Fertiliser major plans Rs.30 bn expansion at Gujarat plant

August 23rd, 2008 - 11:03 am ICT by IANS  

Ahmedabad, Aug 23 (IANS) Leading fertiliser maker Indian Farmers Fertiliser Cooperative Ltd (IFFCO) has said it will expand the production capacity of its Kalol urea plant in Gujarat at a cost of Rs.30 billion once natural gas from the Krishna-Godavari basin starts flowing to the state.Set up in 1975 at an investment of Rs.750 million, the Kalol plant currently produces 550,000 tonnes of urea annually.

According to Ajay Misra, senior general manager of the Kalol unit, there are strong indications that gas from the Reliance Industries Ltd’s Krishna-Godavari basin will be made available by the end of this year or early next year. The gas will be transported by the Gujarat State Petroleum Corp.

“This has encouraged us to start working on an expansion programme for the Kalol unit. We plan to enhance the production capacity to 4,000 tonnes per day. The gas for the project will come to Jamnagar from where it will be piped to Kalol,” Misra told IANS.

The Kalol facility has not received any major investment for expansion for the last one decade.

The last expansion was commissioned in 1998. “There was no major investment for capacity expansion because despite repeated efforts, there was no assurance on the availability of gas. Whatever little investments were made were on installing energy-saving devices,” said A.K. Sinha, the previous head of the unit.

Earlier, the Kalol plant had planned a natural gas-based power project of 1,000 MW capacity. However, the project did not take off, as there was no assurance of gas availability from the Gujarat government.

IFFCO’s second Gujarat unit, located at Kandla, about 300 km from Ahmedabad, is also facing capacity expansion problems. With the price of phosphoric acid, a key raw material, going through the roof, expansion plans are unlikely to take off.

Further, it is also finding it difficult to secure supplies even at higher prices.

A company official told IANS that the Kandla unit, whose six plants produce di-ammonium phosphate and complex fertiliser, has to contend with “occasional” de-bottlenecking operations.

IFFCO, which has drawn up a ‘Vision-2010′ programme, has said it will focus on setting up ammonia or urea plants and acquisition of fertiliser units in the near future.

By 2010, the company aims to achieve an annual turnover of Rs.150 billion.

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