1

A

PROJECT REPORT

ON

EXPLORING MARKET POTENTIAL OF AMMONIA ABSORPTION REFRIGERATION PLANT

IN FERTILIZER INDUSTRY

For

TRANSPARENT ENERGY SYSTEMS PVT. LTD.

SSUUBBMMIITTTTEEDD TTOO UUNNIIVVEERRSSIITTYY OOFF PPUUNNEE IINN PPAARRTTIIAALL FFUULLFFIILLLLMMEENNTT OOFF 22 YYEEAARRSS FFUULLLL TTIIMMEE CCOOUURRSSEE

MMAASSTTEERR IINN BBUUSSIINNEESSSS AADDMMIINNIISSTTRRAATTIIOONN ((MM..BB..AA))

SUBMITTED BY,

ATUL ARVIND BICHKAR (BATCH 2005-2007)

VISHWAKARMA INSTITUTE OF MANAGEMENT, PUNE- 48

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ACKNOWLEDGEMENT

I express great pleasure in introducing my project report titled Exploring Market

Potential of Ammonia Absorption Refrigeration Plant in Fertilizer Industry .

I take this opportunity to express my most sincere and heartfelt gratitude to Mr. B. G.

Kulkarni (Director-Mktg.&Sales) and Mr. Pankaj Bhangale (Manager-Mktg.),

Transparent Energy Systems Pvt. Ltd., Pune, for providing me with a wonderful

opportunity to execute this project in their esteemed organization and for patiently

mentoring and guiding me throughout the project.

This project would not have been successful without the precious guidance of our

director Dr. Sharad Joshi & my project guide Dr. Vandana Gote, to whom I express my

sincere gratitude and all those who have helped me directly and indirectly.

Moreover, I would also like to thank all the employees of Transparent Energy Systems

Pvt. Ltd. for their constant support and help.

Once again I express my gratitude to TRANSPARENT ENERGY SYSTEMS PVT. LTD., for providing

me this enviable opportunity to carry out the project.

ATUL ARVIND BICHKAR

3

Certificate

This is to certify that Mr. Atul Arvind Bichkar, has successfully

completed his summer project titled Exploring Market Potential of

Ammonia Absorption Refrigeration Plant in Fertilizer Industry.

for TRANSPARENT ENERGY SYSTEMS PVT. LTD.

, in partial

fulfillment of Masters in Business Administration(MBA) degree course

of University of Pune for the academic year 2006-2007.

Dr. Sharad Joshi Dr. Vandana Gote Director, VIM,Pune. Project Guide.

4

CONTENTS

Sr. No. Description PAGE NO.

1. EXECUTIVE SUMMARY 2-3

2. OBJECTIVE AND SCOPE OF PROJECT 4

3. COMPANY PROFILE 5-7

4. THEORETICAL BACKGROUND 8-33

5. RESEARCH METHODOLOGY 34-36

6. RESEARCH ANALYSIS & FINDINGS 37-41

7. LIMITATIONS 42

8. CONCLUSION 43

9. RECOMMENDATIONS 44

10. BIBLIOGRAPHY 45-47

11. ANNEXURE

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EXECUTIVE SUMMARY

The objective of the project is to determine the market potential and enquiry generation

for an industrial product i.e. Ammonia Absorption Refrigeration Plant (AARP) in

Fertilizer Industry. The project was carried out for TRANSPARENT ENERGY

SYSTEMS PVT. LTD., Pune. Transparent Energy Systems Pvt. Ltd. is one of the

umbrella divisions of Transparent Group Of Companies.

Transparent Energy Systems Pvt. Ltd. has developed a novel Refrigeration System using

heat from exhaust gases and other sources of waste heat.

The company has been thinking of providing Ammonia Absorption Refrigeration System

in the fertilizer industry. Hence the project was carried out to determine the market

potential for Ammonia Absorption Refrigeration Plant. The field selected for the survey

was NORTH & SOUTH INDIA as there is high intensity of the targeted market segment

due to availability of resources used in the manufacturing of fertilizers.

Transparent Energy Systems Pvt. Ltd.. has a turnover of 75 crores as per the last

financial year. The industries selected for sample size were segmented according to size

of the plant, quantity of fertilizers being manufactured daily/yearly, market share,

availability of waste heat from the manufacturing process etc.

The data collected during the project was secondary as well as primary data. The

secondary data was collected to create the database of the survey. The sources used for

secondary data are various magazines, governmental & non-governmental publications

and internet. Beside this some places like chamber of commerce & industries, cement

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suppliers etc were sought to obtain information regarding the cement manufacturing

plants. Some website regarding information on types of fertilizers and their

manufacturing processes were also visited to get the information of availability of

resources in particular region.

Primary data was collected through the questionnaire filled by industry visited.

The analysis was carried out on the basis of the information obtained from questionnaire.

The market potential was estimated by some assumptions for the Ammonia Absorption

Refrigeration Plant.

From the analysis it is concluded that the Ammonia Absorption Refrigeration Plant has a

very good potential in North & South India region.

After undergoing the project it is understood that even the analysis shows good potential

for Ammonia Absorption Refrigeration Plant, to make it practical, the company has to

arrange some awareness programs such as demonstrations, exposing the product in

exhibitions, etc.

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OBJECTIVE AND SCOPE OF THE PROJECT

TITLE OF THE PROJECT

Exploring Market Potential of Ammonia Absorption Refrigeration Plant in Fertilizer

Industry.

THE OBJECTIVES OF THE PROJECT ARE

To find out geographically the location and required details of fertilizer industries.

To find out market potential for Ammonia Absorption Refrigeration Plant in the

Fertilizer Industry.

To compare the existing refrigeration systems used by the companies.

To educate the fertilizer companies about the Ammonia Absorption Refrigeration

Technology and its benefits.

To find out the obstacles for implementing Ammonia Absorption Refrigeration

Technology.

SCOPE OF THE PROJECT

The project was carried out specifically in Fertilizer Industry.

The product selected for the project was Ammonia Absorption Refrigeration

Plant.

The region of North & South of India was selected for operations.

The states of Rajasthan, UP, Kerala, Tamil Nadu, & Andhra Pradesh were

covered to complete the market survey.

The sample size of 15 is selected for the survey.

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COMPANY PROFILE

Transparent Group of Companies are known as the technology leaders working in the

field of Co-generation systems, Ammonia Absorption Refrigeration Plants (AARP),

Water Recycling Plants, Super-efficient boilers and heaters, Waste Heat Recovery

Systems, Pollution Control Equipments, Drying Plants, Energy and Water Consultancy,

LiBr Chillers, Noise Abatement Products and Systems etc. It was incorporated in 1986

and the actual manufacturing started in 1988. The slogan of the company is Loyal to

resource conservation . Transparent Energy Systems has more than 20 years of

experience in field of energy conservation projects.

Transparent Energy Systems Pvt. Ltd. has acquired proficiency in the entire spectrum

of products and technologies covering all possible facets of Energy Efficiency,

Environment Conservation and Cogeneration Business. It has designed and implemented

over 150 installations of waste heat recovery and power generation alone for different

industries in India as well as numerous countries abroad.

The latest development of the company is a novel Ammonia Absorption Refrigeration

Plant in Fertilizer Industry. The company has received a patent from the Government of

India for the boilers used in energy savings which is in addition to the numerous other

patents for its various systems and products.

The business divisions of Transparent Energy Systems Pvt. Ltd. includes the following

1. Heat Recovery Systems: -

Waste Heat Recovery Boilers and Systems.

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2. Ammonia Absorption Refrigeration: -

Refrigeration up to -55

(know- how from Mattes Engg. Germany)

3. Cogeneration Systems: -

Power, Heating and Chilling.

4. Boilers and Heaters: -

95% super efficient oil/gas fuelled boilers, 89% super efficient Agro

fuelled/coal fired boilers, 93% super efficient Thermic Fluid Heater/Hot

air generators.

5. LiBr Chillers: -

Wide range of heat inputs viz.

Low and Medium pressure steam/super

heated hot water. Special proven design to utilize heat from low

temperature hot water of 55 C or higher.

6. Evaporators & Water Recycling: -

Multistage evaporators/desalination.

7. Energy and Water Consultancy: -

Energy/Water conservation.

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AMMONIA ABSORPTION REFRIGERATION PLANT

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THEORETICAL BACKGROUND

Anhydrous Ammonia has been used for many years to perform all types of refrigeration

and air conditioning chores. Anhydrous means ammonia without water, Aqua Ammonia

is a solution of ammonia and water which is used in refrigeration and air conditioners that

are not a vapor compression type. Vapor compression systems use compressors to

compress the ammonia vapor. Absorption type systems do not use a compressor but

instead use a generator. This system shall be the crux of the project. It is assumed by the

Author that you have some knowledge of refrigeration and are aware of the cycles and

pressures of refrigeration in general.

The typical Ammonia Absorption Refrigeration plant with single stage absorption and

single stage desorption is shown in the block diagram given overleaf.

Transparent Energy Systems Pvt. Ltd. has acquired proficiency in the entire spectrum

of products and technologies covering all possible facets of Energy Efficiency,

Environment Conservation and Cogeneration Business.

Transparent has developed a novel Ammonia Absorption Refrigeration Technology for

the fertilizer manufacturing industries.

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Typical Ammonia Absorption Refrigeration Plant with single stage Absorption & single stage Desorption.

W EAK SOLUTI ON

AM M ON I A VAPOU R

COOLI NG W ATER

BRI N E

STEAM

CON DEN SATE

RI CH SOLUTI ON

LI QU I D AMM ONI A

Ammonia Desorber

Steam/ heat RectificationColumn

AmmoniaCondenser

LiquidAmmoniaReceiver

Sub-cooler

Ammonia Evaporator/ Brine chiller

AmmoniaAbsorber

Solution heat exchanger

SolutionPump Liquid

Ammonia bleed

Liquid AmmoniaReflux

HE5

HE4 Poor / WeakSolution

Strong Solution

HE3

HE7

CoolingWater

HE8

HE2

Liquid Ammonia

( V )

VaporAmmonia

CoolingWater

Bleed HeatExchanger

HE1

Brine

Vapor Ammonia

HE6

Explanation:-

Liquid ammonia evaporates in the evaporator (HE1) to give the refrigeration

effect.

Ammonia vapours from evaporator are used for sub-cooling (HE2) the liquid

ammonia supplied to evaporator. This improves energy efficiency of the plant.

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Ammonia vapours are absorbed in absorber (HE3). The heat of absorption is

removed by cooling water.

The strong ammonia solution is pumped to desorber (HE4).

Heat is supplied in the desorber to boil off the ammonia from strong solution.

These vapours also contain some water vapours due to affinity between ammonia

and water.

The ammonia vapours are rectified (purified) in the rectifying column (HE5) and

generate pure ammonia vapours.

These vapours are condensed (HE6) and liquid ammonia is stored in the receiver

(V).

The receiver supplies liquid ammonia to evaporator

Weak ammonia solution in the desorber is sent to absorber for absorption.

A solution heat exchanger (HE7) is provided to cool the weak solution before

entering the absorber and preheat the strong solution before entering the desorber.

This greatly improves of energy efficiency of the plant.

The traces of water in the evaporator are bleed from evaporator to absorber

through Bleed eat Exchanger (HE8). Bleed Heat Exchanger further sub cools

liquid ammonia and improves efficiency.

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I) AMMONIA ABSORPTION REFRIGERATION TECHNOLOGY

One of the oldest known method of refrigeration

Our principles M/s Hans Guentner GmbH & Co AbsorptionsKaelteKG, Germany

are world leaders in Ammonia Absorption Refrigeration technology with over 80

years of experience

Transparent Energy Systems & Hans Guentner have jointly developed Ammonia

absorption Refrigeration Plant for Indian market

Ammonia Absorption Refrigeration has many applications in industries with a

large potential to save running cost, as it runs on low grade heat energy instead of

high grade electricity

Also it has many other advantages viz. very low maintenance, long life, good part

load efficiency etc.

II) WHAT IS AMMONIA ABSORPTION REFRIGERATION PLANT (AARP)?

AARP uses pure liquid ammonia as refrigerant and water as absorbent.

Energy input for AARP is heat from various sources viz. Low Pressure Steam

/Superheated Water /Thermal Oil etc.

Latent heat of vaporization of Liquid Ammonia is used for refrigeration in

evaporator.

Pure liquid ammonia goes from Receiver to the evaporator.

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While going to the evaporator, liquid ammonia is sub cooled in sub cooler by cold

ammonia vapours coming from evaporator. This gives energy efficiency.

In the evaporator, necessary refrigeration effect is achieved.

Ammonia vapours from Evaporator are absorbed by weak Ammonia water

solution in absorber.

Heat of absorption is removed from absorber by cooling water.

Ammonia rich water solution from Absorber is pumped to the rectifying column.

While Ammonia rich water solution goes to rectifying column, it recovers heat in

solution Heat Exchanger from hot weak Ammonia Solution being returned back

to absorber. This renders energy efficiency.

Ammonia from ammonia rich solution is boiled off in the desorber by supply of

heat.

Rectifying column purifies ammonia vapours.

Pure ammonia vapour is condensed to liquid form by cooling water in the

condenser.

The pure ammonia liquid is stored in the Receiver.

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Part of the pure liquid ammonia is recycled to rectifying column as reflux to

maintain necessary purity of ammonia vapours.

Various temperatures, pressures and flow control systems are installed on the

above processes to ensure safety, reliability and accuracy.

AARP can give temperatures up to minus 600 C. Standardized models are

designed for 300 C Special construction for below 300 C to 600 C

AARP is fully automatic in operation and consumes thermal energy in proportion

to the refrigeration demand in 30 to 100% of their rated capacity. This excludes of

course the electric Pumps.

AARP routinely achieves a turndown ratio of 30%. With additional equipment

and controls a turndown ratio down to 0% can be achieved.

Evaporator design is done separately to suit the application.

III) EXCLUSIVE FEATURES OF AMMONIA ABSORPTION

REFRIGERATION PLANT (SYSTEM BORSIG)

A). Design & Material of Construction: -

1) Heat Exchangers to standard TEMA / AD Merck Blatter /

ASME.

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2) Thorough Fabrication stage inspection as per Quality Control

Plan.

3) All heat exchangers are so designed that they have self

cleaning feature to avoid fouling.

4) System is fabricated and factory assembled & modular in

construction. Therefore site work is minimal.

5) System is standardized in design & is designed for wide

operating parameters e.g. NH3 Evaporation Temperature = +5

to -300C. Steam Pressure = 0 to 10 kg/cm2(g). Therefore

BORSIG System can be tuned to different parameters as the

need be -

6) By fitting some additional components standard system

BORRSIG can be used below -300C up to -600C.

7) Operating settings can be changed without change of Hardware

Components

8) Maintenance & Trouble Shooting :

9) A large number of isolation valves have been provided to

facilitate quick inspection and maintenance.

10) Filters and strainers can be cleaned without stopping system.

B.) Safety & reliability: -

1. Reliable adequate control instruments for proper monitoring of

various parameters & interlocks.

2. System is controlled through full proof (fool proof?) PLC

based control.

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3. Each pressure vessel is protected by double safety valves with

three way isolation facility.

4. Safety valve can be maintained without stopping the system.

5. The components are thoroughly tested and inspected by TES

before put to use.

C). Capacity & Operating Control of Parameters for Fluctuating Loads &

Other Parameters: -

1. System can modulate without loss of efficiency over 30 to

100% capacity.

2. System works automatically even on 0 to 100% load variation.

3. Proprietary try type distillation column operates reliably on

wide fluctuations in load WITHOUT loss of efficiency or

stability.

4. Due to tray type rectifying column, System restarts quickly

even on power failure for 20 minutes.

IV) TYPICAL INDUSTRIAL APPLICATIONS OF AMMONIA ABSORPTION

REFRIGERATION PLANT

1. Cold Storage

2. Freeze Drying

3. Food Refrigeration

4. Brine Cooling

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5. Vapor Ammonia Recovery Chemical Processes

6. Ammonia Recovery from Liquor Ammonia from Chemical Processes

7. Ice Making Plants

8. Ice Cream Plants

9. Meat Processing Industries

10. Fish Processing Industries

11. Dairies

12. Refineries

13. Fertilizer plants

14. Bulk Drug Industries

15. Pesticide Plant

V) AMMONIA ABSORPTION REFRIGERATION PLANT Vs. COMPRESSION REFRIGERATION PLANT

Comparison Between Ammonia Absorption Refrigeration Plant & Compression Cycle

Refrigeration Plant

Sr.

No

Ammonia Absorption Refrigeration

Plant

Sr.

No.

Compression Cycle Refrigeration Plant

1 Low running cost on cheap fuels like

Agro fuels, furnace oil, waste heat.

1 High Running Cost due to Electricity as

Energy Input

20

Sr.

No

Ammonia Absorption Refrigeration

Plant

Sr.

No

Compression Cycle Refrigeration Plant

2 Very low maintenance costs due to no

reciprocating parts having high wear & tear

2 High maintenance cost

3 High Plant availability due to no

reciprocating parts ( only one Centrifugal

pump is moving part which has standby )

3 Frequent outage on plant needs standby

compressor

4 No loss of efficiency at part load.

Efficiency improves at part load

4 Loss of efficiency at part load due to fixed

mechanical losses & motor electrical

losses

5 No fouling of Evaporator surfaces due to

lubricating oil

5 Possibility of fouling due to lube oil on

evaporator Surfaces

6 Small size standby D.G. Set is sufficient 6 Large D.G. Set needed on standby

7 Outdoor installation, hence low civil &

structural costs

7 Indoor installation is needed due to

Electrical systems

8 Low foundation costs due to no

reciprocating parts

8 High foundation costs due to reciprocating

Compressors

9 Long life of plant of at least 25 years 9 Low life of Compressor

21

Sr.

No

Ammonia Absorption Refrigeration

Plant

Sr.

No

Compression Cycle Refrigeration Plant

10 No loss of efficiency with usage 10 Loss of efficiency with usage due to

Compressor parts wear & tear.

VI). COMPARISON OF ENERGY CONSUMPTION AND RUNNING COST OF

AARP AS COMPARED TO COMPRESSION CYCLE PLANT.

BASIS OF DESIGN AND SYSTEM CONFIGURATION

No

Description Ammonia Absorption

Refrigeration plant

Compression Cycle

Refrigeration Plant

1 Technical Specifications :

a) Refrigeration Load TR 100 100 100 100

b) Ammonia Evaporation Temp. Deg. C -10 -30 -10 -30

c) Cooling Water Temp. (Deg.C.). Summer :

28 28 28 28

Monsoon: 32 32 32 32

Winter : 24 24 24 24

Average : 28 28 28 28

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2 System configuration AARP Model Modern Reciprocating

Compression Cycle

Plant

AMMONIA EVAPORATION TEMPERATURE = -100 C & -300 C

REQUIREMENT OF UTILITIES

No

Description Unit Ammonia Absorption

Refrigeration plant

Compression

Cycle

Refrigeration Plant

Ammonia Evaporation Temp. Deg.C -10 -30 -10 -30

A]

HEAT INPUT : kcal/hr 567264.15 770897.43 NA NA

STEAM

Steam Pressure kg/cm2(

g)

1.7 5.18 NA NA

**

SteamTemperature Deg. C 130 160.1 NA NA

Steam required at Given Pressure kg/hr 1092.60 1551.03 NA NA

B)

Boiler Fuel Data F.O. Baggase Coal

Calorific value kcal/kg 9710.00 2200.00 4500.0

Boiler efficiency % 95.00 75.00 80.0

C)

Fuel Consumption for above Steam Output. (f900C) (Refer NOTE below).

F.O. lit/hr 69.69 100.62 NA NA

Bagasse. kg/hr 370.15 534.41 NA NA

Coal. kg/hr 169.65 244.94 NA NA

HOT WATER

Supply Temp. Deg. C 150 180 NA NA

Return Temp. Deg. C 120 150 NA NA

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Rate of Circulation m3/hr 18.90 25.69 NA NA

D)

Fuel Consumption for above Hot Water Output.

F.O. lit/hr 64.73 87.96 NA NA

Bagasse. kg/hr 343.80 467.21 NA NA

Coal. kg/hr 157.57 214.13 NA NA

E)

Fuel Prices including C.Excise Duty, Sales Tax and Transport.

F.O. Rs./lit 9.25

Bagasse. Rs/kg 0.50

Coal. Rs/kg 2.50

F)

Fuel Cost for Steam.

F.O. Rs/hr 644.63 930.73 NA NA

Bagasse. Rs/hr 185.07 267.20 NA NA

Coal. Rs/hr 424.12 612.35 NA NA

Fuel cost for Hot Water

F.O. Rs/hr 598.75 813.63 NA NA

Bagasse. Rs/hr 171.90 233.60 NA NA

Coal. Rs/hr 393.92 535.32 NA NA

AMMONIA EVAPORATION TEMPERATURE = -100 C & -300 C

REQUIREMENT OF UTILITIES ( continued )

G) ELECTRIC POWER :

Power required for Compressor :

At Compressor shaft KW - - 110 191

Belt losses ( 8% ) KW - - 8.8 15.28

Power required at Motor shaft KW - - 118.8 206.28

Power for Solution Pumps Motor. KW 7.5 15 - -

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Power for Cooling water Pump. KW 12.3 12.3 5.6 5.3

Total Power at Motor Shaft KW 19.8 27.3 124.4 211.6

Add Motor Losses (Motor Efficiency assumed

93%).

KW 1.5 2.1 9.4 15.9

Total Power at Motor Terminals KW 21.3 29.4 133.8 227.50

Add HT metering losses (Transformer

efficiency assumed 95%)

KW 1.1 1.5 6.7 11.40

Total Power Metered at incoming of HT

Transformer

KW 22.4 30.9 140.5 238.9

H) Make-up-Water

Make-up-Water M3/hr 1.50 1.85 0.68 0.80

Cost of make up water

(@

Rs.10.00 per m3/hr)

Rs. 15 18.50 6.80 8.00

Cost of Heat & Electricity in Rs./hr

Source of Power Source of

Steam

1

Steam + Grid Power + Make up water F.O. 771.63 1103.73 709.3 1202.5

Coal 551.12 785.35

Bagasse 312.07 440.20

2

Hot Water + Grid Power + Make up water F.O. 707.18 961.40 709.3 1202.5

Coal 520.92 708.32

Bagasse 298.90 406.60

*

The maintenance cost of AARP is much lower as compared to Compression Cycle Refrigeration Plant

*

AARP System Borsig can also be driven by Superheated Hot Water or Thermic Fluid of Equivalent Temp.

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AN OVERVIEW OF FERTILIZER INDUSTRY: -

GROWTH: -

The Industry had a very humble beginning in 1906, when the first manufacturing unit of

Single Super Phosphate (SSP) was set up in Ranipet near Chennai with an annual

capacity of 6000 MT. The Fertilizers & Chemicals Travancore of India Ltd. (FACT) at

Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri in Bihar (Now

Jharkhand) were the first large sized-fertilizer plants set up in the forties and fifties with a

view to establish an industrial base to achieve self-sufficiency in food grains.

Subsequently, green revolution in the late sixties gave an impetus to the growth of

Fertilizer industry in India. The seventies and eighties then witnessed significant

additions to the fertilizer production capacity.

The installed capacity as on 28.02.2003 has reached a level of 12.11 million MT of

nitrogen (inclusive of an installed capacity of 20.84 million MT of urea after

reassessment of capacity) and 5.36 million MT of phosphatic nutrient, making India the

3rd largest fertilizer producer in the world. The rapid build up of fertilizer production

capacity in the country has been achieved as a result of a favourable policy environment

facilitating large investments in the public, co-operative and private sectors. Presently,

there are 57 large sized fertilizer plants in the country manufacturing a wide range of

nitrogenous, phosphatic and complex fertilizers. Out of these, 29 units produce urea, 20

units produce DAP and complex fertilizers, 13 plants manufacture Ammonium Sulphate

(AS), Calcium Ammonium Nitrate (CAN) and other low analysis nitrogenous fertilizers.

Besides, there are about 64 medium and small-scale units in operation producing SSP.

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SELF SUFFICIENCY IN FERTILIZER SECTOR: -

Out of three main nutrients namely, nitrogen, phosphate and potash, required for various

crops, indigenous raw materials are available mainly for production of nitrogen. The

Government's policy has hence aimed at achieving the maximum possible degree of self-

sufficiency in the production of nitrogenous fertilizers based on utilization of indigenous

feedstock. Prior to 1980, nitrogenous fertilizer plants were mainly based on naphtha as

feedstock. A number of fuel oil/LSHS based ammonia-urea plants were also set up during

1978 to 1982, two coal-based plants were set up for the first time in the country at

Talcher, Orrisa and Ramagundam, Andhra Pradesh. These coal based plants have been

closed by Government with effect from 1.4.2002. However, with natural gas becoming

available from offshore Bombay High and South Basin, a number of gas based ammonia-

urea plants have been set up since 1985. As the usage of gas increased and its available

supply dwindled, a number of expansion project camp upon the last few years with duel

feed facility using both naphtha and gas Feasibility of making available liquefied natural

gas (LNG) to meet the demand of existing fertilizer plant and/or for the expansion

projects along with the possibility for utilizing newly discovered gas reserves is also

being explored by various fertilizer companies in India.

In case of phosphates, the paucity of domestic raw material constrains the attainment of

self-sufficiency in the country. Indigenous rock phosphate supplies meet only 5-10% of

the total requirement of P205. A deliberate policy has therefore been adopted which

involves mix of three options. First, domestic production based on indigenous/imported

27

rock phosphate and imported sulphur. Second, domestic production based on imported

intermediates, viz. Ammonia and phosphoric acid; and third, import of finished

fertilizers. During 2001-02 roughly 87% of the requirement of phosphatic fertilizers was

met through the first two options.

In the absence of commercially exploitable potash sources in the country, the entire

demand of potassic fertilizers for direct application as well as for production of complex

fertilizers is met through imports.

Given the Volatility in international fertilizer market in general and urea market in

particular, marginal provision through imports could be used to the country's strategic

advantage. This is also desirable as the international market, especially in case of urea, is

very sensitive to demand supply scenario. The possibility of securing additional supply of

urea by permitting economically efficient indigenous units to produce their reassessed

capacity to substitute imports is also being explored in the pricing regime for urea units,

which is applicable from 01.04.2003.

TECHNOLOGICAL ADVANCEMENTS: -

To meet the growing demand of fertilizers in the country through indigenous production,

self-reliance in design engineering and execution of fertilizer projects is very crucial.

This requires a strong indigenous technological based in planning, development of

process know-how, design engineering and expertise in project management and

execution of the projects. With the Continuing support of the Government of India for

28

research and development as well as for design engineering activities over the years,

Indian consultancy organizations Project and Development India Ltd. (PDIL) & FACT

Engineering and Design Organization (FEDO) in the field of fertilizers have grown

steadily in tandem with the fertilizer industry. These consultancy organizations are today

in a position to undertake execution of fertilizer projects starting from concept/designing

to commissioning of fertilizer plants.

The fertilizer plant operators have now fully absorbed and assimilated the latest

technological developments incorporating environmental friendly process technologies

and are in a position to operate and maintain the plants at their optimum levels without

any foreign assistance and no international standards in terms of capacity utilization,

specific energy consumption & prescribed pollution standards. The average performance

of gas-based plants in the country today is amongst the best in the world.

The country has also developed expertise for fabrication and supply of major and critical

equipment such as high pressure vessels, static and rotating equipment, Distributed

Control System (DCS), heat exchangers and hydrolyser for fertilizer projects. The

indigenous vendors are now in a position to compete and secure orders for such

equipment both in India & abroad under International Competitive Bidding (ICB)

procedure. Presently, about 70% of the equipment required for a major domestic fertilizer

plant are designed and manufactured indigenously.

A significant development/advancement has also been made in the country in the field of

manufacturing of catalysts of various ranges by our catalyst-manufacturing organization

like PDIL.

29

DEVELOPMENT & GROWTH IN FERTILIZER INDUSTRY: -

Capacity Build-Up: -

At present, there are 57 large sized fertilizer plants in the country manufacturing a wide

range of nitrogenous, phosphatic and complex fertilizers. Of these, 29 units produce urea,

20 units are of DAP and complex fertilizers, 7 units produce low analysis straight

nitrogenous fertilizers and remaining 9 manufacture ammonium sulphate as by-product.

Besides, there are about 64 small and medium scale plants in operation producing single

super phosphate (SSP). The total installed capacity of fertilizer production, which was

120.58 lakh MT of nitrogen and 52.31 lakh MT of phosphate as on 31.03.2003 has

marginally reduced to 119.98 lakh MT of nitrogen and 53.60 lakh MT has risen to 54.20

lakh MT of phosphate as on 01.04.2004.

Production capacity: -

The production of fertilizers during 2003-04 was 106.34 lakh MT of nitrogen and that of

phosphatic fertilizers was 36.30 lakh MT of phosphate. The production target for 2004-

2005 has been fixed at 117.02 lakh MT of nitrogen and 48.78 lakh MT of phosphate,

representing a growth rate of 10.04% in nitrogen and 34.4% in phosphate, as compared to

the actual production in 2003-2004. Production targets of both nitrogen and phosphate

are less than the installed capacity because of low production by Rashtriya Chemicals &

Fertilizers (RCF), equipment problems. This trend is likely to continue as the

Government has decided to close all the plants of Fertilizer Corporation of India (FCI)

30

and Durgapur & Baruni plants of Hindustan Fertilizer Corporation of India (HFC),

barring Namrup units of erstwhile HFC presently under revamp, which is now under the

separate entity of BVFCL. Actual production during 2003-04 was 106.32 lakh MT of

nitrogen and 35.68 lakh MT of phosphate. Taking ëNí and ëPí together, almost equal to

the production during the corresponding period of last year.

The production performance of both nitrogenous and phosphatic fertilizers during 2003-

04 was less than the target mainly due to constraints in supply and quality of natural gas,

equipment breakdowns, delay in commissioning of Namrup-II and Duncan Industries

Limited (DIL) Kanpur remaining under unscheduled shutdown. In case of phosphate,

production in DAP plants was low due to shortage of phosphoric acid and imported

ammonia. Similarly, production of complexes was also low due to high inventory in silo

as well as in field go downs and poor off-take due to dismal sale in many states.

Capacity Utilization: -

The domestic fertilizer industry has attained the level of capacity utilization that

compares favorably with others in the world. The capacity utilization during 2002-03 and

2003-04 was 87.2% and 88.6% for nitrogen and 72.8% and 67% for phosphate

respectively.

The capacity utilization of the fertilizer industry is expected to improve through

revamping, modernization of the existing plants and closure of unviable capacity of sick

fertilizer units

31

The unit-wise details of installed capacity production and capacity utilisation during

2002-03 and 2003-04 are given in Annexure-IV.

Strategy for growth: -

The fertilizer industry has adopted the following strategy to increase fertilizer production;

1) Expansion/retrofitting/revamping of existing fertilizer plants.

2) Setting up joint venture projects in countries having abundant and cheaper raw

material resources.

3) Working out the possibility of adopting alternative sources like liquefied natural

gas to overcome the constraints in the domestic availability of natural gas.

PROJECTS UNDER IMPLEMENTATION: -

The major fertilizer projects involving an estimated investment of about Rs 689 crore are,

at present, under implementation in the country. When commissioned, these projects will

produce an additional .38 million MT of urea and .39 million MT of DAP per annum.

The details of these projects are given below:-

1) Brahamputra Valley Fertilizer Corporation LTD (BVFCL) is revamping its

ammonia-urea units at Namrup, Assam in the North Eastern region of the country,

at an estimated cost of RS 509.40 crore to produce an additional .38 million MT

per annum of urea. The project is expected to be commissioned in July 2003.

32

2) Gujarat State Fertilizers & Chemicals Ltd. (GSFC), is implementing a project for

expanding the capacity of its plants at Sikka, Gujarat, by .39 million MT per

annum of DAP at an estimated cost of RS 180 crore. The project has been

completed and is under trial commissioning since June 2002.

At present, natural gas based plants account for more than 60% of urea capacity, naphtha

is used for less than 30% of urea production and the balance capacity is based on fuel oil

and LSHS as feedstock. The two coal based plants at Ramagundam, Andhra Pradesh and

Talcher, Orissa were closed down due to technological obsolescence and nonviability.

Natural gas has been the preferred feedstock for the manufacture of urea over other

feedstocks viz. naphtha and FO/LSHS, firstly, because it is clean and efficient source of

energy and secondly, it is cost effective and internationally competitive in terms of

manufacturing cost of urea. However, pricing of feedstock also becomes a very important

factor in the production of urea due to the fact that the cost of feedstock constitutes about

60 to 75% of the total cost of production of urea. In respect of gas based units, cost of

feedstock accounts for 60% of cost of production, whereas for naphtha based and

FO/LSHS based units, it accounts for about 75% of the cost ofproduction.

Although natural gas is the preferred feedstock for production of urea, due to the

dwindling supplies of natural gas, even the gas based units have been forced to partially

use naphtha even for feedstock. The burgeoning demand for natural gas by sectors such

as fertilizer, power, transport etc. has resulted in efforts to increase domestic gas supply,

mainly from fields being developed by private companies/joint ventures as well as

33

development of new gas reserves recently discovered, through step up in exploration. It

has also given rise to the prospects of early LNG import into the country by 2004-05. It is

expected that by the terminal year of the tenth Five Year Plan, 4-5 LNG terminals may be

operational at different coastal locations in the country.

The Dahej LNG terminal of Petronet LNG Ltd. (PLL) has already been commissioned.

The fertilizer industry is in negotiations with the prospective LNG suppliers on the issues

of pricing and availability of LNG. An Inter-Ministerial Group, under the Chairmanship

of Deputy Chairman. Planning Commission has been constituted to deliberate on these

issues.

The Government has already announced a policy for treatment of conversion of the non-

gas based units to NG/ LNG. Under this policy, while the investments made on

conversion will not be recognised, the operational efficiency including energy efficiency

arising from conversion to NG/ LNG will not be mopped up for a maximum period of 5

years in respect of naphtha based plants and for 10 years in respect of FO/LSHS based

plants from the date of commissioning of the converted plant.

JOINT VENTURES ABROAD: -

Due to constraints in the availability of gas, which is the preferred feedstock for

production of nitrogenous fertilizers and the near total dependence of the country on

imported raw materials for production of phosphatic fertilizers, the Government has been

encouraging Indian companies to establish joint venture production facilities, with buy

34

back arrangement, in other countries, which have rich reserves of natural gas and rock

phosphate.

The details of the existing joint ventures in the fertilizer sector are given below. The joint

ventures already established have given the Indian sponsors an assured source of supply

of phosphoric acid, a vital input for manufacture of DAP and other phosphates.

The Government of India (GOI), Indian Farmers Fertilizer Cooperative Ltd. (IFFCO) and

Southern Petrochemical Industries Corporation Ltd. (SPIC) are equity partners in a joint

venture company set up in Senegal. The initial equity contribution of the Indian

consortium in the venture in 1980 amounted to Rs. 13.67 crore, i.e. about 18.20% of its

total equity. At present the Indian sponsors together hold 25.57% of equity (GOI- 9.06%,

IFFCO-15.23% and SPIC-1.28%) in the joint venture company in Senegal named

Industries Chimiques du Senegal (ICS). The company produces phosphoric acid and

finished phosphate fertilizers in its plants in Senegal.

The phosphoric acid produced in the plant is being utilized for production of phosphate

fertilizers in the country through buy back arrangements by the Indian sponsors. ICS

implemented a project for doubling the production capacity of its phosphoric acid plants

and development of new rock phosphates mines at cost of about US $ 250 million.

The phosphoric acid production capacity of the plant has thus increased to 6.60 lakh

tonnes per annum. A major portion of the phosphoric acid produced by ICS is sold to

35

IFFCO. SPIC, Jordan Phosphates Mines Company Ltd.(JPMC) and Arab Investment

Company (AIC) have set up a joint venture project in Jordan to produce 2.24 lakh tonnes

of phosphoric acid per annum. 52.17% of the equity of the joint venture named Indo

Jordan Chemicals Company Limited is held by SPIC, 34.86% by JPMC and 12.97% by

AIC. A joint venture (Indo Moroc Phosphore SA) between Office Cherifien Des

Phosphates (OCP), Morocco and Chambal Fertilizers & Chemicals Ltd. (CFCL) to

produce 3.30 lakh tones per annum of phosphoric acid at a total cost of US $ 205 million

had been commissioned in Morocco in October 1999. The equity of US $ 65 million in

the venture is held by OCP and CFCL equally.

Joint Venture Projects Under Implementation/Consideration

IFFCO & KRIBHCO along with Oman Oil Company are setting up a joint venture urea

project in Oman for production of 16.52 LMT of urea and 2.48 LMT of ammonia per

annum. Oman India Fertilizer Company (OMIFCO), the joint venture company, will sell

urea produced to Government of India at fixed long term prices (LTPs), for a period of 15

years and ammonia to IFFCO for 10 years at a fixed price. The implementation of this

project has commenced on 15.8.2002 and is expected to be completed within 35 months

i.e. by 15.7.2005. OMIFCOís equity of US $ 320 million is held by the Oman Oil

Company (50%) and Indian Sponsors, IFFCO & KRIBHCO equally (25% each).

SPIC is setting up a gas-based nitrogenous fertilizer plant at Dubai in United Arab

Emirates to produce 4.00 lakh tonnes of urea per annum at an estimated cost of US

$ 170 million. The joint venture company by the name SPIC Fertilizers and Chemicals

36

Limited, incorporated in Mauritius, is promoted by SPIC with equity participation of

51%, MCN Investment Corporation of USA with equity participation of 39% and

Emirates Trading Agency of UAE with equity participation of 10%. The project is under

implementation and is expected to be commissioned during the last quarter of 2005 and

urea produced is proposed to be imported by SPIC through a firm buy back arrangement.

A Memorandum of Understanding (MOU) was signed between Government of

India/IFFCO & KRIBHCO and Govt. of Iran/Qeshm Free Area Authority (QFAA) on

6.3.1994 for exploring the possibility of setting up a nitrogenous fertilizer plant in QFAA.

A supplementary MOU was signed on 26.11.1996, reflecting the agreed position of the

joint venture partners on the price of inputs required for the proposed fertilizer project.

The feasibility report for the establishment of a 7.26 lakh MTPA urea and 0.74 lakh

MTPA of surplus ammonia project at an estimated cost of US $ 470 million was

appraised by the joint venture partners and found to be unviable. Fresh studies are being

conducted by QFAA on the proposal for exploring possible alternatives.

37

RESEARCH METHODOLOGY

RESEARCH METHODOLOGY

The methodology is basically the set of rules, procedures, tools, and techniques used by

the researcher for realization of research objective. The process of designing research

study involves many interrelated decisions.

The most significant decision is the choice of research approach. This determines how

the information will obtain.

There are three types of research approach: -

1) Exploratory research

2) Descriptive research

3) Causal research

These types differ significantly in terms of research purpose, research question,

precision of hypotheses that are formed and data collection method used.

1) Exploratory research: -

Exploratory research is seeking insight into general nature of a problem, the possible

decision alternatives and relevant variables that need to be considered. The objective of

exploratory research is to find out new ideas flexibility, & ingenuity characterized by

the investigation. In the exploratory research emphasis is given on the finding practices

38

and policies that need changing and developing possible alternatives. Exploratory

research seeks to discover new relationships. Hence most of the marketing research is of

an exploratory type. Exploratory research defines problem, which is then solved by

conclusive research.

2) Descriptive research: -

Descriptive research gives emphasis on description & such studies are simply fact

gathering expedition. Descriptive studies attempt to obtain a complete & accurate

description of situation. Descriptive data are based as direct basis for marketing

decisions.

3) Causal approach: -

When it is necessary to show that one variable causes or determine the value of other

variable the causal research approach is used. In our research approach the exploratory as

well as descriptive approach is used to explore the various ways of obtaining the

information.

In planning and designing a specific research project it is necessary to anticipate all the

points that must be undertaken if the project is to be successful in collecting valid and

reliable information.

39

The steps in which the project was carried out were as follows: -

1) Define the problem and specify objective.

2) Developing research plan.

1) Design the data collection method.

2) Organize and carryout the field work

3) Analyze the collected data

4) Presentation of the project report

40

RESEARCH ANALYSIS & FINDINGS

The survey was carried out in the states of Rajasthan, Uttar Pradesh, Kerala, Tamil Nadu,

Andhra Pradesh & Goa. The analysis has shown that all the fertilizer industries located in

these regions use Vapour Compression Refrigeration System for their manufacturing

processes. The power cost of these industries is high due to the utilization of Vapour

Compression Refrigeration System. Hence the analysis has shown that there is a lot of

energy saving potential by utilizing our Ammonia Absorption Refrigeration Plant.

Different tabulations and graphs are made for the data collected during field survey

41

FIRST PREFERNCEWISE ANALYSIS OF FOUR FACTORS: -

SAMPLE SIZE=15

Operation Cost Initial Cost Safety

Convenience

No. Of Respondent

given first preference

7 4 2 2

FIRST PREFERENCE WISE ANALYSIS OF FOUR FACTORS

0

2

4

6

8

Operation Cost Initial Cost Safety Convinience

No. Of Respondent given first preference

Interpretation: -

1) The above graph shows that most of the respondents gave first

preference to the operating cost of AARP.

2) The operation cost and initial cost were primary factors while

safety and convenience were of secondary importance to them.

3) As the operating cost of AARP is very low hence the response is

favorable.

42

ANALYSIS OF EXISTING REFRIGERATION SYSTEMS USED: -

SAMPLE SIZE=15

Absorption refrigeration

Compression Refrigeration

Steam jet refrigeration

No Refrigeration

No. Of respondents

2 10 1 2

EXISTING REFRIGERATION SYSTEM USED

02

46

810

12

Absorptionrefrigeration

CompressionRefrigeration

Steam jetrefrigeration

No Refrigeration

No. Of respondents

Interpretations: -

1) The above graph shows that existing system of more than 66% of respondents is

Vapour compression refrigeration system the operating cost of which is very high.

2) The AARP is already installed in 13% of respondents.

3) 6% of the respondents use steam jet refrigeration while 13% of respondents do

not require refrigeration for their manufacturing processes.

43

ANALYSIS OF POSSIBILITY OF ENERGY SAVINGS: -

SAMPLE SIZE=15

Highly possible

Somewhat possible Not possible

No. of respondents

7 3 5

POSSIBILITY OF ENERGY SAVINGS

47%

20%

33%Highly possible

Somewhat possible

Not possible

Interpretations: -

1) The above exploded pie chart shows that there is high energy saving potential in

47 % of the respondents due to availability of required waste heat sources.

2) The pay back period will be higher for the remaining respondents due to non

availability of required waste heat sources.

44

ANALYSIS OF INTREST OF USING AARP: -

SAMPLE SIZE=15

Already using

Highly Interested

Somewhat interested

Not interested

No. of

respondents 2 7 3 5

ANALYSIS OF INTREST OF USING AARP

Already using12%

Highly Intrested41%Somewhat

intrested18%

Not intrested29%

Already using

Highly Intrested

Somewhat intrested

Not intrested

Interpretations: -

1) The above pie chart shows that 41% are highly interested in installing AARP due

to attractive pay back period.

2) Since the pay back period for the remaining respondents was not that attractive

their response was not so strong.

45

LIMITATIONS OF THE PROJECT

No project is ideal. In reality I came across different problems which act as limitations of

the project such as-

1) Some of the respondents did not give other relevant information which was

required for the project.

2) Non -availability of official data.

3) There was time constraint (2 months). Hence total no. of plant visits was limited.

4) To keep the project cost minimum due to budget constraints

5) Transportation problems due to rainy season.

46

CONCLUSION

After collecting data from the field research following conclusions is made.

1. There is a refrigeration requirement in the fertilizer industries

2. The existing refrigeration system used for manufacturing process is

Vapour compression refrigeration system the running cost of which is

very high.

3. Industrialists have shown first choice to the operating cost of Ammonia

Absorption Refrigeration Plant , which is very low.

4. Most of the fertilizer plants visited have waste heat sources. Hence there

is a ample scope for Ammonia Absorption Refrigeration Plant to be

installed in Fertilizer Industry.

47

RECOMMENDATIONS

1. As the Ammonia Absorption Technology is new the product demonstrations and

intensive product awareness programs should be carried out in trade shows,

exhibitions etc.

2. The product literatures and catalogues should be revised to make it more users

friendly.

3. For first installation of Ammonia Absorption Refrigeration Plant in Fertilizer

industry, Transparent Energy Systems should provide financing facilities and

other monetary concessions in order to promote its product in other fertilizer

industries.

4. Due to complex plant layouts and complex manufacturing processes of fertilizer

industries the period of warranty and free after sales services should be extended

for installation of AARP in fertilizer sector.

5. As Transparent Energy Systems Pvt. Ltd are technologically sound but are not

known throughout India, hence intensive corporate brand promotion campaigns

should be carried out in order to develop confidence amongst the industrial

buyers.

48

BIBLIOGRAPHY

1. Marketing Management- Eleventh edition, Philip Kotler.

2. Marketing Management- Second edition, Rajan Saxena.

3. Refrigeration & Air conditioning, R. S. Khurmi & J. K. Gupta.

4. Industrial Refrigeration, Stoker.

5. ASHRAE Handbook of Refrigeration & Air conditioning.

6. Refrigeration & Air conditioning, Domkundvar & Arora.

7. www.indianfertilizer.com

8. www.businessdirectory.com

9. Annual reports published by Department of Fertilizer, Govt. of India.

10. Product literatures & catalogues of Transparent Energy Systems Pvt. Ltd.

49

ANNEXURE

PHOTOGRAPHS OF AARP INSTALLATIONS

PHOTOGRAPH NO.1

50

PHOTOGRAPH NO.2

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