New Delhi: State-owned fertiliser major Hindustan Urvarak & Rasayan Ltd (HURL) is working on a major expansion plan that involves spending around Rs 3,000 crore across its three projects — Gorakhpur (UP), Barauni (Bihar) and Sindri (Jharkhand) — to ramp up capacity to 50 lakh tonne over 2-3 years.
The PSU has a total capacity of 38 lakh tonnes at the three units put together, and it achieved 94 per cent capacity utilization last year. The three units have been set up at a cost of around Rs 27,900 crore.
“We have a major plan for expansion. We have already received approval from the board for Rs 200 crore capex for a Nano urea plant of 1.5 lakh Bottles per Day capacity, as an expansion of the Gorakhpur unit. This will produce new generation Urea,” HURL Managing Director S P Mohanty told ETEnergyworld in an exclusive interview.
The company is also planning a second expansion in the form of an Ammonium Sulphate plant in Barauni unit where it wants to utilize surplus Ammonia available. This is a two stage expansion of 1.5 lakh tonne each. For the first stage, it has planned a Rs 500 crore investment and the next expansion will require around Rs 300 crore. The total project cost for the expansion will be around Rs 800 crore for the two phases.
“So, we are talking about Rs 1,000 crore expansion in Gorakhpur and Barauni units put together. Also, given the DAP crisis internationally, we have been asked to go for manufacturing of NPK complex fertilisers. One complex fertiliser plant will cost Rs 2,000 crore. That plant is being planned to be set up as an expansion in the Sindri unit. Its capacity will be around 4 lakh tonne per annum, around 1000 tonne per day,” Mohanty said.
For the Nano urea plant, HURL has already started work and the technology transfer is currently going on. Its LSTK tender is expected to be issued by next month. For the Ammonium Sulphate plant at Barauni, the DFR is already prepared and it is in the finalisation stage. It will be up for the approval of the board soon. Once it is approved, the company will start work on the LSTK tender. The NPK plant is still in the niche stage.
Post these expansion plants, HURL’s total capacity will go up to 50 lakh tonnes in the next 2-3 years and this will require investment of around Rs 3,000 crore. “For this we will approach the market to raise funds. This is the second year of good profit for us. We will require around Rs 1,000 crore capex for the Gorakhpur and Barauni units. Around 70 per cent of that funding requirement will be met through our lenders consortium. They are ready to finance it,” Mohanty said.
HURL is hoping to achieve Profit Before Tax (PBT) of Rs 2,000 crore in the current financial year along with revenue from operations of around Rs 16,000 crore as compared to Rs 14,500 crore achieved last year.
India consumes around 350 lakh tonne of urea annually. The country used to import around 75 lakh tonne to meet a part of this demand. The government recently took the major policy decision for the revival of five urea plants including Sindri, Gorakhpur, Barauni, Talcher and Ramagundam. When these five units are fully operational, their production will broadly match the level of imports at the national level.
