Professional Documents
Culture Documents
FERTILIZER
INDUSTRY
Submitted By:
Sunil K. Deore
Roll No.-0143
INRTODUCTION:-
India is primarily an agriculture based economy. The agricultural sector and its other
associated spheres provide employment to a large section of the country's population and
contribute about 25% to the GDP.
Fertilizers are the chemical compounds which are used for increasing plant production
efficiency, production quality, & for maintaining soil fertility over the period.
The Indian Fertilizer Industry is one of the allied sectors of the agricultural sphere. India has
emerged as the third largest producer of nitrogenous fertilizers. The adoption of back to back
Five Year plans has paved the way for self sufficiency in the production of food grains. In fact
production has gone up to an extent that there is scope for the export of food grains. This
surplus has been facilitated by the use of chemical fertilizers.
The large scale use of chemical fertilizers has been instrumental in bringing about the green
revolution in India. The fertilizer industry in India began its journey way back in 1906.
During this period the first Single Super Phosphate (SSP) factory was established in Ranipet in
Chennai. It had a capacity of producing 6000 MT annually. In the pre and post independence
era a couple of large scale fertilizer units were established namely the Fertilizer Corporation of
India in Sindri, Bihar and the Fertilizer & Chemicals Travancore of India Ltd in Cochin, Kerala
The Indian government has devised policies conducive to the manufacture and consumption
of fertilizers. Numerous committees have been formed by the Indian government to formulate
and determine fertilizer policies. The dramatic development of the fertilizer industry and the
rise in its production capacity has largely been attributed to the favourable policies. This has
resulted in large scale investments in all three sectors viz. public, private and co-operative.
At present there are 57 large scale fertilizer units. These manufacture an extensive range of
phosphatic, nitrogenous and complex fertilizers. 29 of these 57 units are engaged in the
manufacturing of urea, while 13 of them produce Calcium Ammonium Nitrate and
Ammonium Sulphate. The remaining 20 fertilizer plants manufacture complex fertilizers and
DAP. There are also a number of medium and small scale industries in operation, about 72 of
them.
INDIAN FERTILIZER COMPANIES
PUBLIC SECTOR
National Fertilizers Limited
Fertilisers and Chemicals Travancore Ltd.
Rashtriya Chemicals & Fertilizers Limited
Madras Fertilizers Limited
Paradeep Phosphates Limited
Pyrites, Phosphates & Chemicals Limited
Fertilizer Corporation of India Limited
Projects & Development India Limited
COOPERATIVE SECTOR
Indian Farmers Fertiliser Cooperative Ltd
Krishak Bharati Cooperative Limited
PRIVATE SECTOR
Gujarat State Fertilizer Company Limited
Coromondel Fertilisers Limited
Shriram Fertilisers & Chemicals Limited
Zuari Industries Limited
Southern Petrochemicals Inds. Corpn. Ltd.
Mangalore Chemicals & Fertilizers Limited
Gujarat Narmada Valley Fertilisers Co. Ltd.
Duncans Industries Limited
Deepak Fertilizers & Petrochemicals Ltd.
Indo-Gulf Fertlizers & Chemicals Corpn. Ltd.
Godavari Fertilizers & Chemicals Limited
Nagarjuna Fertilizers & Chemicals Limited
Chambal Fertilizers & Chemicals Limited
Tata Chemicals Limited
Oswal Chemicals & Fertilizers Limited
PORTERS FIVE FORCES FOR INDIAN FERTILIZER
INDUSTRY
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1) THREAT OF NEW ENTRANTS (MODERATE) :-
Fertilizer production is capital intensive and presently the cost of
Production of indigenous material is high and returns on investment are
low.
Lack of availability of natural gas
Potential entrants in this sector are various companies like Monsanto and Syngenta
who feel that rural markets are still not penetrated to a considerable extent.
India does not have potential rock phosphate reserve, it is completely dependent on
import of either rock phosphate or phosphoric acid or Di Ammonium Phosphate.
Second set of potential entrants are retailers like GODREJ ADHAR and HARYALI.
Limited availability of domestic natural gas for production of urea.
Government policies for new entrants in fertilizers industry.
Present public & co-operative fertilizer industries captured almost full rural market
giving fertilizer subsidies from government so it is difficult for new entrants to
maintain low price with high production cost.
Agriculture in India is in rural sector so it is very hard to maintain supply chain in
rural India throughout the year.
Processing of the raw material requires very large of machinery & high processing
cost, so it is not easy for new entrant to cope up with these high investment.
4) THREAT OF SUBSTITUTES(HIGH):-
Bio fertilizers
Organic fertilizers
Manures (cattle dung, FYM)
Green Manures
Vermicompost
Biotech fertilizers
Fertilizers given through leaves provided by pesticides , herbicides companies.
5) RIVALRY AMONG EXISTING COMPETITORS (HIGH):-
Major market captured by public & co-operative companies.
Private companies trying to capture rural market.
Cost competitiveness between private and public players.
Public players are provided with different subsidies so their price is always lowers
than private players so there is always competition for market.
Rural market is still mostly untapped in India so major private players concentrating
on improving supply chain by developing retail network with local retail shops
owned by local people.
Different suppliers of raw material used by different companies leads to cost
competitiveness & quality of products.
Companies come up with different products such as completely water soluble
fertilizers , spray fertilizers, fertilizers with micro nutrients so by use these fertilizers
less wastage & more efficiency of fertilizers increases .
Improved techniques & high yielding varieties which require less fertilizers used by
farmers so high competition for sale between different companies.
ATTRACTIVENESS OF INDUSTRY
RECOMMENDED STRATEGIES
Improvement of sales force in rural areas by using local youth power by training
them.
Marketing of fertilizers throughout the year by giving demonstrations, free samples
to farmers.
Marketing research of different localities for customers demand & their needs.
Research based production approach by the company for innovations of different
processes.
Marketing of products by using local leaders as in rural area effect of sarpanch,
talathi, political leaders is always more on general farmers so it can be beneficial for
company to capture market.
Start producing organic as well as bio fertilizers with the same brand as many of
farmers now knows the values of organic farming.
Developing Retail chain network.
Improving extension services to educate people of rural areas with latest innovations.