Blended Fertilisers of Fertizer industry.ppt

The biggest difference with chemical fertilizers is that organic fertilizers improve the soil's health and condition, leading to better fertility. This article will present more elaborate information about the characteristics of organic fertilizers.
To be able to create the optimal NPK proportion, the right amount of these nutritional elements is of high importance. In this article, the difference between organic and mineral fertilizers is explained by our fertilizer specialist.
Calcium (Ca), or lime, is an important part of the fertilization schedule in greenhouse horticulture. The application of lime is often not optimal. It can be improved.
Advantages of blended fertilizers
Blended fertilizers or composed big bags have several advantages:
Better solvability, ensuring a clear substance in the fertilizer tank and less product precipitating on the bottom of the tank, resulting in a lower risk of blockage.
Nutrients can be dosed directly from the big bag, saving time and simplifying the mixing process of the fertilizers in the tanks.
The mix is measured carefully, meaning no waste of nutrients. This resulting in savings in terms of expenses.
Trace elements
Blended fertilizers do not contain trace elements. For optimal growth, it is recommended to add the additional trace elements, possibly chelates. You can also choose to get a custom-made trace element mix. Feel free to ask our specialists for advice.

1. 1
Blended Fertilisers Plant

2. 2
Blended Fertilisers Fertiliser & Power
Project Highlights :
Manufacturing route : Steam Granulation -Fusion Blend
Proposed Location : Gomti Sugar, Ajbapur
Potential Customers : Sugarcane growers in Western UP
Proposed Grades : Following Selected to give max. Value / cost ratio to
farmer in sugarcane growing areas
20-20-10 , 20-20-10-10(S) , 16-30-15 , 15-24-12
Manufacturing : One grade at a time ,switch over to another grade in
Capability short period
Max Capacity of Plant : 60,000 TPA to be expanded to 120,000 TPA in 3
rd
Year
Project Cost : Rs 6.5 Crs for 60,000 TPA plant
Completion of project : 10 months from all approvals
Raw Materials : Urea, DAP, MOP, Sulphur, Gypsum, Plaster of Paris

3. 3
Fertiliser & Power
Synergy with existing Business :
Available marketing channels in target marketing area
Custom made products exclusively for cane growing areas to
be marketed
Customised mixtures shall provide better value proposition to
customer
Can be used to develop micronutrient added fertilizers
Demand perceived for better quality fertiliser mixture at cheaper
rates
Opportunity to add value to products already being sold by
company
The opportunity to create niche product in primarily commodity
market can be useful in view of limited Urea production
Blended Fertilisers

4. 4
Fertiliser & Power
Market potential and demand
Total Fertiliser consumption in UP growing @ 4.6 % p.a. since 1993 -94
Increasing preference for Complex Ferilisers -growth rate faster at 14.8%.
Total fertiliser consumption growing at 3.8 % in India while Complex Mixture
consumption has grown at 6.3%
Complex mixtures form 3.7 %of total fertiliser consumption in UP compared to
national average of 12%
Potential Demand for blended fertilizers is expected to be high due to better cost
benefit ratio to farmer thus replacing existing DAP, Urea consumption
Steam Granulated mixture has better quality compared to existing physical
mixtures and better market acceptance
Blended Fertilisers

5. 5
Fertiliser & Power
Market Potential and Demand
Potential to substitute 25% consumption of straight -run Fertilisers
for sugar cane growing areas with blended Fertilisers.
Expected demand to be met in two phases
Phase -1 : Cover Western UP ( max potential for 75, 000 TPA)
Phase -2 : Cover entire UP ( max potential 1.25 Lac TPA
through additional capacity in Eastern UP)
Blended Fertilisers

6. 6
Fertiliser & Power
Assumptions for working out financials :
Based on demand projections, initial capacity of 60,000 TPA considered.
New plant of 60000 TPA at new location to be installed in 3 rd year
Costing based on average expected raw material cost of Rs 6578 / Ton calculated
for 4 mixtures
Inputs prices as at farmgate minus dealer’s margins. In case, non standard inputs
are used, profitability is expected to improve further.
Selling price of Mixtures taken at Rs 8000 / MT to work out average profitability
Sales tax to be borne by the farmer
Blended Fertilisers
Contd….

7. 7
Fertiliser & Power
Assumptions
Rates for utilities taken as available at Ajbapur.
For 2
nd
plant to be located in Eastern UP at a new location , Conversions cost
expected to increased by Rs 100/T.
Marketing within 200 km radius
7 days inventory of Raw Material and finished goods.
7 days interest-free credit assumed for raw material purchases.
Capital cost funded from internal accruals and no term loans considered
Depreciation taken 6% p.a.
Bills receivables assumed as 4% of yearly sales
No inflation in cost considered either in raw materials or in product realisation
Inflation considered at 2.5 % for capacity addition in 3
rd
year.
Blended Fertilisers

8. 8
Fertiliser & Power
Blended Fertilisers -Profitability
Particulars
Max Capacity ( TPA ) 60,000
2004-05
Blended Fertilisers
60,000 75,000 1,20,0001,20,000
Production ( TPA ) 40,000 50,000 75,000 1,00,0001,250,000
Capacity Utilisation ( %) 83 100 83 10466
Avg. Raw Material Cost 26.3 32.9 49.3 65.8 82.2
Sales 32.0 40.0 60.0 80.0 100.0
Conv. & Overhead Cost 1.8 2.3 3.5 4.9 6.3
Marketing & Transport 1.1 1.4 2.1 2.8 3.5
Total Operating expenses 29.2 36.6 54.9 73.5 92.0
PBDIT 2.6 3.2 4.8 6.1 7.5
2005-06 2006-07 2007-08 2008-09
( Rs/ Crs)
Intt. On Working Capital 0.2 0.2 0.3 0.4 0.5
Contd…

9. 9
Fertiliser & Power
Blended Fertilisers -Profitability
Particulars
PBDIT
2004-05
Blended Fertilisers
Intt. On Term Loans 0
PBDT
PBT 2.2 2.8 4.0 5.4 6.8
Depreciation 0.4 0.4 0.8 0.7 0.7
2005-06 2006-07 2007-08 2008-09
( Rs/ Crs)
0 0 0 0
2.6 3.2 4.8 6.1 7.5
2.6 3.2 4.8 6.1 7.5

10. 10
Fertiliser & Power
Blended Mixtures -Operating Cash Flow
Particulars 2004-05
Blended Fertilisers
Operating Profit
Gross PBDT
Intt. On Term Loans 0 0 0 0 0
Current Assets 2.4 3.0 4.5 6.0 7.6
Current Liabilities 0.5 0.7
2005-06 2006-07 2007-08 2008-09
( Rs/ Crs)
Capex 6.9
1.0 1.4 1.7
2.6 3.2 4.8 6.1 7.5
2.6 3.2 4.8 6.1 7.5
Net Working Capital 1.9 2.3 3.5 4.6 5.9
Operating Cash Flow 0.7 0.9 -5.6 1.5 1.6
0 0 0 0

11. 11
Fertiliser & Power
Blended Mixtures -Total Capital Employed
Particulars
Fixed Assets -Gross 6.5
2004-05
Blended Fertilisers
6.5 13.4 13.4 13.4
Depreciation 0.4 0.8 1.6 2.4 3.2
Net Fixed Assets 5.7 11.8 11.0 10.26.1
Total Capital employed 8.0 8.0 15.3 15.8 16.1
Net Working Capital
2005-06 2006-07 2007-08 2008-09
( Rs/ Crs)
ROCE ( % ) 32 40 31 39 46
1.9 2.3 3.5 4.6 5.9

12. 12
Fertiliser & Power
Break-up of capital cost for single plant of 60,000 TPA
Particulars
Taxes, Insurance, freight
Civil, Storage & other facilities
Erection & Commissioning
Total Cost
Contingency @ 5%
IDC @ 12.5 %
TOTAL
Equipment Cost 2.61
0.64
1.24
0.31
4.80
0.25
0.62
6.54
Value ( Rs/Crs)
Blended Fertilisers
W/ Capital Margin Money -25% 0.87

13. 13
Fertiliser & Power
Areas required for further action / study
•Finalise the long term market potential in Western U.P and surrounding areas
•Visit existing plants for better understand the production process
•Finalise capital cost based on
•Firm estimates from technology suppliers
•Extent of in-house fabrication of equipment
•Location of second hand equipment / plant
•Finalise the selling price of the products
•Study the legal aspects of putting up Mixture plant within Gomti premises
•Involve local Agricultural Universities for determining Cost benefit
ratio of the mixtures
•To get approval from State govt. for manufacturing desired fertiliser grades
Blended Fertilisers