Exploring market potential of ammonia absorption refrigeration plant in fertilizer industry

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

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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.

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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 MONI A VAPOUR
COOLI NG W ATER
BRI NE
STEAM
CONDENSATE
RI CH SOLUTI ON
LI QUID AMM ONI A
Ammonia
Desorber
Steam/ heat
Rectification
Column
Ammonia
Condenser
Liquid
Ammonia
Receiver
Sub-cooler
Ammonia Evaporator/
Brine chiller
Ammonia
Absorber
Solution heat
exchanger
Solution
Pump
Liquid
Ammonia bleed
Liquid
Ammonia
Reflux
HE5
HE4 Poor / Weak
Solution
Strong Solution
HE3
HE7
Cooling
Water
HE8
HE2
Liquid Ammonia
( V )
Vapor
Ammonia
Cooling
Water
Bleed Heat
Exchanger
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 -300
C. 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 -300
C up to -600
C.
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

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Sr.
No
Plant
Sr.
No
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

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Sr.
No
Plant
Sr.
No
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. (f900
C) (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.

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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
0
2
4
6
8
10
12
Absorption
refrigeration
Compression
Refrigeration
Steam jet
refrigeration
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 using
12%
Highly Intrested
41%Somewhat
intrested
18%
Not intrested
29%
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

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Exploring market potential of ammonia absorption refrigeration plant in fertilizer industry

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