29 October 2014

Fertilizer sector profitability would decline from 1st November 2014

Reliance is going to increase its gas prices from 1st November 2014. It could adversely affect the economics of the key user industries including power and fertiliser. As per the latest report of India Ratings & Research (Ind-Ra) the profitability of fertilizer sector would decline under the impact of increase in gas price. There would be a three-fold impact on fertilizer manufacturers by this increase in domestic gas prices.

1. The per unit subsidy on urea will increase, leading to higher working capital requirements as subsidy dues are usually paid with a lag. The interest costs on higher working capital requirement will have to be borne by fertilizer manufacturers.

2. The profitability of urea manufacturers selling above 110% of the re-assessed capacity will be lower as the sale price is linked to import parity price but the costs are not pass through.

3. Non-urea manufacturers will also have to either bear the higher gas prices or pass them on to the consumers.

Stay tuned to Fertilizer News for getting more details on Domestic Gas Prices !   

28 September 2014

DOF plans to prevent subsidy leakages in fertilizer subsidy

The Department of Fertilizers (DoF) plans to prevent subsidy leakages by implementing barcode-based tracking of all fertilizer bags. For this purpose the DoF has invited Expression of Interest (EoI) from eligible entities for implementation of barcode-based Fertilizer Track & Trace Solution (FTTS). The Indian fertilizer companies produce 100 crore fertilizer bags of 50 kg every year. These bags are distributed through 1.5 lakh retail outlets across the country.        

Now as per the EoI document, each fertilizer bag will have a barcode tagged at the manufacturing site/port. The subsidy to be paid by Government will be linked with the scanning of fertilizer bags at wholesalers/retailer end. The fertilizer bags then will be scanned at certain number of pre-defined locations during the movement from plant/port to the retailer’s outlet.    

Implementation of barcode-based Fertilizer Track & Trace Solution (FTTS) will help DoF to estimate the availability of fertilizers at each sale point and enable DoF for better planning and movement of the fertilizers to the states/districts.

Stay tuned to Fertilizer News for getting more details on barcode-based Fertilizer Track & Trace Solution (FTTS) !

27 September 2014

BEC Fertilizers expects to commission its SSP plant in Jhagadia, Bharuch by December 2014

Jhagadia, Bharuch based BEC Fertilizers (Unit of Bhilai Engineering Corporation Limited) proposed plant will have an installed capacity of 3.30 lakh TPA of SSP (in powder form). Furthermore, it also proposes to convert part of the powder SSP to  Granulated SSP with an installed capacity of 1.65 lakh TPA. The construction is in full swing and the company expects to commission its Rs 107 crore single super phosphate (SSP) plant in December 2014.

BFL was originally incorporated in September 2006 under the name BEC Ispat Private Limited, (later converted into BFL in 2011). The company is part of the BEC group which has presence across diversified business like engineering, fertilizers, agro chemicals and food products.  The Fertilizer Division of the company manufactures and markets multiple agro inputs under the popular brand of "ANAND".   

Stay tuned to Fertilizer News for getting more details on BEC Fertilizers (BFL) !