RCF to expand fertilizer manufacturing capacity

Public sector giant Rashtriya Chemicals and Fertilizers (RCF) has two operating units - one at Trombay in Mumbai and the other at Thal, Raigad district, Maharashtra. It manufactures urea, complex fertilizers, bio-fertilizers, micro-nutrients, 100 per cent water soluble fertilizers and a wide range of industrial chemicals.

With a strong marketing network covering 20 major states, the Ujjwala and Suphala brands of the company are well-known. Having been given the 'Miniratna' status by government of India, RCF is now working to get the Navaratna tag.

During 2012-13, the company had a turnover of Rs 6,987 crore with a profit of Rs 281 crore.

Says R.G. Rajan, Chairman and Managing Director, RCF: "As part of RCF's constant drive towards sustained growth, our most recent thrust areas have been the revamping of existing plants to bring down energy consumption, improve production of fertilizers and achieve reliability in operations and safety. All the plants at the Trombay unit have been revamped and, as a result, their energy efficiency is quite good -this despite the fact that the plants are low capacity and of old vintage."

RCF has revamped the Thal plant which will augment the production of urea from 1.7 million metric tonnes (MT) to two million MT per year, and also lead to energy savings.

"As our production resources are already maximised, the company is also resorting to trading of imported fertilizers such as DAP, MOP, NPK, etc, in a big way to increase both top-line and bottomline," says Rajan.

The increased demandsupply gap in fertilizers provides an opportunity to expand the fertilizer manufacturing capacity. RCF is planning capital investment of around Rs 6,300 crore over the next five years to set up new plants and expand existing units - there is the Thal III expansion project to produce 1.27 million tonnes per annum (TPA) urea; another project will produce 1.27 million TPA urea at Talcher in a consortium with Coal India, GAIL and Fertiliser Corporation of India; then there's a joint venture project to produce about one million TPA urea in Ghana.

"Our aim is to have a turnover of Rs 15000 crore by the end of the 12th Five-Year Plan", says the Chairman.

The dwindling supply of domestic gas is a major concern for the fertilizer industry. Also, gas price may increase based on the Rangarajan Committee's recommendations. This is going to pose serious challenges to the fertilizer and chemical plants.

In this scenario, RCF is considering feedstock diversification from natural gas to coal gasification.

Meanwhile, RCF is exploring possibilities of entering into long-term offtake agreements for potash with suppliers in Canada and Europe. It is also experimenting with rock phosphate assets and phosphate-related joint venture projects in resource-rich countries of Africa and West Asia. All these initiatives will lead to substantial increase in turnover and strengthen the bottom-line of the company.