Sucheta Dalal :Fertilizer Corporation to revive its sick Sindri urea plant
Sucheta Dalal

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Fertilizer Corporation to revive its sick Sindri urea plant  

February 2, 2010

With the rising demand for urea in the country, state-run Fertilizer Corporation of India (FCI) is planning to revive its Sindri-based plant in Jharkhand, a senior official said.


“FCI has chalked out a revival plan for the Sindri unit, in view of the increasing demand-supply gap in the availability of urea in the country,” a senior FCI official said. The demand for urea is expected to increase by about 3% in 2011.


However, according to local media reports, Jharkhand’s industrial secretary NN Sinha had said that ArcelorMittal was interested in using 6,000 acres of the ailing FCI unit at Sindri. Officials from ArcelorMittal visited Dhanbad during the third week of January and assessed the pros and cons of setting up a proposed 12-MT steel mill in the state by investing Rs40,000 crore, the report said.


FCI’s Sindri unit was closed in 2002 and was under the Board for Industrial and Financial Reconstruction (BIFR). FCI filed a review petition in the High Court, which directed it to approach BIFR for reconsideration.


The Projects & Development India Ltd (PDIL) in 2005 had submitted its report to the Union government on the revival of the Sindri unit. The report had suggested two alternatives. One was to make the plant functional as soon as possible and the second option was to improve the performance and energy efficiency of the facility. However, the FCI board did not accept this proposal and instead proposed a brown-field, gas-based plant.


Before the Sindri unit was shut down, it was supplying urea, nitric acid, ammonium nitrate, ammonium bicarbonate, liquid nitrogen, oxygen and ammonia to the eastern region.


The FCI plan is still in the preliminary stage. However, officials say that the plant would annually produce one million tonnes of urea. But construction dates for the revival of the plant have not been finalised. However, the FCI official added that the construction process for the revival of the plant would take at least three years.


FCI has made a detailed plan for the revival of the unit which entails an investment of nearly Rs4,000 to Rs5,000 crore, he added. The fertiliser company has already got an in-principle approval from the government and is waiting for a Cabinet nod.


“We are also in search of global tenders and project partners,” the official said.


However, another FCI official said that it would be giving its Sindri revival feasibility study contract to Deloitte as per the Union government’s decision. Deloitte would be looking into the feasibility of the facility and will also seek potential partners for the company.


FCI’s intention to revive the plant comes at a time when global urea demand is expected to increase by 4.7% per annum during the period 2008-2012 with the demand-supply gap expected to remain tight and supply just managing to meet demand.


According to a report by Chemical Weekly, India’s fertiliser demand is expected to increase by about 4.3% per annum from FY2008-FY 2013, higher than the global growth rate of 2.8% per year for the same period.
Aaron Rodrigues

-- Sucheta Dalal