The Fertilizer Industry In India Environmental Sciences Essay

The fertilizer plant was established in 1906 in Tamil Nadu. The growth of the fertilizer industry began in 1951 with plant establishment by Fertilizer Corporation of India. The constant demand of fertilizer resulted in Green Revolution and lead to spreading of industry in industry in several parts of India. Today, Tamil Nadu, Uttar Pradesh, Gujarat, Kerala and Punjab produce over half of the total produce of fertilizer required in India. Apart from them, Andhra Pradesh, Rajasthan, Orissa, Bihar, Assam, Maharashtra, Rajasthan, West Bengal, Madhya Pradesh, Delhi, Goa and Karnataka are also important producers of fertilizers. The ease of obtain ability of natural gas resulted in the wide spread of the fertilizer industry. India produces nitrogenous nearly 11 million tones, phosphate 4 million tones and potash fertilizers to 1.7 million tones. The country imports potassium from abroad.

Chemical and bio fertilizers play a vital role in the success of green revolution in India. India is basically an agriculture focused economy flourishing on Indian fertilizers. With green revolution, Indian fertilizer manufacturers and suppliers have enhanced their production and have attained self-sufficiency in the needs of Indian fertilizers. The industry of Indian fertilizers is associated sectors of agricultural sphere. India surfaced as the largest producer of chemical fertilizers, nitrogenous fertilizers as well as bio fertilizer in association with unvarying endeavour of manufacturers and suppliers of fertilizer. Today, India can boast of having surplus food grain and this excess are facilitated due to the Indian fertilizers. The manufacture and fertilizers supply is viewed as the most energy process in the Indian industry. The nitrogenous as well as bio fertilizers have great impact on the use of energy and the determining factors for efficiency of energy in the industry are feed stocks, technology, capacity utilization and plant age.

Indian government formulated policies favourable to the fertilizer suppliers, consumers and manufacturers. This was supported by numerous committees and was formulated by the Indian government to determine the policies regarding fertilizers. The increase in the fertilizer industry is approved to favourable policies. Now, there are many fertilizer units and supply a wide range of fertilizers. This is apparent from the steady global demand for Indian fertilizers that is being fulfilled. Recent years is viewing a demand for organic fertilizers besides inorganic fertilizers. Many private fertilizer companies are showing positive gesture by setting plants in various countries and are elevating the demand for chemical and bio fertilizers. The fertilizers industry in India has a good and bright future in the market. The Indian government is offering optimal support by subsidizing raw materials as well as by relaxing the export policies and this is found to be favourable to the fertilizer companies.

• Fertilizers are chemical compounds applied to promote plant and fruit growth. Fertilizers are usually applied either through the soil (for uptake by plant roots) or, by foliar feeding (for uptake through leaves).

• Fertilizers can be placed into the categories of organic fertilizers (composed of decayed plant/animal matter), or inorganic fertilizers (composed of simple chemicals and minerals)

• .Organic fertilizers are ‘naturally’ occurring compounds, such as peat, manufactured through natural processes (such as composting), or naturally occurring mineral deposits

• Fertilizers typically provide, in varying proportions, the three major plant nutrients:

Industrial Environment of Fertilizers.

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Cadmium is produced mainly as a by-product of mining, smelting and refining of zinc and, to a lesser degree, as a by-product of lead and copper production. It is therefore primarily a function of zinc production rather than cadmium demand.

Major shifts in smelting and refining technology (from pyrometallurgical to hydrometallurgical processes) have led to significant decreases in releases of cadmium to the environment.

Cadmium is used and traded globally as a metal and as a component in various products, in particular in batteries until it was banned in a number of countries.

Other major uses of refined cadmium are:

• Pigments for plastics,

• Ceramics and enamels;

• Stabilizers for plastics;

• Plating on iron and steel; and

• alloying element of some lead, copper and tin alloys.

Since 1990, the consumption of such products has been decreasing significantly because of the awareness of the detrimental impacts on health and the environment.

Waste management systems have increasingly been put in place in industrialized countries to reduce releases of cadmium into the environment. However, some of the uses of cadmium which have been phased out in developed countries have continued or even increased in developing countries.

INDUSTRIAL SOCIETY

This leads to the rise of very large cities and surrounding suburban areas with a high rate of economic activity.

• These urban centers require the input of external energy sources in order to overcome the diminishing returns of agricultural consolidation, due partially to the lack of nearby arable land, associated transportation and storage costs, and are otherwise unsustainable. Industrial societies are generally mass societies.

• Industrial society is characterized by the use of external energy sources, such as fossil fuels, to increase the rate and scale of production. The production of food is shifted to large commercial farms where the products of industry, such as combine harvesters and petroleum based fertilizers, are used to decrease required human labor while increasing production.

• No longer needed for the production of food, excess labor is moved into these factories where mechanization is utilized to further increase efficiency.

• As populations grow, and mechanization is further refined, often to the level of automation, many workers shift to expanding service industries.

MAJOR PRACTICES IN AGRICULTURE INDUSTRY

• Agriculture refers to the production of food and goods through farming and forestry. Agriculture was the key development that led to the rise of civilization, with the husbandry of domesticated animals and plants (i.e. crops) creating food surpluses that enabled the development of more densely populated and stratified societies. The study of agriculture is known as agricultural science (the related practice of gardening is studied in horticulture).

• Agriculture encompasses a wide variety of specialties and techniques, including ways to expand the lands suitable for plant raising, by digging water-channels and other forms of irrigation. Cultivation of crops on arable land and the pastoral herding of livestock on rangeland remain at the foundation of agriculture. In the past century there has been increasing concern to identify and quantify various forms of agriculture. In the developed world the range usually extends between sustainable agriculture (e.g. permaculture or organic agriculture) and intensive farming (e.g. industrial agriculture).

• Modern agronomy, plant breeding, pesticides and fertilizers, and technological improvements have sharply increased yields from cultivation, and at the same time have caused widespread ecological damage and negative human health effects. Selective breeding and modern practices in animal husbandry such as intensive pig farming (and similar practices applied to the chicken) have similarly increased the output of meat, but have raised concerns about animal cruelty and the health effects of the antibiotics, growth hormones, and other chemicals commonly used in industrial meat production

• Tillage is the practice of plowing soil to prepare for planting or for nutrient incorporation or for pest control. Tillage varies in intensity from conventional to no-till. It may improve productivity by warming the soil, incorporating fertilizer and controlling weeds, but also renders soil more prone to erosion, triggers the decomposition of organic matter releasing CO2, and reduces the abundance and diversity of soil organisms

• . Pest control includes the management of weeds, insects/mites, and diseases. Chemical (pesticides), biological (biocontrol), mechanical (tillage), and cultural practices are used. Cultural practices include crop rotation, culling, cover crops, intercropping, composting, avoidance, and resistance. Integrated pest management attempts to use all of these methods to keep pest populations below the number which would cause economic loss, and recommends pesticides as a last resort.

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• Nutrient management includes both the source of nutrient inputs for crop and livestock production, and the method of utilization of manure produced by livestock. Nutrient inputs can be chemical inorganic fertilizers, manure, green manure, compost and mined minerals Crop nutrient use may also be managed using cultural techniques such as crop rotation or a fallow period Manure is utilized either by holding livestock where the feed crop is growing such as in Managed intensive rotational grazing, or by spreading either dry or liquid formulations of manure on cropland or pastures.

• Water management is where rainfall is insufficient or variable, which occurs to some degree in most regions of the world. Some farmers use irrigation to supplement rainfall. In other areas such as the Great Plains in the U.S. and Canada, farmers use a fallow year to conserve soil moisture to use for growing a crop in the following year. Agriculture represents 70% of freshwater use worldwide

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The role of the fertilizer industry

• The fertilizer industry helps ensure that farmers have the nutrients they need to grow enough crops to meet the world’s requirements for food, feed, fiber and energy. The nutrients supplied by the industry

• The fertilizer industry encourages the adoption of Fertilizer Best Management Practices (FBMPs) as part of good agricultural practices.

Future trends in this industry

Fertilizer technology may be predicted by extrapolating from current developments. Mixtures and materials with high percentages of plant nutrients will dominate the field. Better ways of providing nitrogen, the most expensive of the three major nutrients, will be forthcoming, including increased use of anhydrous ammonia, ammonium nitrate, and urea. No leachable nitrogen, for example, can be obtained through the urea-formaldehyde (ureaform) reaction, and ammonium met phosphate offers a concentrated liquid product. Micronutrients, or trace elements, specific to particular geographical areas will come into increasing use, as will custom mixing and bulk selling of mixtures containing several nutrients based on reliable soil and plant data.

• may come into use; with the tape planted, no further fertilizer or water will be needed until growth is well established. Such techniques using biodegradable tapes have already been developed on a small scale for use by home gardeners. Finally, larger and more precise fertilizing machines will be developed and adopted.

The fertilizer sector in India holds a major share among the energy intensive industries of the country. The industry has shown unparalleled growth in the past few years. Although growing in an accelerating rate, the industry is faced with a number of challenges, inter alia, the lack of major plant resources such as nitrogen, phosphate and potassium

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• The government has established nine public sector undertakings in the Indian fertilizer market and one cooperative society, known as the Krishak Bharati Cooperative Limited (KRIBHCO) that functions under the supervision of the Department of Fertilizers in India. There are 63 large units dedicated to the production of fertilizers. Among these, 9 units produce ammonium sulphate while 38 units produce urea. There are 79 small and medium scale units producing single superphosphate.

ECONOMIC IMPACT ON THE INDUSTRY

The economy of the country does have considerable impact on the fertilizer industry in the following ways: The cost of this industry is quite high which is very difficult for the economy of the country to support especially in current circumstances. Natural Gas is the main requirement of this industry and it is very difficult to fulfill that. Recently the government has announced the cut in the supply of the Natural Gas in the shape of load shedding. When there is a boom in the agriculture sector of the economy, the demand of the fertilizers also gets increased which puts positive effects on the industry.

HUMAN RESOURCE ISSUES IN INDUSTRY

There would not be any of such issues in the industry as the educated human resource is easily available and for further enhancement in performance training should be conducted in companies both technical and interpersonal.

HURDLES IN MARKETING:

Ineffective distribution process. Prices are not same in all over Pakistan. Uneducated target market because of this marketing is difficult. New entrants discouraged. Rigid and slow reaction to market changes. Weak competition or shortages may lead to price gouging and/or product adulteration.

FINANCING EASILY AVAILABLE

Financing is easily available in this sector. The government is willing to develop this sector so that it would fulfill the requirements. Recently, two plants are opening; one is of Fatima Fertilizer and one of Engro Ammonia Plant. In project of Engro Ammonia Plant there is total investment of $1billion is needed, for which it has signed a syndicate loan of Rs 18.3 billion.

IMPACT OF POLITICAL PARTIES

As in India, there is a culture that all of the work related to Government would be easier only when you have good relationship with these parties. Fertilizer Industry has too much concern with the Government for availability of Natural Gas and Water, subsidy, anti-dumping duty, and custom free import and so on. All these factors have considerable effect on the profitability of the companies and without political parties help, companies will not be able to get these benefits. In the industry, all companies have very good and stable relation with the political parties and therefore enjoy benefits which they want to. So, we can say that the impact of political parties is positive on this industry

TRADE ISSUES RELATED TO FERTILIZER INDUSTRY

1. Agreement is being made that the market forces will be allowed to work, in the case of fertilizer imports.

2. To stop dumping in fertilizer industry the WTO regulation related to anti dumping must be applied in the industry for the industry benefit.

3. In case of import the fertilizer producing companies are exempted where as the non

4. The introduction of General Sales Tax on fertilizers should be carefully considered since it would have serious implications on price relations. 5. Market information and monitoring by the National Fertilizer Development Centre should be strengthened to serve as a real information centre for the fertilizer sector.

PROPOSALS GIVEN BY PEOPLE OF FERTILIZER INDUSTRY

The first point in proposal was about career development of employees People working in one section or department from years are still with the same knowledge and style of doing job.

There should be proper career planning of employee which results in better and improved output for the organization.

Some employees are working in the same department or section since they are appointed. Employees should be transferred with in departments so there is job variety that develops their interests, update their information and improve their performance.

Due to high rate of unemployment in the country people join those jobs which are against their interest so proper analysis should be done and explore those employee which can do better what they are currently doing in the organization

Management should take necessary action in implementing the safety organization.

OUR PROPOSALS

Strict quality control and monitoring should be there to prevent import of sub-standard products.

The problem of logistics should be looked into. Transportation through railway (being cheaper), especially during peak seasons should be made available.

There is a need to educate the farmers on balanced fertilizer use so as to neutralize the adverse impacts of constant use of nitrogenous fertilizers.

HUMAN RESOURCE REQUIREMENTS OF FERTILIZER INDUSTRY

Hiring quality manpower, keeping them happy, satisfied and motivated are the pillars of the Human Resources Department; justice, fair play and merit oriented treatment are some of the ingredients of processing cases by the Human Resources Department. For Human Resource development, another aspect which receives its due share is training. The employees are exposed to various kinds of cross training, technical courses, management courses, workshops and seminars both at home and abroad. Employees’ welfare has all along received due consideration by the Management

SPECIFIC TRAINING INSTITUTIONS

Following training institutions are available: 1. NFC Institute of Engineering and Technological Training 2. Technical Training Center (TTC)

NFC INSTITUTE OF ENGINEERING AND TECHNOLOGY : The NFC Institute of Engineering and Technological Training is the training centre of the National Fertilizer Corporation of Pakistan. It is a small engineering college established to meet the requirement of trained manpower for chemical process industry, especially in the fertilizer sector. A Training Centre was established in 1985.

Operators and Technicians

Supervisors

Engineers.

2. TECHNICAL TRAINING CENTER 25 Technical Training Center (TTC) lies in its expert faculty having rich plant operation and maintenance experience, functional pilot plants, well equipped shops for practice and access to FFC operating plants for real life demonstration. This institution conducts following programs: Training of engineers & technicians customized to Client’s specific needs. Fertilizer Technology Course for fresh engineers. Professional Management Curses. Apprenticeship Programs for operators & technicians. Skill Improvement Programs for operators & technicians in the areas of Plant Operations, Maintenance & Safety.

Supplier Power

No threat of forward integration. High Switching cost because it is difficult to contract with other groups and deal with them. Concentration is low. They act as separate groups competing for the same project. In this industry supplier has a high bargaining power, as most of them are Foreign Groups.

Buyers Power

Switching cost is low but does not have significant effect due to fixed prices. There are two substitute products available, Imported Fertilizer and Bio-Fertilizer. Production of bio-fertilizer is almost over and imported fertilizer is available at the same price because of anti-dumping duty and Government regulations for the prices of fertilizer for particular seasons are fixed. Although Buyers are large in numbers and purchases a large quantity as well, but buyers do not have a bargaining power. There is no forum available that protects them, and this group is not educated enough to fight for their rights. All what has happened, is done by the Government.

Potential Entrants

Brand reputation of existing companies is also one of the barriers because customers do not easily get ready to switch. Massive Ecological surveys must be done before companies can begin production. Government Policies and regulation are also act as barriers; because Natural Gas which is the main raw material of the industry, and the prices and supply of it is completely depend upon the Government. As before government was charging feed gas at lower rate and Fuel gas at higher rate. But now they are being charged at the same rate. Government does not easily give permission for manufacturing plant due to shortage of Natural gas and harmful environmental effects, this also act as a barrier. Huge capital requirement is one of the greatest barriers for entry. There are number of barriers to entry such, as capital requirements, government policies, reputation of existing firms and ecological surveys.

Substitutes

Switching costs is low. Suitability of Alternatives: imported fertilizer is as suitable as the industry products are. Bio-fertilizer is more suitable to use then the industry products, as it has no harmful environmental effects, cheap to produce and it also enhance the fertility of the soil. Where as our product reduces the natural fertility, but its production is almost over. Therefore industry does not have a threat of substitutes.

There are two substitutes available

1. Imported Fertilizer

2. Bio-Fertilizer

Rivalry

Competition is only on the basis of Quality. Prices are fixed for every season so no competition on the basis of pricing behavior. Industry is at maturity stage so; competition on the basis of growth is low. Fixed Costs are too high, which is not easily possible to tolerate. It reduces the competition.

MARKET

The target market of the industry can be divided in to two parts:

1. Farmers

2. Land owners

TREND ANALYSIS

Political Trend:

Gas for balancing, modernization, replacement expansion for existing plants has been filed for 7 years. Gas price has been fixed for 10 years for new investments. Export benefit to suppliers of capital goods for new/modernization projects of fertilizer. Tax relaxation has also been offered by the Government. Import by manufacturers of Rock Phosphate and Phosphorous of fertilizer free of customs duty. The Government is providing concessionary feed stock gas to the fertilizer plants for production of urea. Investors will be allowed to relocate second hand plant, equipment and machinery, with the same concession/exemption as applicable to new plants. To fulfil local demand of fertilizers at affordable prices, the Government is providing subsidy on production and import of fertilizers. Political trends are always in favour of this industry. The Government has provided following incentives under Fertilizer Policy, 2001, to encourage fertilizer production in the country:

Economical Trend:

Import by manufacturers of Rock Phosphate and Phosphorous of fertilizer free of customs duty.ØOne of the main sectors of economy is Agricultural as it contributes 22% to the GDP and without Fertilizer industry this sector would not able to work. Due to that Government always gives support to the fertilizer industry.

PHOENIX

Tax relaxation has been offered in order to attract new entrants.

Export benefit to suppliers of capital goods for new/modernization projects of fertilizer. To reduce the dependence on

Ban on export of fertilizer is also imposed so that economic stability would be gain.Ø The Government is providing subsidy on production and import of fertilizers. a massive subsidy of Rs. 27 billion in the supply of urea and DAP in 2009. imported fertilizers by enhancing the local production capacity.

Social Trends:

Although the adverse effects of this industry is very high because of the improper handling of the waste. Due to this, many diseases like asthma, kidney diseases, hepatitis etc…are caused. Still, the usage of the fertilizers cannot be stopped because it gives farmers so much ease in terms of saving time and actually, using it. Making bio -fertilizer has now become an old usage and farmers don’t prefer to use it against artificial fertilizer.

Technological Trend:

The fertilizer plant operators have now fully absorbed and assimilated the latest technological developments, incorporating environmental friendly process technologies, and are in a position to operate and maintain the plants at their optimum levels and on international standards in terms of capacity utilization, specific energy consumption. To meet the demand of fertilizers in the country through indigenous production, self-reliance in design engineering and execution of fertilizer projects is very crucial. This requires a strong indigenous technological base in planning, development of process know-how, detailed engineering and expertise in project management and execution of projects. The fertilizer industry is also carrying out de-bottlenecking and energy saving scheme in their existing plants and to enhance the capacity and reduce the specific energy consumption per ton of product. Companies are also planning to convert to Liquefied Natural Gas (LNG).pollution standards. The average performance of gas-based plants in the country today is amongst the best in the world.

SWOT ANALYSIS

Strengths:

All companies in the industry have developed a well planned network field warehouses to ensure that fertilizers are available to the farmers uninterrupted. Fertilizer industry peruses an innovative education oriented advertising policy utilizing electronic/ print media and road side advertisement. Industry has well distribution centers. Demand is heavy because, being an agriculture country and due to increasing awareness about the balanced use of fertilizer, demand for the fertilizer will increase. All the fertilizer plants are producing at more than 100 per cent installed capacity of utilization. Adding some new unit can enhance the production capacity of the plants.

Weakness:

Low advertising campaigns as growers and farmers are not educated and lives in Fertilizer sector is backward in technology and also lack in resources. villages, so they don’t exactly know the balanced use of fertilizer. Demand is more and capacity of plants to produce fertilizers is less. Due to the existence of black market and heavy demand, farmers have to pay above then the stated price.

Opportunities:

As India is an agricultural country and farmers are getting awareness about the balanced use of fertili As demand is high comparing to supply, fertilizer sector has an opportunity to expand the capacity to fulfill the local demand. Government is giving support to fertilizer sector… Availability of gas from Iran can increase the production of plants and industry c an fulfill the demands. There is no quota restriction by WTO since 2005, so there are more chances of export. If the quality is good customer will buy your product. By improving the quality of products, industry can attract more customers and can retain customers by satisfying their needs. zer, demand of fertilizer has increased.

Threats:

Government policies are not consistent regarding fertilizer industry. Bio fertilizer is the main threat to the industry because it is cheap and also environment friendly. Global prices of fertilizer products are also increasing which is causing increase in fertilizer prices in the country. Prices of fuel and gas have increased enormously. Unstable political condition in the country is also a big threat to fertilizer industry. Imported fertilizer is available at cheap prices than local fertilizer. As natural gas is the main raw material, load shedding of natural gas is big threat.

CONCLUSION

Planning and Administration and Vigilance. It makes an assessment of the individual requirements of the states and union territories and then lays out an elaborate supply plan.

Though the soil in India is rich in silt, it lacks chief plant nutrients like potassium, nitrogen and phosphate. The increase in the production of fertilizers and its consumption acts as a major contributor to overall agricultural development.

• Size of Indian Fertilizer Industry

• Growth of Indian Fertilizer Industry

• Private Companies in Indian Fertilizer Market

• Public Sector Companies in Indian Fertilizer Market

• Major Players in Indian Fertilizer Fertilizer industry

• Global Demand for Indian Fertilizer

• Government Policies and Indian Market

• Challenges before Indian Fertilizer Industry

• Concluding remarks on Indian Fertilizer Industry

Posted by ICM IM