After a year of deliberation, India’s largest fertiliser maker by capacity and revenue, Rashtriya Chemicals and Fertilizers Ltd (RCF) has decided to enhance production capacity at its facility located at Thal near Mumbai, said a senior official.

"There is greater demand for urea from the agriculture sector which in turn made us to think about increasing production capacity at our Thal plant," said the official, who did not want to be named.

The state-run entity is planning to increase its urea production capacity to 3.15 million tonnes (MT) per annum from the current 2MT. According to sources, it may cost the company about Rs4,000 crore and RCF may conduct a feasibility and viability study in a year’s time.

There could be one more reason for the state-run company’s expansion plan based on the additional gas supply it would get from Reliance Industries Ltd’s Krishna Godavari (KG) basin. This could cut down the cost of production for urea.

According to an agreement, RIL would supply 2.1 million standard cubic meters per day (MSCMPD) of gas to RCF’s Thal facility. Thal will also get gas from state-run Gas Authority of India Ltd (GAIL).

RCF has another facility at Trombay near Mumbai. However, due to logistical reasons, the company finds it easier to enhance production at the Thal facility rather than Trombay, the official said.

Earlier, RCF had one operating unit at Trombay and two prominent projects under implementation, the Trombay-IV Expansion and Trombay-V Expansion.

In 1985, RCF’s greenfield mega-fertiliser complex at Thal in Maharashtra became operational. It is running on full stream currently.

— Aaron Rodrigues