GOVERNMENT TO FACILITATE JOINT VENTURES IN FERTILIZERS SECTOR

CONSULTATIVE COMMITTEE OF CHEMICALS & FERTILIZERS MINISTRY MEETS

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A long-term policy for setting up overseas joint ventures as well as joint ventures in the country in the fertilizer sector in view of the feedstock constraints and the need to maintain sustainable levels of self-sufficiency in fertilizer production is on the anvil. An inter-ministerial Task Force constituted to assess the various options, alternatives and implications of proposals for such joint ventures would soon be finalizing recommendations to initiate the required policy initiatives to facilitate setting up joint venture projects in the fertilizer sector. This was disclosed by Shri S.S. Dhindsa, Minister for Chemicals and Fertilizers while addressing the Parliamentary Consultative Committee attached to his ministry here today.

Shri Dhindsa said the issue of setting up overseas joint venture projects has assumed critical importance since the availability of natural gas in the country is limited and supplies of this feedstock to fertiliser units has of late been on the decline, forcing fertilizer units to opt for the costlier naphta to supplement their feed and fuel requirements. He informed the members that it was in this backdrop that an alternative is emerging before the fertilizer industry to explore options to set up joint ventures in countries where the preferred feed-stock is available abundantly and at reasonable costs, and to transport fertilizers produced by these ventures to India.

The Minister informed the members that after concerted efforts, an overseas urea joint venture project promoted by IFFCO, KRIBHCO and Oman Oil Company in Oman, for production of 16.52 lakh tonnes of urea and 2.48 lakh tonnes of merchant ammonia annually, has commenced implementation on 15^th August, 2002 and will begin commercial production of urea by July, 2005. This joint venture will supply the entire quantity of urea to India at fixed long term prices for 15 years period and IFFCO will procure ammonia on similar terms. He said this would be a test case for future ventures by Indian fertilizer industry outside the country. He also referred to some overseas joint venture projects set up by the Indian industry with assured supply of phosphoric acid for manufacture of DAP and other phosphate and complex fertilizers within the country.

Shri Dhindsa said that 13 major fertilizer projects were commissioned in the country during the 9^th plan period (1997-2002), accounting for a total additional annual production capacity of 66.40 lakh tonnes of major fertilizers varieties, making it possible to attain self sufficiency in urea and DAP production. He said the estimates made by the working group constituted by the Planning Commission for the 10^th Five Year Plan (2002-07) forsee adequate demand supply gap towards the end of the 10^th plan for major fertilizer varieties which would necessitate capacity additions through domestic and overseas joint ventures.

Those who attended today’s meetings were: Prof. Alka Balram Kshatriya, Shri Mehendra Prasad, Shri Anil Kumar (from Rajya Sabha) and Shri M. Durai, Shri A.C. Jose, Shri Baju Ban Riyan, Shri Ramesh Jigajinagi (from Lok Sabha).