The Indian Fertilizer Industry dated back to 1906 and starting then it began to emerge as the world’s most efficient fertilizer industry in terms of capacity utilisation, energy consumption, and adherence to environmental standards. The industry underwent a massive growth on the 1970s to 90s becoming the third largest manufacturer and consumer of fertilizers, following USA and China. India contributed to 11.4% and 11.9% to total world production and consumption of NPK (nitrogen, phosphorus, potassium), respectively.
The Indian Fertilizer Industry was regarded as one of the core sectors in India. It was second only to the steel industry in terms of investment. There are different types of fertilizers being manufactured in India, urea accounted for 82% of the total consumption of nitrogenous fertilizers, and Di-ammonium Phosphate (DAP) accounted for 63% of total Phosphorus fertilizer consumption.
A study shows that fertilizers contributed 50% to food production, the remaining being contributed by other factors such as improved seeds, irrigation, insecticides and pesticides. It also shows that there are 16 elements that are vital to the growth of green plants, with each element playing a vital role.
Chemical fertilizers in India played a vital role in increasing its agricultural productivity over a period of time. The increased use of fertilizers together with the introduction of high-yielding seeds and massive extension programs made India a self-sufficient nation in food grain production.
However, despite the big increase in fertilizer consumption, the average growth in agriculture could not match the growing needs of the growing population. Thus, there was a need for India to import. Between the year 2000 up to 2004, India exported wheat at the price of US$80-US$90 per tonne. After 2004, it began importing wheat at the price of US$250-US$300 per tonne. Furthermore, quality of wheat imported is lower as compared to wheat produced domestically.
The several factors attributing to this reversed situation included insufficient supply of inputs. Some of these inputs included seeds, irrigation and fertilizers, inadequate infrastructural support for preservation, processing and storage, marketing and soil testing. Second generation problems were also starting to show up like soil degradation, imbalanced and inefficient use of fertilizers, deficiency of secondary and micronutrients, and declining crop response ratio to fertilizer use. These problems impeded agricultural growth.
National Fertilizers Limited (NFL)
NFL is India’s second largest producer of nitrogenous fertilizers with a 16.5 % share in urea production in 2006-2007. The usage of chemical fertilizers has helped boost India’s crop production output manifolds but the consequences of excessive and incorrect applications have begun to unfold. On the contrary the demand on urea was expected to increase because of the untapped potential use of the fertilizers. There is a prevalent market for wastelands, rain-fed agriculture and horticulture. There is also an existing alliance between NFL and the Indian government through a Memorandum of Understanding which can be renewed annually.
NFL’s main business is the manufacture and sale of urea and bio-fertilizers. It also produced and marketed other industrial chemicals. ‘Kisan Urea’ is the flagship brand of the company. It is a highly concentrated nitrogenous fertilizer easily soluble in water and suitable for almost all kinds of crops. In 2004, the company was also able to develop a more effective, neem-coated fertilizer capable of increasing yield by 12-14% under R&D. It also has three strains of bio-fertilizers which supplements chemical fertilizer and significantly increase production yield.
Furthermore, NFL also provided services that pertained to the operation of petrochemicals refineries and fertilizer plants within and outside...