Govt to invest Rs50,000 crore to revive fertilizer plants

Mumbai: The government of India will be investing Rs.50,000 crore to revive four fertilizer plants and set up two new plants to produce farm nutrients, minister of chemicals and fertilizers Ananth Kumar said on Thursday while inaugurating the IndiaChem event in Mumbai.

The four plants which will be revived under the plan are located in Talcher in Odisha, Ramagundam in Telangana, Gorakhpur in Uttar Pradesh and Barauni in Bihar.

In the recent union budget, finance minister Arun Jaitley had announced Rs.10,000 crore for setting up a national gas grid. These fertilizer plants will be supplied gas through the grid.

The Talcher plant revival would cost the government around Rs.9,000 crore while the Ramagundam plant revival would need an investment of Rs.6,000 crore Kumar said.

The government will also set up two 1.2 million tonnes per annum (MTPA) greenfield fertilizer plants in the states of Madhya Pradesh and Karnataka, said Kumar. "The greenfield plants will need an investment of Rs.5,000 to Rs.6,000 crore each," he added.

In addition, the government is also in talks with the government of Iran to set up 1.2 MTPA Urea plant in Iran on the lines of India's joint venture (JV) with Oman, he said.

"The proposed JV with Iran would require an investment to the tune of $2 billion," said Kumar.

The minister also announced that India's first reverse special economic zone (SEZ) will be set up in Iran.

The reverse SEZ will be for the manufacture and supply of chemicals feedstock to India.

India is also contemplating setting up such reverse SEZs in Myanmar and Mozambique.

Talking on the petroleum, chemicals and petrochemicals investment region (PCPIR) project, he said that four steering committees have been set up to speed up the four approved PCPIRs.

"We are also in talks with the governments of Rajasthan, Madhya Pradesh and Karnataka for setting up of chemical investment zones," said Kumar.

On the issue of subsidy for the three naptha plants of Madras Fertilizers Ltd, Southern Petrochemical Industries Corporation Ltd (SPIC) and Mangalore Chemicals and Fertilizers Ltd, Kumar said the companies are ready to work on naptha till they are provided with natural gas supply through the planned southern grid and the companies have asked for subsidy at the rate of regasified liquefied natural gas (RLNG). The ministry will soon take a decision on this, he said.

The minister also said that his ministry is in the midst of formulating national fertilizer and chemical policies, which should be ready in the next three to four months.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.