The only urea manufacturing company in eastern India – Brahmaputra Valley Fertilizer Corporation Limited (BVFCL) – at Namrup in Assam, faces an uncertain future due to a lack of adequate government attention. The single manufacturing plant of BVFCL, the Namrup-III has been functional for the past 35 years, although the life expectancy of the unit was just 15-20 years from the year of inception.
Several snags and minor accidents on the decades-old unit have stipulated the fear of a major accident.
Although proposals and promises have been made since 2006 for the construction of a fourth plant, BVFCL’s replies to RTIs paint a contradictory picture.
Brahmaputra Valley Fertilizer Corporation Limited, Namrup
BVFCL, Namrup, is the only urea manufacturing company in the whole north eastern and eastern part of India. The first unit of BVFCL, the erstwhile Namrup Unit of Hindustan Fertilizer Corporation Limited, was established in 1969. The company produces urea from cheap and locally available domestic natural gas and has played a crucial role in the development of the Northeast region. It also produces Neem Coated Urea and two organic fertilizers, Liquid BioFertilizer, and Vermicompost under the brand name Mukta.
The second (Namrup-II) and third (Namrup-III) production units were set up in 1977 and 1987 respectively. During its heyday, it employed about 3,000 permanent employees along with many others on a temporary basis. However, as of March 2022, this number has reduced to 416 only. With the expiration of the effective life, the first two production units were shut down with the third unit is presently bearing the entire burden of production.
Although the Namrup-III is presently producing 800 metric tonnes of urea per day with a production capacity of 80 per cent, it has been facing mechanical and technical snags from time to time. Prior to its shutdown on January 6, 2020, the Namrup-II was producing an additional 300 metric tonnes of urea per day; totaling 1100 metric tonnes per day production.
Bucket full of empty promises
“The Brahmaputra Valley Fertilizer Limited will remain just as a golden coin for the political leaders,” opines the industry union, the local people, and organizations.
Reports state that in 2006, the then Union minister of chemicals and fertilizers, Ram Vilas Paswan announced the establishment of a fourth unit after observing the deteriorating conditions of the second and third units of the plant. In 2015, the central government adopted a proposal to set up ammonia urea complexes to meet the demand for fertilizers in Bihar, Rajasthan, Jharkhand, Nepal, and Bhutan in addition to the Northeast states, but unfortunately it has remained a futile promise ever since for BVFCL.
In 2019, the Union ministry informed in a press release about the government’s proposal to set up a new ammonia-urea plant at BVFCL, the Namrup-IV with a capacity of 12.70 lakh MT or urea through nomination (PSU) route. In September of the same year, the then Union minister, DV Sadananda Gowda, visited BVFCL and promised to start construction by December 2019 and complete it within three years.
The cabinet committee on economic affairs, on February 2021, accorded approval to the proposal of the department of fertilizers for a grant-in-aid of Rs 100 crore to BVFCL to sustain operations and restore the urea production capacity to 3.90 lakh MT per annum.
In September 2022, chief minister of Assam, Himanta Biswa Sarma, assured the various workers’ unions of BVFCL that Oil India Limited will be asked to increase its percentage of capital investment in the company. Additionally, the state government will also increase its investment to 26 per cent instead of the earlier 11 per cent in BVFCL and arrange for the establishment of the fourth unit.
Time and again, concerned officials and ministers have promised to start construction of the Namrup-IV, following proposals of the Centre, but without any visible result. Reportedly, the company is presently generating just enough revenue to pay the salaries of its employees.
RTI response suggests Namrup-IV as a distant dream
In response to RTI applications, No-BVFCL/R/E/22/0013 of June 2022 and BVFCL/RTI/22/40 of October 2022, seeking information on the status of the Namrup-IV unit, the Brahmaputra Valley Fertilizer Corporation Limited stated: “The fourth unit is planned to be established by a joint venture company, which is yet to be formed and the participant for the JV company is yet to be decided. The proposal is under the consideration of Govt. of India and the department of fertilizers.”
Reportedly, surveys have been conducted to set up the fourth unit of the industry at a cost of Rs 20-25 lakh.
Shiv Prasad Mohanty, chairman and managing director (CMD) of BVFCL, speaking to this journalist said: “The Centre had accorded Cabinet approval for financial restructuring and setting-up of the Namrup-IV on May 21, 2015. The project was to be established in PPP mode by forming a joint venture company, in which 48 per equity was allocated to the state government and other central public sector enterprises (CPSEs), and the remaining 52 per cent equity was to be allocated to a private/govt. party through bidding. The approval could not be implemented so far as no response has been received from any investor.”
Responding to a question about the revival of Namrup-II, he said: “The revival of the second unit will cost around 500 to 600 crores. The cost of production of urea in this plant is double that of Namrup-III. Hence its revival is not deemed feasible.”
CM Sarma exuded optimism following a meeting with Union finance minister Nirmala Sitharaman along with other senior officials of the ministry of finance, chemicals and fertilizers and petroleum and natural gas on January 25, 2023. The meeting decided to study various aspects regarding the fourth unit of the BVFCL, such as the availability of gas and other technical matters, and to sit for another round of discussion after a month.
“We are hoping for positive news. Following the Cabinet’s approval, it will take about 4 to 5 years for full commissioning of the Namrup-IV unit, as is usually the time taken,” said Mohanty.
BVFCL not limited to urea production
CMD of BVFCL, Shiv Prasad Mohanty, said: “We are not dependent on the production of just urea now. New trading items like seed, pesticides, mukta power, mukta gold-NPK19:19:19 (WSP), ammonium sulphate, factomphos, HIL net, etc., have been introduced. We are looking forward to being a significant producer of nitrogenous fertilizer in an efficient, economical, and environment-friendly manner and providing a package of agricultural services pan India.”
The company has taken initiatives for product diversification and expansion of its business network. A 3000 MT per annum water soluble NPK (nitrogen, phosphorus, and potassium) production facility will commence production shortly, which is being established by utilizing in-house expertise and funding.
“A power purchase agreement is expected to be signed shortly to install a solar power system to generate solar power of 2.80 MW, to establish a 400 MT per day capacity single super phosphate and granular SSP plant within the plant premises. Urgent steps have been initiated to receive all permissions and make arrangements for uploading surplus captive power to the state/national grid to have a financial benefit for the company,” said Mohanty.
The official informed that there has been an expansion of the production of liquid bio fertilizer plant from the earlier 510 liters per day to 1200 liters per day from January 2023. Additionally, BVFCL is strengthening its dealers’ network in the states of Odisha, Chhattisgarh, Jharkhand, Uttar Pradesh, Madhya Pradesh, Andhra Pradesh, Telangana, parts of West Bengal, Bihar. As such, the company is seeking the allotment of the Paradip Port in Odisha for the import and marketing of imported urea and distribution thereof into the various states.
“Compared to the last financial year of 2021-22 when BVFCL produced 1,36,000 tonnes of urea, in the current fiscal till January 2023, the Namrup-III has produced 1,86,000 tonnes; an additional 50,000 tonnes,” Mohanty concluded.