Fertilizer Industry In India - Will Government Policy & Subsidies Aid Players?

Published by: CRISIL Ltd.

Published: Oct. 1, 2007 - 156 Pages

Table of Contents

Sections

Deficit scenario to continue, as policy delays affect new investments

Executive summary

1.0 Demand

Consumption of fertilisers

Consumption demand drivers

Fertiliser demand: Alternative forecasts

Supply projections

2.0 Subsidies and pricing: Perspective and recent developments

Perspective on fertiliser pricing and subsidy

Alternatives for controlling fertiliser subsidies

Improving feedstock competitiveness for urea

Expected policy changes for new investments, expansion

Direct subsidy to farmers

Long term outlook on subsidy

Box

2.0 Subsidies and pricing: Perspective and recent developments

01 Changes in the concession scheme related to phosphatic and

potassic fertilisers

Charts

1.0 Demand

01 Schematic diagram of demand forecasting approach

2.0 Subsidies and pricing: Perspective and recent developments

01 Proposed pipeline network

02 Mode of disbursement through smart cards

Figures

1.0 Demand

01 Fertiliser consumption (in nutrient terms)

02 Comparison of fertiliser intensity & foodgrain yield

03 Urea - Capacity utilisation trends

04 Trends in DAP & complex fertiliser capacity utilisation

Figures

2.0 Subsidies and pricing: Perspective and recent developments

01 Urea price vs Inflation index

02 Subsidy/GDP trend

03 Increasing subsidy and arrears

04 Rising receivable days as subsidy arrears increases

05 Delivered cost of different feedstocks-per tonne of urea

06 Natural gas demand-supply balance

07 Trend in COP & IPP

Tables

1.0 Demand

01 Nutrient-wise demand

02 Product-wise demand

03 Nutrient consumption forecast by different agencies

04 Proposed capacity additions

05 Scenario where only de-bottlenecking is considered

06 Scenario where all expansions & JVs are approved

07 Supply projections for DAP and complex fertilisers

08 Supply projections for SSP

2.0 Subsidies and pricing: Perspective and recent developments

01 Savings in subsidy

02 Increase in other costs as spelt out by the policy

03 Impact of the DAP policy

Sections

1.0 Introduction to fertilisers

2.0 Feedstocks

Introduction

Other feedstocks

3.0 Manufacturing process

Introduction

Nitrogenous fertilisers

4.0 Industry structure

Industry characteristics

Ownership structure

Concentration in the fertiliser industry

5.0 Evolution

Nitrogenous fertilisers

DAP

SSP

Potassic fertilisers

Complex fertilisers

Buffer stock approach fails to decontrol prices

Assessment of policy and their remedial measures by the government

6.0 Government policy

Extent of regulation in the industry

Policy changes during 2002-2007

7.0 Industry performance

Key success factors

8.0 Global scenario

Fertiliser demand

Consumption pattern across countries

World supply and trade

Nitrogen

Ammonia

Natural gas

Phosphorus

Potash

9.0 Organic and bio-fertilisers

Introduction

Charts

3.0 Manufacturing process

01 Manufacture of urea

02 Manufacture of DAP

03 Manufacture of SSP

6.0 Government policy

01 DAP - Groups under the new policy

9.0 Organic and bio-fertilisers

01 Steps in bio-fertiliser production

Figures

2.0 Feedstocks

01 Natural gas - Domestic prices

02 Naphtha - Domestic price and landed cost

03 Naphtha - International prices

04 Feedstocks for phosphatic fertilisers

05 Phosphoric acid - Landed costs

06 Rock phosphate - Landed cost

07 Sulphur - Landed cost

4.0 Industry structure

01 Feedstock-wise share for captive ammonia for nitrogenous capacity

02 Urea demand dependent on rainfall

03 Share of capacity of nitrogenous fertilisers as on Nov 1, 2006

04 Share of capacity of phosphatic fertilisers as on Nov 1, 2006

5.0 Evolution

01 Fertilisers (nutrient) - Production and consumption

02 Urea - Subsidy

6.0 Government policy

01 Fertiliser price trends

7.0 Industry performance

01 Sales volume vs sales revenue

02 Fertiiser industry vs segment PBIT/sales

03 Profitability per tonne of fertiliser

04 RoCE of fertiliser segment Vs Fertiiser industry

05 Debt-servicing indicators

06 Working capital indicators

Figures

8.0 Global scenario

01 World fertiliser consumption

02 Global consumption pattern

03 World consumption- Nutrient wise- 2005

04 Indian consumption- Nutrient wise- 2005

05 World consumption (nutrient-wise) over the years

06 Top five producers of N fertilisers - 2002

07 Top three consumers of N fertilisers - 2003

08 Top five producers of phosphorus fertilisers - 2002

09 Top three consumers of phosphorus fertilisers - 2003

10 Top five producers of potassium fertilisers - 2002

11 Top four consumers of potassium fertilisers - 2003

12 International price - Urea & ammonia

13 International price - DAP & phosphoric acid

Tables

1.0 Introduction to fertilisers

01 Major fertilisers - Nutrient content

02 Fertilisers - Capacity and production trends

2.0 Feedstocks

01 Fertiliser intermediates - Input norms

02 Natural gas - Industry-wise offtake

03 Natural gas - Prices

04 GAIL's pipeline across states

05 Natural Gas proposed pipelines

06 Impact of gas composition on CO2 availability

07 Units that are closest to gas pipeline

08 Units that are far from the nearest gas pipeline / where gas pipeline

infrastructure does not exist

09 Units where gas pipeline infrastructure is being constructed

10 LNG contracts by fertiliser companies

11 Naphtha - Sectoral consumption

12 Naphtha - Demand-supply

3.0 Manufacturing process

01 Technology used for urea

02 Manufacturing process - Synthesis of gas mixture

03 Fertiliser output - Specific consumption norms

Tables

4.0 Industry structure

01 Feedstock-wise share for captive phosphatic capacity

02 Fertilisers - Concentration ratio

03 Urea - Project costs of some plants

5.0 Evolution

01 Changes in farm gate price of urea

6.0 Government policy

01 Different aspects of fertiliser policy

02 Retention price across the three stages of the pricing policy

03 Impact of the DAP policy

04 Complex fertilisers - Group I and Group II companies

05 Complex fertilisers - Material costs-2002-03

7.0 Industry performance

01 PBIT/tonne of production and reasons for change

02 Increasing subsidy arrears

03 Fertilisers - Financial summary

04 Urea - Financial comparison

05 Major urea manufacturers

06 Complex - Financial comparison

07 Major complex fertiliser manufacturers

08 Financial comparisons of various companies

8.0 Global scenario

01 World nitrogen supply and demand balance 2006-2010

02 World phosphoric acid supply and demand balance- 2006-2010

03 World potash supply and demand balance- 2006-2010

9.0 Organic and bio-fertilisers

01 Differences between chemical and organic fertilisers

Sections

1.0 Supply trends

2.0 Demand trends

3.0 Feedstock

4.0 Price and cost

5.0 Global scenario

Tables

1.0 Supply trends

01 Fertilisers - Demand-supply

02 Fertilisers - Capacity and production trends

03 Nitrogenous fertilisers - Feedstock-wise share of capacity

04 Nitrogenous fertilisers - Capacity and production (nutrient)

05 Phosphatic fertilisers nutrient (non-SSP) - Capacity and production

06 Urea - Capacity and production

07 DAP - Capacity and production

08 Complex fertilisers - Production

09 Fertilisers - Production trend

10 Fertiliser - Imports

11 Phosphatic fertilisers - Variety-wise shares of consumption

12 Urea - New capacities under consideration

13 Fertilisers - Overseas projects

14 Major fertilisers - content

2.0 Demand trends

01 Fertilisers - Trends in nutrient consumption

02 Fertilisers - Consumption trend

03 Fertilisers - Relative consumption shares

04 Urea - State-wise consumption

05 Diammonium phosphate - State-wise consumption

06 Others - State-wise consumption 2005-06

07 Fertilisers - Zone-wise consumption ratios

08 Plant nutrients - Consumption per unit of gross cropped area

09 Trends in NPK usage ratios

Tables

3.0 Feedstock

01 Fertilisers - Raw materials input norms

02 Fertiliser intermediates - Input norms

03 Nitrogenous fertilisers - Feedstock-wise share of capacity

04 Phosphatic fertilisers - Feedstock-wise capacity shares

05 Ammonia - Supply trends

06 Ammonia - Producer-wise cost per tonne

07 Phosphoric acid - Producers and capacities

08 Phosphoric acid - Supply trends

09 Phosphoric acid - Producer-wise cost per tonne

10 Rock phosphate: Supply trends

11 Rock phosphate - Producer-wise cost per tonne

12 Sulphur - Supply trends

13 Sulphur - Producer-wise cost per tonne

14 Naphtha - Sectoral consumption

15 Naphtha - Producer-wise cost per tonne

16 Naphtha - Production and consumption trends

17 Natural gas - Reserves, production and utilisation

18 Natural gas - Distribution of reserves

19 Natural gas - Producer-wise cost per tonne

20 Natural gas - Domestic prices

21 Natural gas - Country-wise prices

22 Fertiliser inputs - International price trends

23 Fertiliser inputs - International price trends

4.0 Price and cost

01 Central subsidy on food and fertilisers

02 Fertilisers - Subsidies

03 Fertilisers - Producer prices

04 Fertilisers - Price trends

05 Fertilisers - International prices

06 Urea - Price realisations

07 Urea - International prices

08 DAP - Price realisations

09 DAP - International prices

10 SSP - Price realisations

11 MOP - International prices

12 Other fertilisers - Price realisations

13 Fertilisers - Ocean freight to India

5.0 Global scenario

01 Fertilisers - Global consumption

02 Fertilisers - Top consumers and India's share

03 Fertilisers - World production and consumption

04 Nutrients - World production and consumption growth rates

Abstract

• What is the projected demand-supply balance for fertilisers in India?
• What are the implications of the policy on the industry?
• How has been the players performing?
• What is the expected feedstock availability in the future?
• How will be the pricing of feedstock and its implications?

• Investment Managers
• Venture Capitalists
• Management Consultants
• Research Companies
• Private Equity Managers
• Market intermediates
• Banks
• Fertilizer Industry participants
• Analyst
• Other Industry Professionals

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