Published on December 30, 2013
Year 2012-13 remained a difficult year for fertilizer industry. Industry remained in elated mood due to abundant rainfall and favorable monsoon but the ever increasing inflation rates, currency fluctuations and slowdown in economy could not sustain the growth for the industry. The overall sales of fertilizer declined by 11 percent to 53.4 million MTS from 59.9 million MT in the year 2013. Furthermore, constant delays in subsidies by government added to the liquidity crisis. Industry constantly urged the government to provide subsidy for current fiscal year. Besides subsidy issue, constant rise in the prices for natural gas and depreciating currency are certain other issues that beleaguered the industry.
Addressing to all these problems, finally government allotted package of 5,500 crore to financially starved fertilizer industry. Recently Agrochemicals manufacturing company Insecticides India Lt. (IIL) announced its expansion plan of worth Rs.200 crore. The company further disclosed their total turnover for 2012-13 which was around Rs.650 crore and is expecting to cross Rs. 900 crore in the current financial year. Company invested a substantial amount for RnD and has come up with some new products and looking for their patents. Company is very positive for the Indian markets.
In a recent move, ONGC stated to invest 5000 crore for urea plant in 2014. The plant will be established at Unakoti, Tripura. Company official further said that this project will make up the demand of north east India and large portion could be exported to Bangladesh. Close proximity to Khobal gas will ease the supply of natural gas for the plant.
For the next financial year, industry is positive in terms of demand and is expecting it to be better than 2013. Right now industry is waiting for the approval of new projects which are directly dependent on gas supply. But issues of subsidy, short term borrowings, gas pricing and currency depreciation will continue to challenge the growth of the industry in the upcoming years.
