tonne per annum of urea would be around 2.8 billion cubic metre . It is not  clear whether the Government of India has made a comprehensive action plan with reference to  domestic demand, domestic  supply  and import scenario for natural gas in the forthcoming years. Several adhoc and hasty announcements have been made in the past, which have provided more confusion than clarity and confidence. Quite a few LNG terminal projects are  under construction and more are being planned, even while a few LNG terminals are operating at below capacity due to lack of connectivity.  The country is committing itself to huge consumption of natural gas for use as feedstock and fuel  in future with indigenous production not increasing. This may prove to be a calculated risk, particularly since the global price of natural gas is bound to go up in future. What demand for urea ? Production and import of urea are as follows Period (April to March) Production Import   In 000 tonne 2011-2012 21,992.3 7,834 2012-2013 22,586.6 8,044 2013-2014 22,718.7 7,088 2014-2015 22,592.9 8,749 2015-2016 24.5 8.3   According to Chemical and Fertiliser Minister, Government of India “At present, all 30  urea plants  public and private sector, are operating at 120% capacity.Therefore, urea production is likely to increase by 1 million metric tonne to 25.5 million metric tonne in the year April 2016 to March 2017.”. Source: Financial Express dated 16.6.2016   Recently, Government of India has taken measures to optimise the use of urea in the country by insisting on the production and use of neem coated urea. While it is claimed that consumption of urea have come down in the country due to the neem coated urea policy, it is necessary to assess the impact of this policy  in precise terms, so that the country would know as to what would be the precise requirement of urea in the coming years. As the area of agricultural land is unlikely to increase, the growth of urea consumption  may even slow down. Urea projects in pipelines Matix Fertilisers and Chemicals Ltd., near Panagarh in West Bengal has been idling after investing around Rs.5000 crore in urea project due to non availability of coal bed methane (CBM). Non availability of CBM has forced the company to re schedule the commissioning date for the plant several times since 2013. In the wake of the new investment policy, the Fertiliser Ministry is reported to have received 11 proposals for urea projects, out of which a few proposals are for setting up new units and the rest for capacity expansion of existing plants. Private companies including Zuari Agro Chemicals, Indo Gulf Fertilisers, Chambal Fertilisers, Bharat Coal Chemicals and Nagarjuna Fertilisers and Chemicals Ltd have submitted proposals. Also, four PSUs – Rashtriya Chemicals and Fertilisers (RCF), GNFC, GSFC and FACT have proposed to set up urea projects under the policy. Chambal Fertilisers and Chemicals Ltd is setting up 1.34 million metric tonne urea plant at Kota in Rajasthan with an estimated investment of Rs 5,940 crore. The state run Rashtriya Chemicals and Fertilizers (RCF)  proposes to go to the public investment board for setting up its third plant in Thal, Maharashtra. Plans are afoot by IFFCO to set up grassroots nitrogenous fertilisers project in the Nellore district of Andhra Pradesh.The project is estimated to cost Rs.1,560 crore and  will have an annual capacity of producing 7.26 lakh metric tonne of urea. In addition to the above project proposals, the proposal for the revived urea project at Sindri, Gorakhpur,Barauni, Talchar and Ramagundam may  have urea capacity of 1.3 million metric tonne per annum each . An integrated long term urea project plan is now vitally  necessary, so that there would be no wastage of resources in building capacity for urea beyond what the country need in future. The country should be clearly told about such policy approach. Make  or buy  decision for urea There is a view that Indian dependence on import of urea to the extent of more than 8 million metric tonne per annum  is not appropriate and  India has to take necessary steps to build indigenous capacity for urea to reduce  it’s import of urea. At the same time , lack of availability of natural gas in India and the need to import natural gas and possible international price fluctuation of natural gas may make economy of future  urea projects in India to be a matter of concern. Given such circumstance, the question remains whether it would be appropriate for India to make urea or import urea. This question is not adequately clarified by the government’s  policy announcements so far. Why not set up a few urea projects abroad ? China is a large producer of urea in the world and will continue to dominate global market due to surplus  production. The low cost of energy in some regions such as US,Russia, Middle East and Iran will provide definite advantage  for these countries in producing urea at low cost. With India having no particular feedstock advantage, question arises as to whether India would be justified in building large urea capacities, since the new and revival projects have to be competitive with urea produced in other parts of the world. While it is important that India becomes self sufficient in the production of urea to the extent possible, it may be appropriate for India to consider setting up urea projects in other regions in the world, where feedstock would be readily available and energy costs would be low. Oman India Fertiliser Co is a joint venture with Oman Oil Company (50%) IFFCO (25%) and KRIBHCO (25%) which is operating with  urea capacity of 1.653 million metric tonne per annum at  Oman. IFFCO plans to build a $1.2 billion urea production plant in Canada in partnership with Canadian company La Coop federee.IFFCO and la Coop federee plan to begin construction in Quebec in two years. The plant would produce up to 1.2 million metric tonne urea annually, which will be split evenly between IFFCO and La Coop. More of such projects can be set up as joint ventures  abroad,where there would be ready availability of natural gas at low price,  with firm commitment to supply the urea product to Indian market. One is not sure as to whether the government has considered these  options, while chalking  out plans for setting up new urea projects in India and revival of the closed ones. Unrelated diversification In its anxiety to boost the investment climate and revive the defunct fertiliser projects, Government of India is asking the public sector organisations such as Engineers India Ltd, Coal India Ltd, NTPC to invest in the fertiliser projects, which means that they also will have to participate in the management of these units to some extent. Organisations like NTPC, Engineers India Ltd have not been  involved  in manufacturing fertilisers or management of fertiliser projects so far. Coal India also does not have such experience. Such unrelated diversification activities of these public sector organisations will do good neither to them nor to the proposed urea projects. On the other hand, organisations like NTPC, Engineers India Ltd, Coal India Ltd have lot of unfinished agenda on hand and they need resources and management time to fulfil their targets and meet the expectations. Under the circumstances, the Government of India should re examine whether it would be appropriate to involve such public sector organisations in the revival of the defunct fertiliser units.  
  In recent months ,Prime Minister Narendra Modi has been paying great attention to achieve his chosen goal of making India a member of Nuclear Supplier Group (NSG). Mr. Modi’s recent visit to Switzerland, Mexico and USA appear to have been largely focused on enlisting the support of these countries for India’s entry into NSG. In the process of Mr .Modi’s vigorous campaign, India has been subjected to criticism from some quarters about the nuclear tests that were carried out by India two times in the past, which were very critically and adversely viewed by many countries. To counter such criticism , Mr.Modi has to walk extra mile and tell NSG members that India would not repeat “such mistake” in future. It is surprising that Mr. Modi has persisted with what appears to be his obsession to get into the NSG , even when the rule clearly says that all 48 members must endorse entry of a new member and China has vehemently opposed India’s entry . To complicate the matter further for India, countries like Pakistan has also sought entry into NSG. Following details are discussed in this article
  • No significant benefits
  • Availability of uranium for India
  • Other viable options
  • Not a matter of prestige
  High purity alumina (HPA), which is the high end form of aluminium oxide, has a wide range of industrial and high tech specialty end uses. Characterised by  minimum purity of 99.99% (4N) Al2O3, HPA is the high end, high value product of the non metallurgical alumina market. Due to its superior characteristics such as purity, extreme hardness and corrosion resistance, HPA is the essential base material for artificial sapphire substrates found in LEDs, also semiconductors and growing range of high performance applications. CAS Number 1344-28-1 Molecular formula Al2O3 Appearance White powder Solubility Insoluble Melting Point Range >2000 deg. C On the basis of purity, the global  high purity alumina (HPA) market can be divided into the following products *          4N category - 99.99% Al2O3, with an impurity level of only 0.01 percent (100ppm) *          5N category - 99.999% Al2O3, with an impurity level of only 0.001 percent (10ppm) *          6N category - 99.9999% Al2O3, with an impurity level of only 0.0001 percent (1ppm)   Majority of global HPA sales and demand is for the 4N category. Specification of 4N High Purity Alumina (HPA) Description Units Specification Al2O3 % 99.99 Si ppm 11.1 Na ppm <0.100 Fe ppm <0.100 Crystal Type   α (alpha) Particle size distribution <140µm   >=77 Particle size distribution <80µm % >=55 Particle size distribution <45µm   >=31 Particle size distribution <20µm   >=10 Surface area (BET) m2/g 70.69 Colour   White Following details are discussed in this article
  • Thrust area for demand
  • Use of high purity alumina in lithium ion batteries
  • Growth of lithium ion battery sector
  • Global demand
  • Global pattern of demand
  • Producers
  • HPA Processing Technology
  CAS No     69-65-8 Appearance White, odourless, crystalline powder Molecular formula   C6H14O6   Product specification Description Value Assay Not less than 96.0% and not more than 102.0% on the dried basis Loss on drying Not more than 0.3% Sulfated ash Not more than 0.1% Chlorides Not more than 70 mg/kg Sulphates Not more than 100 mg/kg Nickel Not more than 2 mg/kg Reducing sugars Not more than 0.3% Total sugars Not more than 1.0% (as glucose) Following details are discussed in this article.
  • Product application
  • Indian import
  • Demand growth through 2021
  • Indian demand in 2016
  • Industrial synthesis
  • Biosyntheses
  • Natural extraction
  • Demand driver
  • Global demand
  • Global producers
  • Prognosis
  Dimethylaminopropylamine  (DMAPA) contains one primary and one tertiary amine group, which makes it of interest in many applications CAS Number 109-55-7 Molecular Formula C5H14N2 Synonyms DMAPA, 3-(Dimethylamino)propylamine, Dimethylaminopropylamine, N,N-Dimethyl-1,3-propanamin, 1-(dimethylamino)-3-aminopropane, N,N-Dimethyl-1,3-diaminopropane, N,N-Dimethyl-1,3-propylenediamine DMAPA, is biodegradable and is a flammable material. DMAPA as the undiluted product is irritating to the eyes, skin and mucous membranes of exposed individuals.    Specification Parameter Value Appearance Clear and substantially free of foreign matter Colour, Pt- Co 25 max DMAPA, wt. % 99 min Water, wt. % 0.2 max Following details are given in this article
  • Applications
  • Manufacturing Process
  • Global scenario
  • Producers
  • DMAPA share of capacities of selected global producers
  •  Indian  import / Export
  There are large number of desalination plants worldwide with heavy concentrations in North America's West Coast and the Middle East. The likelihood is that the number of desalination plants will increase  across the world, as climate change and population growth further impact water stressed areas. Sorek Desalination Plant in Israel is  the world’s largest desalination plant. Sorek Desalination Plant has been operating for a little over two years in Israel and provides some 20% of the municipal water demand in Israel. Courtesy: Filtration + Separation May/June 2016 Following details are discussed in this article
  • Typical processes for desalination technology
  • Trends in reverse osmosis
  • Sorek desalination plant
  • Large diameter (16 in) membrane elements:
  • Pipe jacking
  Swaminathan Venkataraman, Director, Nandini Consultancy (S) Pte Ltd, Singapore   It is reported that during the year 2015, around 9 billion USD worth of capital has been pumped into the Indian start up enterprises. No doubt, this is a very impressive figure, which has happened largely due to the entrepreneurial spirit shown by Indians, particularly the young ones and the readiness with which the private equity fund investors have supported the start up companies. It is high time that a careful evaluation and analysis of the trend and progress of Indian start up enterprises should be carried out , so that corrective steps, if required , can be initiated and a sense of direction can be given to the start up movement based on the recent performance and in tune with the need of the country. While studying the performance of the start up projects, it can be seen that there are two areas of concern. Following details are discussed in this article
  • M&A deals
  • Areas of investment
  • Lack of activities in manufacturing sector cause for concern
  • Need for investigation and corrective measures 
In Industrial enterprises, there are traditionally five stakeholders namely project promoters, employees, clients/consumers, financial institutions extending loans and the government . These stake holders are directly or indirectly affected by the performance of the industrial enterprises. In recent years, a new category of stakeholders have come into the picture known as private equity fund holders. Role of private equity fund holder in management of industries are now increasingly seen all over the world. Whether this phenomena has contributed to the betterment of industries or contribute to destabilize the industries remain as matter of debate Following details are discussed in this article,
  • What approach by private equity fund holders?
  • Case study of Vertellus
  • Dow-DuPont merger driven by private equity fund holders
  • Are private equity fund holders irksome partners?
As assessment of the impact of the European Chemicals Regulation, REACH ( Registration, Evaluation, Authorisation and Restriction of Chemicals) was carried out by the European Chemical Agency (ECHA), based in Helsinki (Finland). The report was released on May 27, 2016. Highlights of the report is discussed. Following details are discussed in this article
  • How far has REACH reached ?
  • Candidate list for eventual phase out
  • May 2018 milestone
  • New generation IT tools
  • Disputes
  • Expectations by 2018
  • Challenges
  Following articles discusses about the closure of following plants
  • Andhra Petrochemicals temporarily shuts plant
  • Soda ash production at Egyptian site
  • Stepan to close Longford Mills facility in Canada
  The antidumping measures introduced in  the last few weeks on the following products are discussed
  • PTFE
  • Dichloromethane (Methylene Chloride)
  • Neoprene
  • Purified terephthalic acid (PTA)
  • Solar grade Polysilicon
  The recent developments on the following products/events are discussed
  • Natural L-methione
  • VAM
  • HFO-1234yf
  • Titanium dioxide
  • Expandable polystyrene
  • Ethylene vinyl alcohol
  • Aliphatic polyisocyanates
  • Production of plastics using CO2
  • Helium gas reserve found in Tanzania
  • PP compounds for automotive
  • Lithium hydroxide
  • Caustic chlorine project of Ercros
  • Li-ion battery separators project
  • Glycidyl methacrylate
  • VCM capacity expansion in Indonesia
  • Methionine output expansion at Japan site
  • Olefin production complex in South Korea
  The recent developments  in China are discussed in the following articles
  • Hydroquinone, MEHQ capacity
  • Polyamide chip project
  • MEG project
  • Monochloroacetic acid
  • Tire cord fabric capacity expansion in China
  • Hexamethylene diamine
  • Cycolxylidin
  Recent developments on the following products are discussed
  • Hollow fiber nitrogen-separation membrane
  • New method to make glass from nanoparticles
  • UOP MaxEne Process
  • Hydrogen fuel production from sunlight
  • Ultra-thin, flexible solar cells to power wearable electronics
  • Pilot plant for high temperature superconductors
  • Plastic surface to repel sticky fluids
  • New bio ink for 3D printing with stem cells
  • Coal to plastics technology developed by Honeywell UOP
  • Efficient separation of nitrogen from air
  The recent developments on the following products/events are discussed
  • Integrated bioenergy mission
  • Transport of LNG via road
  • Status of ethanol blending programme
  • Proposed biogas plants
  Recent developments in the agro fields are discussed in the following article
  • Glyphosate  - Regulatory issue in Europe
  • Value added products from coconut
  • Wastewater project boosts crop yield
  • Photosynthesis to boost rice yields
  Recent developments in the energy  fields are discussed in the following articles
  • Production of CBM
  • Shale gas found at Raniganj coal block
  • Import of solar panels triples in 2015-16
  • Draft wind solar hybrid policy
  • Cleaner jet fuel from algae
  Recent development in nuclear waste disposal is discussed in the following article
  • Finland to bury nuclear waste for 100,000 years