Kraft Paper Project Report

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Techno Economic Viability Study M/s. Palamoor Fertilisers Pvt .Ltd.

CHAPTERS

Particulars Page. No

Executive Summary 1

1 Introduction 4

2 Promoters and Management 6

3 Market Scenario 9

4 Manufacturing Process 26

5 Site Particulars 30

6 Schedule of Implementation and Statutor !learances 31

" Pro#ect !ost and Means of $inance 33

% Profita&ilit 'ssumptions and Pro#ect (conomics 42

9 S)ot 'nalsis 51

10 !onclusion 52

ANNEXURES

1 Pro#ect !ost and Means of $inance

2 *e+enue Pro#ections

3 !ost Pro#ections ,,, *a) Materials- Packaging- Po)er- !oal

4 Manpo)er *e.uirements

5 Preliminar / Pre,operati+e epenses

6 Pro#ected Profita&ilit Statement

" epreciation

% Interest / *epament Schedule

9 Pro#ected orking !apital *e.uirement

10 Pro#ected alance,Sheet

11 Pro#ected $unds $lo) Statement

12 reak,(+en 'nalsis

13 e&t Ser+ice !o+erage *atio

14 Internal *ate of *eturn

15 e $inancial Indicators

16 Securit Margin

1" !M' ata

APPENDIX

01 and etails

02 !i+il / uilding orks

03 Plant / Machiner

04 (lectrical (.uipment

05 Misc $ied 'ssets

06 7echnical Specifications of (lectricals

i




ii




EXECUTIE SU!!AR"

Name o# com$a%y Palamoor&ertilisers Private 'imite(

Registere( )##ice

a%( Cor$orate)##ice

$lat 202- 8ueens !ourt 'partment- Street,19- imaat :agar-

dera&ad 500029

Promoters* Names+ ,ac-grou%(age/ 0uali#icatio%/ex$erie%ce

Shri ; *a#endra Prasad

Shri ; *a#shekar

Shri !handra Shekar <uloori

Shri Srini+asulu <uloori

Particulars o#Pro2ectPro(uct/ i%stalle(ca$acity

Manufacture of :P fertili=ers 4007P

Pro2ect sitelocatio% a%( area

S :o "6- :elapatla >illage - !houtupal Mandal- :algonda

istrict

7otal etent of area 409 acres

Pro2ectCost3!ea%s o#&i%a%ce

Particulars Amou%t i%Rs 'a-4

C)ST )& PR)5ECT

and and and e+elopment 1500uildings / !i+il orks %6000

Plant / Machiner 56500a& (.uipment 500Misc $ied 'ssets 1400!ontingenc ? 5@ "200eposits 3000Preliminar (penses 1600Pre,operati+e epenses 10100orking !apital Margin 15300Total 1671.88

!EANS )& &INANCE

(.uit !apital "3100ank 7erm oan

110000T)TA' 1671.88

e&t (.uit *atio 150 A 1

3




&i%a%cial Ratios

Term loa%Re$ayme%t a%(rate o# i%terest

7erm loan is repaa&le o+er a period of 6 ears si months )ith a

moratorium period of 6 months from the date of commercial

operation Bthe door,to,door repament period is " ears 3 monthsC

7he rate of interest on term loan and on )orking capital is 1500@

per annum

Ca$acityutili9atio%

!ommencing from 60@ in the first ear it is pro#ected to increase

& 5@ e+er ear and sta&ili=ing at %0@ till the end of the de&t

tenureRa: !aterialAvaila;ility

01 7he main sources for the a+aila&ilit of ra) materials are

manufacturers of fertili=ers like :agar#una $ertili=ers and

!hemicals- !oromandal $ertili=ers- eepak $ertili=ers- Indo,Dulf

$ertili=ers / !hemicals- $ertili=ers / !hemicals 7ra+ancore-

*ashtria !hemicals / $ertili=ers- *I!E- II$!E- Du#arat$ertili=ers etc

02 $ertili=ers are also a+aila&le through dealers

03 Imports of fertili=ers are also permitted

!ar-eti%garra%geme%ts

:P fertili=ers ha+e a read market and are proposed to &e sold

through fertili=er dealers

4

Dross '+erage S!* 1%0

:et '+erage S!* 21%

I** for the pro#ect 2403@

(P,Eperating !apacit

B3rd r of operationC

59@




CHAPTER < 1INTR)DUCTI)N

1.1 ,ac-grou%(

Palamoor$ertilisers Pri+ate imited Bhenceforth referred to as Palamoor$ertilisersC is

incorporated as a pri+ate limited compan under the !ompanies 'ct- 1956 B:o1 of

1956C +ide !I: ;24233'P2011P7!0"4520 )ith its registered and corporate office at

$lat 202- 8ueens !ourt 'partment- Street,19- imaat :agar- dera&ad 500029

7he compan has &een promoted & Shri ; *a#endra Prasad- Shri ; *a#shekar-

Shri !handra Shekar <uloori and Shri Srini+asulu <uloori 'll the promoters ha+e a rich

eperience as dealers of fertili=ers- Seeds / Medicine in dera&ad and

Meha&oo&nagar dist

1.= Com$a%y*s Pro2ect

7he companFs pro#ect is for manufacture of :P fertili=ers )ith 4007P capacit 7he

pro#ect site is on 409 acres of land located at S :o "6- :elapatla >illage- !houtupal

Mandal- :algonda istrict 7he sale deed has &een registered on 11 th <ul 2011 for

*s 3%5 lakh 7he total &uilt,up area for the proposed pro#ect )ill &e "433 s.meters

7he pro#ect cost has &een estimated as *s 1%31 lakh 7he pro#ect is proposed to &e

funded )ith ank 7erm oan of *s 1100 lakh and e.uit component of *s"31 lakh

7he de&t e.uit ratio )orks out to 150A1

7he term loan of *s 1100 lakh is repaa&le o+er a period of si ears and si months

)ith si months moratorium from the month of commercial operation 7he door,to,door

repament period is se+en ears 3 months 7he returns are ade.uate to repa the term

loan )ithin the stipulated period- the a+erage gross S!* for the pro#ect &eing 1%0

1.7 >e%esis

7he compan has approached a &ank for o&taining a term loan to fund the de&t

component of the pro#ect En the ad+ice of the &ank- the compan has approached

'PI7!E to conduct a 7echno (conomic >ia&ilit stud of the pro#ect and su&mit the

findings

5




1.? !et4o(ology

7he follo)ing methodolog )as adopted & 'pitco for preparation of the stud report G

• etailed desk research on the fertili=er industr )ith special reference to its

gro)th prospects

• Inter+ie) of the ke promoter

• Scrutini=ing .uotations for plant and machiner

• >erifing the cost estimates of the ci+il )orks )ith reference to the &uilding

plan and E8s Bill of 8uantitiesC

• >alidation of costs Bfied and +aria&leC and re+enues

• >erification of the credentials of the supplier of the principal machineries

• Scrutin of the follo)ing papers relating to the pro#ect A

aC !ertificate of incorporation of compan dated 16th Ma 2011

&C and registration document 11th <ul 2011

7he promotersF &ackground and the technical support re.uired for successful

implementation and running of the pro#ect )as also taken into account

7hrough the a&o+e methodologies the techno,economic +ia&ilit stud report of MHs

Palamoor$ertilisers Pri+ate imited has &een finali=ed and the findings are su&mitted for

facilitating funding decision & the &ank

6




CHAPTER < =PR)!)TERS AND !ANA>E!ENT

=.1 T4e -ey $romoters o# t4e com$a%y are

iC Shri ; *a#endra Prasad

iiC Shri ; *a#shekar

iiiC Shri !handra Shekar <uloori

i+C Shri Srini+asulu <uloori

Pro#ile o# t4e Directors

a S4ri U Ra2e%(ra Prasa(

e has 20 ears of eperience in the $ertili=ers and seeds marketing and distri&utionetc

'geA 55ears

8ualificationA com

:et)orthA1000 akhs

'ssociated !ompaniesA Danesh 'gro Products

; S4ri U Ra2s4e-ar e has 10 ears of eperience in the $ertili=ers and seeds marketing and distri&ution

etc and he is a partner in Durudatta e+elopers

'geA 40 ears

8ualificationA'

:et)orthA 300 akhs

'ssociated !ompaniesA rinda+an (nterprises- Durudatta e+elopers

c S4ri Sri%ivas 5uloorie has 15 ears of eperience in the Medical ealerships

'geA 41 ears

8ualificationA'

:et)orthA100 akhs

'ssociated !ompaniesA Sai eep Medicals- *a#ara#es)ari Medicals

( S4ri C4a%(ra Se-4ar 5uloori

e has 14 ears of eperience in the $ertili=ers and seeds marketing and distri&ution

7




etc

'geA 36 ears

8ualificationA Mcom

:et)orthA 100 akhs

'ssociated !ompaniesA Manish agro 'gencies

=.8= Tec4%ical Co%sulta%t

P$P has 'ppointed Mr P Mohan as the technical consultant for the pro#ect

• M7ech B!hemical *eaction (ngineeringC

Indian Institute od 7echnolog BII7C- !hennai 19"", 19"9

• 7ech Bchemical (ngineeringC

;ni+ersit of :agpur 19"2,19""

Mr P Mohan is took +oluntar retirement from MHS :i=am Sugars td >eteran in

Eperations management- Pro#ect Management- (nerg Management / conser+ation-

(fficienc 7argeting- 8ualit !ontrol and 'dministration )ith more than 30 ears of

eperience in the field of sugar- distilleries- consultanc- pollution control- chemical

e.uipment deign etc proficient in the plant and machiner selection and procurement

•

esigned and commissioned a sol+ent distillation column sstem Batmospheric+acuumC for MHs akshmi Saras)athi Erganics td Miapur

• esigned and commissioned B2C 7)o Multi effect e+aporation sstems for

pharmaceutical effluent treatment at MHs SS Erganics td 'nd MHs Pra&ha+a

Erganics pri+ate td

• Moderni=ed an old molasses &ased distiller to produce etra neutral 'lcohol for

MHs irlampudi sugar Mills td- Pithapuram

• !on+erted a &atch fermentation process to continuous at MHs S> istilleries

td- idar

• Impro+ed the efficienc of a distiller & re,designing and modifing the anal=er

column Btunnel cap designC internals at MHs *a+indra istilleries td- idar

• esigned and commissioned an ammonia a&ortion sstem for MHs r *edd

a&s

• (ecution of erection )ork of a ne) 50 P (thanol distilleries on &ehalf of

MHs <P Mukher#ee ? 'ssociates- Pune

8




• 'd+isor and consultant for a ne) 100 P (thanol distilleries on &ehalf of

Sudanese sugar compan- hartoum on &ehalf of MHs <P Mukher#ee ?

'ssociates- Pune

7he appointment of the consultant for the pro#ect )ill add to the technical strength of the

compan and ensure proper eecution and functioning of the pro#ect

@ey Sta##

!r. C. Su;rama%yam Pla%t a%( !ac4i%ery Perso%%el

Mr ! Su&ramanam ser+ed in +arious capacities from the ranks in $ertili=er

!orporation of India e ser+ed in *amagundam plant &efore opting for >oluntar

retirement in the ear 2002 e has (perience in control operations of ammonia

reactors for the production of urea- Since than he has &een acti+el engaged in ad+isor

and consultanc roles in technical matters of industr in general is rich eperience in

operations is an asset to the compan

=.? Promoters* Stre%gt43!a%ageme%t Ris-

7he promoters ha+e rich ears of eperience in $ertili=ers and seeds marketing and

distri&ution etc )hich )ould help them in running the unit successfull 7he promoterFs

core understanding of the fertili=er market is primar ad+antage of this proposal

9




CHAPTER < 7!AR@ET SCENARI)

7.81 I%tro(uctio%

&ertili9ers are su&stances that suppl plant nutrients or amend soil fertilit 7he are

the most effecti+e B30 ,%0 per cent increase in ieldsC means of increasing crop

production and of impro+ing the .ualit of food and fodder $ertili=ers are used in order

to supplement nutrient suppl in the soil- especiall to correct ield,limiting factors

$ertili=ers are applied to promote plant gro)thJ the main nutrients present in fertili=er are

nitrogen- phosphorus and potassium Bthe KmacronutrientsFC ie N<P<@ and other

nutrients BLmicronutrientsFC in smaller amounts $ertili=ers are usuall directl applied to

soil and can also &e spraed on lea+es as foliar feeding

'mmonia is the main source of nitrogen ;rea is the main product for making nitrogen

a+aila&le to plant Phosphorus is made a+aila&le in the form of super phosphate and di,

ammonium phosphate Muriate of Potash BPotassium !hlorideC is used for suppl of

potassium

Macronutrient fertili=ers are la&eled )ith an :P analsis $ertili=er is descri&ed & a

three num&er designatorJ for eample- 20,20,10 7hese num&ers are percentages of

three elementsA nitrogen- phosphorus- and potassium- respecti+el 7herefore- 20,20,10

fertili=er contains 20@ nitrogen- 20@ phosphorus- and 10@ potassium & )eight

7.8= Pro$erties o# &ertili9er !acro<%utrie%ts

a NITR)>EN It is an essential element of chlorophll- the green chemical that ena&les

plants to manufacture starches and sugar Man of the compounds in plants,amino

acids- aromatic compounds etc must ha+e nitrogen It is the green element forcing soft-

lush gro)th )hen used in ecess :itrogen seems to ha+e the .uickest and most

pronounced effect in plant gro)th

; PH)SPH)RUS Phosphorus is an essential constituent of e+er li+ing cell Plants

cannot sur+i+e )ithout phosphorus 7he must ha+e a stead suppl to complete

health gro)th Phosphorus impro+es crop .ualit and ield and also protects plant

against diseases It helps o+ercome the effects of cold climate temperatures- drought

and the en+ironmental stresses

10




c P)TASSIU! 'nnual applications of potash in solu&le form are essential- particularl

if root crops are &eing gro)n It is an important catalst in photosnthesis- is essential

for starch formation and the mo+ement of sugars in the plant and is important for seed

formation It helps to form stiff stems and is essential in formation of tu&ers / roots It is

+ital element in protein snthesis and in the utili=ation of nitrogen & plants It &uilds

strong- health stalks and retards crop disease ithout potassium- crops do not ha+e

the strength to &ear hea+ )inds- rains or e+en their o)n fruits hen fertili=ers are

used- the crops are not onl phsicall stronger &ut the mature faster 7his makes

potassium a +ital nutrient for plants o)e+er- potassium is not effecti+e )ithout its co,

nutrients nitrogen and phosphorus

7.87 Categories o# #ertili9ers

a Straig4t &ertili9ers suppl single nutrient either :itrogenB:C or PhosphorusBPC or

PotassiumBC (g ;rea supplies 46@ :- Super phosphate pro+ides "@ P or 16@

P2E5

; Com$lex #ertili9ers suppl more than one plant nutrient (gA i,ammonium

PhosphateB'PC contains 1%@ : / 20@ PB46@ P2E5C

I$$!E is the leading plaer for comple fertili=er along )ith !oromandel International

td It produces 10A26A26 / 12A32A16 complees

c !ixe( #ertili9ers are phsical mitures of t)o or more straight orHand comple

fertili=ers to suppl particular com&ination of plant nutrients (g Ene can &u 'P and

muriate of potash BMEPC and mi them in a ratio to get a fertili=er miture containing a

grade of 12A32A16 of :- P2E5 / 2E

A(va%tages o# !ixe( &ertili9ers

1 7here )ill &e considera&le sa+ings in time and la&our in application to the crops-

as all the nutrients re.uired are present in the same packing

2 Ene can ensure &alanced nutrient application if suita&le miture is chosen

3 Micro,nutrients can also &e included in the mitures

11




7.8? >lo;al &ertili9er !ar-et

uring the recession period- )orld fertili=er consumption declined & "@ in 200%,09- to

156" million metric tones BMM7C nutrients : fertili=ers )ere much less affected B,1%@C

than P and fertili=ers B,11 and ,20@- respecti+elC rops in consumption )ere

registered in all the regions ecept South 'sia- (astern (urope- !entral 'sia and 'frica

ith the progressi+e economic reco+er- )orld fertili=er demand &egan to pick up in

2009,10 It has sho)n gro)th & 3"@ in this period- to 1625 Mt- )ith increases of

31@ and %%@ for : and P fertili=ers respecti+el and 12@ decline for fertili=ers

orld demand in 2010,11 )as forecast to increase & 4%@ to 1"04 Mt

>lo;al &ertili9er Co%sum$tio% I% !!T Nutrie%ts

"ear N P @ Total

=88B<86 1012 3%4 2%9 16%5=886<8 993 342 232 156"

=88<18 1024 3"2 229 1625=818<11

$ro2ecte(

1044 3%9 2"1 1"04

>lo;al &ertili9er Su$$ly

orld fertili=er suppl is epected to increase & some 30 million tonnes representing

an annual gro)th rate of 3@ orld nitrogen suppl is forecast to rise & 231 million

tonnes & 2011,12 compared to 200%,09 (ast 'sia- South 'sia- :orth 'merica and(urope are the largest producers of nitrogen

orld phosphate fertili=er suppl is forecast to increase & 63 million tonnes & 2011,

12 at a gro)th rate of 32@ per annum 'reas )ith the largest production are (ast 'sia-

:orth 'merica and 'frica

7he suppl forecast for potash is that it )ill increase & 49 million tonnes to 432 million

tonnes during the ear 2011,12 at an annual gro)th rate of 24@ per annum 7he mainproducing areas )ill &e :orth 'merica and est (urope

T)P )R'D &ERTI'IER I!P)RTERS + EXP)RTERS

12




T)P )R'D &ERTI'IER I!P)RTERS

T)P )R'D NITR)>EN &ERTI'IER I!P)RTERS

13




T)P )R'D PH)SPH)RUS &ERTI'IER I!P)RTERS

T)P )R'D P)TASH &ERTI'IER I!P)RTERS

14




T)P )R'D &ERTI'IER EXP)RTERS

T)P )R'D NITR)>EN &ERTI'IER EXP)RTERS

15




T)P )R'D PH)SPH)RUS &ERTI'IER EXP)RTERS

T)P )R'D P)TASH &ERTI'IER EXP)RTERS

16




7.8F I%(ia% !ar-et )vervie:

India is the 3rd largest fertili=er producer in the )orld In India chemical fertili=ers plaed

a significant role for the success in the agriculture sector- not onl in terms of meeting

total re.uirement of food grains &ut also generating eporta&le surpluses

eeping in +ie) the +ital role plaed & chemical fertili=ers in the success of IndiaFs

green re+olution and conse.uent self,reliance in food,grain production- the Do+ernment

of India has &een consistentl pursuing policies conduci+e to increased a+aila&ilit and

consumption of fertili=ers in the countr 's a result- the annual consumption of

fertili=ers in nutrient terms B:- P / C- has increased from 0" lakh M7 in 1951,52 to

225"0 lakh M7 in 200",0%- )hile per hectare consumption of fertili=ers- )hich )as less

than 1 g in 1951,52 has risen to the le+el of 11651 g BestimatedC in 200",0%

7hough su&stantial indigenous capacit has &een de+eloped in respect of nitrogenous

and phosphatic fertili=ers- the countr continues to rel on imports for meeting its

domestic re.uirements $urther- the ra) materials and intermediates for the same are

also largel imported

7.8G >ro:t4 History

7he industr made a +er hum&le &eginning in 1906- )hen the first manufacturing unit

of Single Super Phosphate BSSPC )as set up in *anipet near !hennai )ith an annual

capacit of 6000 M7 7he $ertili=er / !hemicals 7ra+ancore of India td B$'!7C at

!ochin in erala and the $ertili=ers !orporation of India B$!IC in Sindri in ihar B no)

<harkhandC )ere the first large si=ed , fertili=er plants set up in the forties and fifties )ith

a +ie) to esta&lishing an industrial &ase to achie+e self,sufficienc in food,grains

Su&se.uentl- green re+olution in the late sities ga+e an impetus to the gro)th of

fertili=er industr in India and the se+enties and eighties then )itnessed a significant

addition to the fertili=er production capacit

Presentl- there are 56 large si=e fertili=er plants in the countr manufacturing a )ide

range of nitrogenous- phosphatic and comple fertili=ers Eut of these- 30 units produce

urea- 21 units produce 'P and comple fertili=ers- 5 units produce lo) analsis

straight nitrogenous fertili=ers :ine companies manufacture ammonium sulphate as &,

product esides- there are a&out "2 medium and small,scale units in operation

17




producing SSP 7he total installed capacit of fertili=er production )hich )as 11960

lakh M7 of nitrogen and 5360 lakh M7 of phosphate as on 31032004 has marginall

increased to12061 lakh M7 of nitrogen and 5659 lakh M7 of phosphate as on

31032009

7.8B Pro(uctio% Ca$acity a%( Ca$acity Utili9atio%

Production of :itrogen / Phosphate is gi+en in the ta&le &elo)A

Ta;le 7.8B.1

&ig. i% la-4 !T

=88B< 86 =886<8 =88<18 >ro:t4 Rate

:itrogen 10900 10%"0 1196% 9@Phosphate 3%0" 3465 4352 20@

7here )as decline in the gro)th rate during 200%,09 in the production performance of

nitrogen and phosphatic fertili=ers due to constraints in suppl and .ualit of natural

gas- e.uipment &reakdo)ns and unscheduled shutdo)n of the production units In case

of phosphate- production in 'P plants )as lo) on account of shortage of imported

phosphoric acid and ammonia ut during the ear 2009,10 the gro)th rate of

production performance of nitrogen and phosphatic fertili=ers increased & 9@ and 20@

respecti+el

7he domestic fertili=er industr has attained the le+els of capacit utili=ation compara&le

)ith others in the )orld

!apacit ;tili=ation of :itrogen / Phosphate is gi+en in the ta&le &elo)A

Ta;le 7.8B.=

=88B< 86 =886<8 =88<18

:itrogen 904@ 901@ 992@

Phosphate 6"3@ 612@ "69@

;rea Plants 100%@ 1011@ :'

's for phosphate fertili=ers- apart from the constraints mentioned earlier- the

actual production capacit utili=ation has also &een influenced & the demand trends

18




7.86 &ertili9er Co%sum$tio%/ Pro(uctio% a%( Im$orts

orld o+er- the agriculture sector en#os su&stantial su&sidies in the form of producer

support- general ser+ices support and consumer support 'gricultural su&sidies in India

are among the lo)est glo&all $urther the input su&sidies Bof )hich fertili=er su&sidies

are a partC form less than 10@ of the +alue of agricultural production 7he ma#or

demand determinants of fertili=er demand are input prices- output prices- area under

> seeds- area under irrigation- a+aila&ilit of credit and farm si=e distri&ution In fact

the fertili=er consumption per hectare BhaC is often considered a pro for the le+el of

moderni=ation of agriculture ' higher le+el of moderni=ation signifies assured irrigation-

use of > seeds and emploment of modern practices such as use of fertili=ers-

pesticides and farm machiner 7he adoption of ne) technolog- mainl the > seeds

re.uires intensi+e use of fertili=ers and pesticides under ade.uate and assured )ater

suppl ecause of the nature of cropping pattern and applica&ilit of fertili=ers on

different crops- usages of fertili=ers are higher in the '*I$ season 'round "6@

farmer households use fertili=ers during the '*I$ season compared )ith 54@ during

the *a&i season ;se of fertili=ers is more common in '*I$ than in *'I for all ma#or

States ecept ihar- Pun#a& arana- and ;ttar Pradesh

7he details of Production- !onsumption and Imports of :- P and are gi+en in the

ta&les &elo)A

Ta;le 7.86.1

Co%sum$tio% i% 'a-4 !T

"ear

Co%sum$tio%

N P @ Total

2005,06 12"23 5204 2413 2034

2006,0" 13""4 5543 2334 21651

200",0% 14419 5515 2636 225"

200%,09 1509 6506 3313 24909

2009,10 15390 66%0 2965 25035

19




Ta;le 7.86.= Pro(uctio% i% 'a-4 !T

"ear

Pro(uctio%

N P @ Total2005,06 11354 4221 0 155"5

2006,0" 115"% 451" 0 16095200",0% 109 3%0" 0 14"0"

200%,09 10%" 3464 0 14334

2009,10 1196% 4352 0 16320

Ta;le 7.86.7 Im$ort i% 'a-4 !T

"ear

Im$orts

N P @ Total2005,06 13%5 1121 2"4" 5253

2006,0" 26%% 1323 2069 60%

200",0% 36"" 1253 2653 "5%3

200%,09 3%44 292" 33% 10151

2009,10 30%5 2499 2529 %123

In the ta&le &elo) the consumption of :P mi fertili=ers is compared )ith all grades

of fertili=ers in the southern =one of India as per the current distri&ution trendA

Ta;le 7.86.?

NP@ !ix &ertili9ers Co%sum$tio% com$are( to all gra(es o# #ertili9ers.

&ertili9ers A%(4ra Pra(es4 Sout4er% o%e o# I%(ia

:P Drade BK000 M7C 12"965 2439%6

'll Drades BK000 M7C 514929 1064111

!omposition of :P mi

>is,a,+is all grades 24%5@ 2293@

Im$orts

It can &e o&ser+ed from the a&o+e ta&les that Import contri&ution in fertili=er

consumption has increased from 26@ to 41@ during the 4 ears 2005,06 to 200%,09

and during 2009,10 it decreased to 35@ uring 200%,09 onl 5"5@ of the

consumption )as met & indigenous production &ut during 2009,10- 65@ of the

consumption )as met & indigenous production

MEP BMuriate of potashC is not manufactured )ithin the countr 7here are no kno)n

natural potash deposits in the countr ence 100@ of its re.uirement is imported

Denerall- 30@ of the urea re.uirement and 30,40@ of the 'P re.uirement of the

20




countr are met through imports ;rea Imports on Do+ernment account are made to

&ridge the gap &et)een the indigenous a+aila&ilit and re.uirement through designated

canali=ing agencies like MM7! td- State 7rading !orporation BS7!C and Indian

Potash td BIPC 'P / MEP are permitted to &e imported under Epen Deneral

icense BEDC & &oth pri+ate and pu&lic sector companies 7his permission is gi+en &

E$

Im$orta%t Im$orters I% =811 Indian Potash td- I$$!E- uari Industries- Mangalore

!hemicals / $ertili=ers- *ashtria !hemicals / $ertili=ers and :agar#una $ertili=ers etc

It is o&ser+ed that around 25@ and 23@ of the fertili=ers consumed in 'ndhra Pradesh

and Southern one of India respecti+el are :P Mi fertili=ers

7.8 Co%sum$tio% at State 'evel

'ndhra Pradesh is the second largest fertili=er consuming state in countr- net to ;ttar

Pradesh 7he consumption of total fertili=er nutrients recorded a sharp increase of

241@ from 19% akh M7 during 2004,05 to 246 akh M7 during 2005,06 'll the three

nutrients recorded positi+e gro)th consumption during &oth the seasons ecept 2E-

)hich recorded negati+e gro)th during the harif season 7he consumption of :- P 2E5

and 2E at 14%0- 064% and 0340 M7 recorded increase of 2"9@- 202@ and 164@respecti+el during 2005,06 o+er 2004,05 :P use ratio changed marginall from

40A1%A1 during 2004,05 to 43A19A1 during 2005,06 harifA *a&i share in total

consumption continued to remain unchanged at 4%A52 during 2005,06 Per hectare

consumption of total fertili=er nutrients increased from 155% kg during 2004,05 to 1935

kg during 2005,06

7he under noted ta&le depicts the suppl of :P mi fertili=ers in 'ndhra Pradesh

during 200%,09

21




Ta;le 7.8.1 Su$$ly (uri%g A$ril 86 to Se$ 86 i% A%(4ra Pra(es4 @4ari#

Sr.No. !a%u#acturer NP@ !ixture

I% !Ts1 <aa ami fertili=ers- 7anuku 10"35

2 I!,:ida+ole- D ist 105"43 !hemtech- Medak 10%""

4 P* $ertili=ers P- (D ist 16200

5 haskara $ertili=ers- 'nantapur 16"%5

6 othari- urnool- !hittoor- >i#aa)ada 6543

" ala#i 'gri !hemicals- 'doni 2060

% ala#i $ertili=ers- adapa 4246%

Total 11G=?7

Ta;le 7.8.= Su$$ly (uri%g )cto;er 86 to !arc4 8 i% A%(4ra Pra(es4 Ra;i seaso%C

Sr.No. !a%u#acturer

NP@ !ixture I%

!Ts

1 <aa ami fertili=ers- 7anuku 10423

2 I!,:ida+ole- D ist %966

3 !hemtech- Medak "669

4 P* $ertili=ers P- (D ist 3"9365 haskara $ertili=ers- 'nantapur 12432

6 othari- urnool- !hittoor- >i#aa)ada 4519" ala#i 'gri !hemicals- 'doni 14"1

% ala#i $ertili=ers- adapa 23%629 aritha $ertili=ers- eesara 1""31

Total 1=F88

22




Tre%(

7he total production of :P mi fertili=ers during 200%,09 in 'ndhra Pradesh stands at

241 akh M7

7.18 Co%sum$tio% i% Sout4er% I%(ia

7he state )ise consumption of :- P and nutrients in Southern =one of India is

ta&ulated &elo) 7he consumption of these nutrients increases from 2006 to 20097hus-

the ta&le &elo) tells the state )ise consumption for the last three ears

Ta;le 7.18.1 State ise co%sum$tio% o# &ertili9ers (uri%g last t4ree years

888 !T

Sr. No. State =88G<8B =88B<86 =886<8

1 'ndhra Pradesh 24%406 266"5% 30"0%6

2 arnataka 14%5%3 150"36 1%31%9

3 erala 20%92 20%30 26090

4 7amil :adu 112496 10"565 126522

5 Pondicherr 4414 3"1" 2"9%

6 ' / : Island 061 0%" 055

T)TA' F7?6.F= F?G.7 G?FB.?

Tre%(

't 5"5@ capti+e production the production in southern =one )ould &e 3"13 akh M7

B5"5@ of 645" lakh M7C-

and at 23@ as :P fertili=ers the production in southern =one )ould &e %31 akhs M7

B23@ of 3"13 lakh M7C

23




7.11 Dema%( &orecast

's per the pro#ections made & fertili=ers association of India B$'IC the demand for

fertili=er nutrients in southern =one of India is ta&ulated &elo) 't 23@ :P mi the

demand for :P fertili=ers & 2011,12 )ill &e 154" akhs M7

Ta;le 7.11 Dema%( #or #ertili9ers i% Sout4er% o%e 888 !T

"ear N P @ T)TA'

2010,11 3392 1""3 1312 64""

2011,12 3490 1%52 13%6 6"2%

7.1= Dema%( Su$$ly >a$

's eplained- :P mi fertili=ers constitute 23@ of the fertili=ers consumption in

Southern one of India 'ssuming the same trend )ill follo) in the ears to come the

demand for :P mi fertili=ers )ill &e 154" akhs M7 B23@ of Pro#ected emandC &

2011,12 as against current production of %31 akhs M7 ence the Dema%( Su$$ly

ga$ of :P mi )ill &e around "15 akhs M7 in southern =one of India )hich is much

higher as compared to proposed Installed capacit of 12 akhs M7 &

Palamoor$ertili=ers

7.17!ar-et Dema%(

• Do+ernment emphasis in setting up of :P fertili=ers units

• o+erusing :itrogen fertili=ers like urea the soil is getting depleted Soil needs

&alanced use of :P fertili=er for getting higher ields for longer duration

• In 2010,11- sales of comple fertili=ers containing +arious properties of nitrogen-

phosphorus- potash and sulphur registered 20@ increase )hereas con+entional

fertili=ers such as ;rea and i,ammonium phosphate recorded lo)er gro)th

6"@ and 93@ respecti+el )hereas in the case of MEP it registered B,C16%@

gro)th 7he demand gro)th for miedHcomple fertili=ers has therefore &eenoutstripping the corresponding gro)th for straight fertili=ers

24




7.1? &i%a%cial Results o# some ma2or &ertili9er !a%u#acturers

Rs i% cr

=88B<86 =886<=88 =88<=818S' C)!PAN" NET

SA'ESNETPR)&IT

NETSA'ES

NETPR)&IT

NETSA'ES

NETPR)&IT

1 :agar#una$ertilisers /!hemicals-akinada

2-19359 2249 2-3"191 3241 1-9%"91 663"

2 !oromandalfertili=ers->ishakhapatnam

3-"99"% 209"6 9-53%91 4963% 6-4564% 46%20

3 eepak

$ertilisers-Maharastra

1-05214 1002" 1-414%1 14%"0 1-2%940 1"205

4 Indo,Dulf$ertili=ers /!hemicals!orporationimited ;ttarPradesh

10-2419" 2-04"5" 10-%""9% 1-64"96 %-23%05 2-09210

5 Mangalore!hemicals /$ertili=ersimited-

Panam&ur-Mangalore

1-62539 4046 2-46962 2%1" 2-0"565 5649

6 $ertilisers /!hemicals7ra+ancoreimited- !ochin

%"942 %9" 2-146%0 4295 2-0%13" ,103%

" *ashtria!hemicals /$ertilisers

5-15956 15%15 %-3"%24 2115% 5-65666 234%"

% *I!E 1-35%62 20920 1-51240 25013 1-53219 2693"9 Du#arat State

$ertilisers /

!hemicals

3-55591 23%45 5-%%46% 49936 4-01"63 2544"

25




7.1F >e%eral

Su;si(ies

N,S Sc4eme/ e##ective #rom 81.8?.=818

;nder :utrient ased Su&sid Scheme- su&sid is pro+ided on fertili=ers &ased on their

:- P- or S content 7his )as as against the earlier sstem- )here the su&sid )as

limited to the specific products B;rea- 'P- MEPC )ith no linkage to nutrient content

Su&sidies are gi+en & the Do+ernment of India onl to the manufacturers and importers

of straight fertili=ers B;rea- 'P- MEP- SSP- 7SPC and comple fertili=ers

Manufacturers of :P granulated mied fertili=ers are not entitled to su&sid since the

)ill &e sourcing su&sidi=ed fertili=ers from the manufacturersHimporters

Price

7he price of urea is fied & the Do+ernment of India 7he prices of other fertili=ers are

market determined- though the DEI eercises control in case of a&normal hike in the

prices

Usage

:P fertili=ers are mainl used for padd crops- chilies- +egeta&les and horticulture 7he

predominant use is in padd crops 7he categor of :P used )ill &e related to soil

condition and the crop gro)n

26




CHAPTER < ?!ANU&ACTURIN> PR)CESS

?.81 N.P.@. >ra%ulatio% Process i% ;rie#

7he process is kno)n as $ertili=er Miing and Dranulation Straight fertili=ers like ;rea-

i,'mmonium Phosphate- Single Super Phosphate- Mature of Potash containing

:itrogen- Phosphorous- Potash etc are thoroughl mied mechanicall in a pre,

determined ratio and granules are formed as the end product through the Dranulation

process

7he solid ra) materials like 'P- SSP- MEP- ;rea- $iller compounds like olomite-

!hina !la etc are proportioned B)eighedC and premied in a ou&le Paddle Mier and

fed to *otar Dranulator )here agglomeration is initiated In the Dranulator )ater is

added to pro+ide sufficient li.uid phase and plasticit to cause the dr ra) materials to

agglomerate further into product,si=e granules

ue to the tum&ling action in the *otar Dranulator- formulation of )et small granules

starts 'fter ensuring the re.uired si=e of granules & ad#usting )ater sprinkling in the

Dranulator- the )et granules are sent into the *otar rer 7he moist and plastic

granules are dried in a *otar rer & means of ot 'ir Denerator !ooling is

performed in a *otar !ooler that is +er similar to the *otar rer 7he o+ersi=e

materials are crushed and reccled to the Dranulator along )ith the undersi=e materials

7he product si=e fraction is sent for &agging 7he process air from +arious e.uipments

of the Plant is taken into de,dusting sstem and is +ented to atmosphere through Stack

B!himneC

?.8= Detaile( Descri$tio% o# t4e Process

7he Plant can &e di+ided into the follo)ing sectionsA

• *a) Material *ecei+ing Section

• *a) Material $eed Section

• Dranulation / Main Process Section

• $inished Product agging Section

• Pollution !ontrol Section

27




?.87 Ra: !aterial Receivi%g Sectio%

7he different ra) materials- namel- ;rea- MEP- 'P- SSP- 7SP and $illers like

Dpsum and !hina !la- recei+ed in &ulk or in &agged form- are stored in ra) material

storage area accessi&le for front pa loader or for manual feeding

Ra: !aterial &ee( Sectio%

7he ra) materials are )eighed in the )eigh &elt con+eors in the desired proportion and

then fed into the respecti+e $eed oppers B3 nos of capacit 5 M7 eachC using front

pa loader or & manual feeding 7he materials are then transferred to the *a) Material

$eed (le+ators B3 nosC using *a) Material $eed !on+eors B3 nosC 7he materials

from the (le+ators are fed into different oppers B6 nos of capacit 30 M7 eachCepending on the product &lend- these oppers are loaded for se+eral hours of

operation re.uirement $rom the oppers the materials are fed at the specified rate

through eigh $eeders B6 nosC to the !rusher through Mied *a) Material !on+eor

!rushed outlet material is fed to the ou&le Paddle Mier 7he Paddle Mier outlet

material is fed to Dranulator $eed (le+ator through Mier ischarge elt !on+eor 7he

Dranulator $eed (le+ator lifts the entire material to the Dranulator floor for further

processing

?.8? >ra%ulatio% a%( !ai% Process Sectio%

7he material at the outlet of Mier ischarge !on+eor is fed to the Dranulator through

a ucket (le+ator named Dranulator $eed (le+ator

7he Dranulator is a *otar rum Bsi=e 22 m dia "5 m longC designed to increase the

si=e of the incoming seed & adding laers during the rolling motion In the process

densification and roundness of the granules are achie+ed Sparger pipes are located in

the Dranulator for spraing )ater 7he proportion of )ater spra )ill &e ranging from 2@

to 12@ depending upon the grade of :P granular fertili=er to &e produced

$rom the Dranulator the material ha+ing appro 10@ moisture is dropped to the *otar

rer 7he rer is a *otar rum Bsi=e 22 m dia 16 m longC- )here the moisture is

e+aporated from the material through heat transfer )ith co,current hot air flo) ot 'ir

Denerator Balso called $urnaceC using fire)ood or agricultural refuse is used for

28




generating hot air of 10000m3 H hour of air up to 250 ! )hile inducing atmospheric air

into the Denerator 7he $urnace is a &o co+ered )ith a lining of high 'lumina &ricks

from inside

'ir is sucked & an induction fan ie rer $an through the *otar rer 7he flo) of

hot air and )et granules in the *otar rer are co,current and dung the tra+el period of

nearl % minutes in the rer- the )et granules &ecome hot and dr and &ecome free

flo)ing ha+ing temperatures ranging from 65 to "0! 7he granules also &ecome hard

during the course of dring 7he product moisture content is usuall reduced to a target

of 1@ eit drer 'fter the successful granulation and dring process the semi,finished

product is transferred to the cooling section of the drum

7he material from the rer falls on the 7ransfer elt !on+eor )hich feeds the material

to a *otar !ooler 7he !ooler is also a rotar rum similar to rer Bsi=e 22 m dia

12 m longC 7he granules are sent to the *otar !ooler to &ring do)n the temperature of

the granules to around 40 degrees centigrade- ensuring that as atmospheric air is sent

into the !ooler in a counter current fashion- suction is created & another induction fan

called !ooler $an In this process &oth cooling and contraction of the material takes

place

'll the three *otar rums ie Dranulator- rer and !ooler are slightl inclined so that

material passes through them & gra+it 7he rer and !ooler are fitted )ith lifter

plates inside the shells so that the granules passing through rer and !ooler are

properl dried )ith hot air and cooled )hile passing through these t)o shells 7he outlet

product temperature depends on the condition of the air used for cooling

Scree%i%g Sectio%

7he !ooler outlet material is fed to the Screen $eed (le+ator )hich feeds material to

the *otar Screen Bsi=e 1 m dia 4 m longC 7he cooled granules from the *otar

!ooler are of three si=es ie under si=e- product si=e and o+er si=e 7hese granules are

screened in the *otar Screen ere the fines and o+er si=e granules are separated

7he granules of much smaller si=e than desired are sent for the reccling process )ith

the help of the con+eor &elt 7he o+er si=e materials are collected and transferred to

the (le+ator )ith the help of the con+eor &elt 7he (le+ator in turn sends these o+er

si=ed granules to the *oller !rushers for the repeat of the production process

29




?.8F &i%is4e( Pro(uct ,aggi%g Sectio%

7he on si=e product from the *otar Screen through a Product !on+eor is fed to

ucket (le+ator )hich in turn feeds Product ins 7he product is &agged in 50 kg P(

&ags after thorough inspection & Semi 'utomatic eighing / agging Machines and

Stitching Machines 7he finished material is finall stored in the N$inished Doods ShedO

manuall

?.8G Pollutio% Co%trol Sectio%

7he Plant contains Stack and Pollution !ontrol (.uipment for guarding the en+ironment

and a+oiding material loss 7he rer air B25000 m3H hourC and !ooler air

B25000m3HhourC are treated through dedicated !clones for remo+al of dust and thedust free air is sent to Stack B!himneC 'll the collected dust particles are reccled

&ack in the process

?.8B >e%eral

7here is no chemical reaction at all in the a&o+e manufacturing process 7he process

in+ol+es onl a phsical miture of the ra) materials )ith different ingredients com&ining

together to form granules of homogeneit as per the scheduled :P ratio 't an point

of time onl a single product mi can &e manufactured & the unit

30




CHAPTER < FSITE PARTICU'ARS

F.81 T4e $articulars o# t4e $ro2ect site ac0uire( i% t4e %ame o# !3s

Palamoor&ertili9ers Pvt. 't(. are #ur%is4e( i% t4e #ollo:i%g ta;le

Sc4e(ule o# $ro$erty S :o 94- :elapatla >illage - !houtupal Mandal-

:algonda istrict

7otal etent of area 409 acres

Date o# registratio% o# sale (ee(s 11th <ul 2011

alue o# co%si(eratio% *s306"50H,

*egistration / stamp chargesA *s 33500H,'a%( Develo$me%t 7he compan proposed to spend around 45 laks

around cutting of tress- &ushes- oulders- and

e+eling and filling e ha+e taken an amount of

*s116 lakhs on land de+elopment on

conser+ati+e &asis

Particulars o# co%%ectivity 60 kms from dera&ad

6 kms from the main road B:9dera&ad,

>i#aa)ada igh)aC

'ocatio% o# %earest $o:er statio% :earest po)er su&,station is 5 kms a)a from the

sight

ater availa;ility 'de.uate &ore,)ell )ater is a+aila&le to meet the

minimum re.uirements of the compan

31




CHAPTER < G

SCHEDU'E )& I!P'E!ENTATI)N AND STATUT)R" C'EARANCES

G.81 Sc4e(ule o# Im$leme%tatio%

Im$leme%tatio% Sc4e(ule

7he most critical aspect regarding the successful implementation of the pro#ect is to

ensure the completion of the pro#ect as per the schedule 7he pro#ect is estimated to &e

completed & Sep 2012 and the plant )ill commence its commercial operations from 1st

Ect 2012 7he implementation schedule is represented in the follo)ing chartA

S.N

Descri$tio% 5a% &e; !ar A$

r !ay 5u% 5ul Aug Se$ )ct Nov Dec

1= 1= 1= 1= 1= 1= 1= 1= 1= 1= 1= 1=

1 ande+elopment

3 $inancial!losure

4 uildings / !i+ilorks

5 MachinerErder

6 Machiner(rection /!ommissioning

" 7rial *un /!ommercialproduction

32




TER! ')AN SCHEDU'E$irst is&ursement <an 2011

!ommencement of 1st installment 'pr 2013oan !losure Mar 2019

T4e a#oresai( im$leme%tatio% sc4e(ule a%( term loa% re$ayme%t sc4e(ule are

#ou%( to ;e realistic.

G.8= Statutory Cleara%ces

Sl Particulars Aut4ority

01 and !on+ersion *E :algonda ist

02 :o o&#ection certificate Dram Panchaat

03 *egistration under single )indo) Do'P Single indo)04 Site / uilding Plan 'ppro+al M'

05 !onsent for esta&lishment 'P Pollution !ontrol oard06 Po)er $easi&ilit and Po)er !onnection 'P Po)er distri&ution co

0" >'7 *egistration !ommercial 7aes ept GDo'P0% (cise *egistration DEI !entral (cise ept

09 icense to manufacture !ommissioner of 'griculture10 P': :o''D!P0519D I7 ept

11 !onsent for Eperations 'P Pollution !ontrol oard

12 Dround ater !learance eput irector Dround ater

:algonda

13 'ppro+al of factor plan irector of $actories- dera&ad

33




CHAPTER < BPR)5ECT C)ST + !EANS )& &INANCE

B.1 Pro2ect Cost

7he pro#ect cost for the esta&lishment of the 400 7P :P fertili=er granulation plant is

estimated as *s 1%31 lakh '&out "6 @ of the pro#ect cost is on account of ci+il )orks

and plant and machiner 7he component )ise cost is ta&ulated &elo) 7he cost of the

pro#ect also includes the interest during construction amounting to *s6945 akhs

Ta;le F.1 Pro2ect Cost B*s akhsC

Descri$tio% Amou%t

1 and and and e+elopment 1500

2 uildings / !i+il )orks %6000

3 Plant / Machiner 56500

4 a& (.uipments 500

5 Misc $ied 'ssets 1400

6 !ontingenc ? 5@ "200

" eposits 3000

% Preliminar (penses 1600

9 Pre,operati+e (penses 10100

10 Margin Mone for orking capital 15300

Total 1671.88

34




B.= !ea%s o# &i%a%ce

7he pro#ect is proposed to &e financed )ith a mi of de&t and e.uit 7he de&t e.uit

ratio proposed is 150 A 1 7he de&t )ill &e in form of 7erm loan from ank amounting to

*s 110000 akhs 7he promotersF contri&ution )ill &e in the form of e.uit 7he means

of finance is ta&ulated &elo)

!ea%s o# &i%a%ce Rs 'a-4

Descri$tio% Amou%t

1 (.uit from Promoters "3100

2 7erm oan 110000

Total 1671.88

B.7 Pro2ect Cost ali(atio%

7he component,)ise +alidation of pro#ect cost is furnished &elo)A

B.7.1 'a%(

7he !ompan has ac.uired 'cre 409 land for the purpose of the pro#ect at S :o "6-

:elapatla >illage - !houtupal Mandal- :algonda istrict- 'ndhra Pradesh 7he Pro#ect

site is a&out 60 M from dera&ad 7he site is )ell connected & road net)ork and the

re.uired .uantit of po)er too has &een assured Manpo)er too is a+aila&le in close

+icinit E+erall the pro#ect location is considered to &e suita&le for the purpose 7heland cost )ith registration / stamp charges comes to *s 306 lakh 7he land

de+elopment cost is estimated at around *s 116 akh

B.7.= Civil a%( ,uil(i%g or-s

7he cost of ci+il )orks has &een di+ided into 6 !ategories !omponent )ise cost has

&een ta&ulated &elo) 7he E8 estimates of ci+il )orks ha+e &een prepared & MHs

ulkarni !onsultant- :araanaguda- dera&ad 500029

7he cost of !ai% Pla%t S4e( a%( !ac4i%e &ou%(atio%s has &een estimated as *s

"5456 akh 7he Shed )ill house main plant- finished goods and ra) material 7he

.uantities of all )orks ha+e &een estimated and the rates for +arious )orks ha+e &een

used for estimation of cost 7he rates considered for estimation are found to &e as per

present market standards 7he cost estimates are found to ade.uate and reasona&le

35




Civil a%( ,uil(i%g or-s Summary Rs. I% la-4

Particulars T)TA'

I M'I: P':7 S( ': M'!I:( $E;:'7IE:S BF?.FG

II E$$I!( ;II:D H 'MI:BD1C 7G.8B

III (Q7(*:' E*S 7B.?8

I> 'E;* E! =8.1F

> (ID*ID( H S(!;*I7 ?.68

>I ;7II7 E! $E* D(:(*'7E*S ': 7*':S$E*M(*S B.1?

6G8.1=

Rou%(e( 6G8.88

Similar methods Bas applied for Main Plant Shed and Machine foundationsC ha+e &een

used for estimation of cost for Effice &uilding- a& &lock- Denerator and Panel room and

Securit office 7he rates used for estimates are found to &e reasona&le 7he cost of

de+elopment of the Effice &uilding is estimated at *s 360" lakh

7he cost of eternal )ork includes construction cost of pa+ement for factor premises-

approach road- compound )all and gates and pro+ision of )eigh&ridge inclusi+e of all

ci+il )ork and cost of M / for pro+iding ca&les- street lights / poles along roads-

compound )all- securit lights etc for eternal electrification

7he total cost of ci+il and &uilding )orks has &een estimated at *s %6012 akhs 7he

cost estimates are prepared &ased on the E8 of the &uilding and ci+il )orks 7he rates

adopted for calculation of cost of +arious ci+il )orks are found to &e as per present

market condition 7he o+er all cost of construction is found to &e ade.uate and

reasona&le 'PI7!E has re e+aluated the entire o.- and came out )ith the a&o+e

figures

7he detailed estimates of !i+il and uilding orks are furnished in 'ppendi 2

36




S.No.

E0ui$me%t ua%tity !a2or Tec4%icalS$eci#icatio%

23 Product Silos 2!apacit 30 7 each- si=e 3000mm dia Q

3000mm

24 'utomatic eighing /agging Machine 2 !apacit 400H500 &agsHhour of 50 kg &ag

25 Stitching Machines 2 ith slat con+eor

26rer !clone ust!ollector 2 >ertical tpe- si=e 1%00mm Q 4500mm height

2" er $an 1 !apacit 25000m3Hhour )ith dri+e

2%!ooler !clone ust!ollector 2 >ertical tpe- si=e 1%00mm Q 4500mm height

29 !ooler $an 1 !apacit 25000m3Hhour )ith dri+e

30 !himne 11600mm dia at the &ottom Q 1%00mm dia at top

Q 30000mm height

31 ot 'ir Denerator 1 7o heat 10000m3Hhour air

32Structural SteelStaging S

33 Painting S

'll the e.uipments are proposed to &e procured from MHS <aa $a&rication orks-

:acharam- **ist- dera&ad

7he Machiner supplier MHS <aa $a&rication orks is suppling the mHc on turnke

&asis )hich includes &ought out items like Dset- 7ransformer- (lectrical items- $ire

$ighting / core e.uipment like *otar Dranulator- *otar rer )hich are outsourced

from standered Supliers 7he prices .uoted for the machiner to &e supplied & the MHS

<aa $a&rication orks is 59110 akhs 7he promoters ha+e further negotiated the

prices of machiner and reduced it to 565 lakhs

7he !ompan has also collected .uotations from other suppliers and ha+e short listed

<aa $a&rication &ased on the technical specification- price and credential of the

supplier

7he costs of the e.uipments are found to ade.uate and reasona&le 7he e.uipment

)ise &reakup of the cost is pro+ided in A$$e%(ix 7.

38




Cost Comparison Statement:

Sl.No.

Descri$tio%

1 400 7P :PPlant

MHs <aa$a&rication

dera&ad*s56500 lakhs

MHs'&hishek (ngineering / chemicalsimited- 'mara+ati- Maharastra

*s5%0 lakhsBdoes not include D Set / $irefighting e.uipmentC

T4e $rices 0uote( ;y t4e !3S 5aya &a;ricatio%s is lo:er t4at t4e ot4er sta%(ar(

su$$lier !3s.A;4is4e- E%gi%eeri%g + c4emicals 'imite(

B.87.7A Cre(e%tials o# t4e Su$$lier o# !ac4i%ery

' &rief profile of MHs <aa $a&rications- the supplier of machiner is furnished &elo)A

<aa $a&rication orks Besigners- (ngineers- !ontractors and $a&ricatorsC )as

incorporated in the ear 1990 & Sri Maturu Surender *edd e is a technolog

graduate from S> ;ni+ersit 7he )orkshop and factor are located at- :acharam and

Mallapur Industrial areas- dera&ad

Ex$erie%ce

7he compan has 21 ears eperience in manufacturing of chemical- pharmaceutical

e.uipments and other process plant e.uipment 7he also ha+e eperience in all tpes

of hea+ steel fa&rications )orks and Pre,(ngineered uildings BP(C 7he ha+e

successfull completed man pro#ects- )hich are undertaken on turnke &asis 7he

ha+e good infrastructure- highl eperienced- )ell .ualified )ork force- dnamic

management and &etter planning )hich are the assets of the compan to fulfill time,

&ound commitments )ithout compromising on .ualit

7he manufacture e.uipments as per national and international standards such as IS

2%25- P5500- 'SM( S(! >III I> 1/2 7heir &road spectrum of clientele spans o+er

the +arious industries like ,

1 !hemical industr

2 Pharmaceutical industr

3 Pollutions control

4 Pre (ngineering uildings

5 ea+ steel fa&rications

6 !ommercial industrial kitchen and hospital e.uipments

39




C4emical Pla%t E0ui$me%t

*eactorsA SS- MS- *u&&er ined and ead ined *eactors up to 10 !apacit

eat (changersA SS- MS- !opper 7u&e eat (changers up to 100 S.m !apacit

Storage 7anksA SS- MS- *u&&er ined Storage 7anks up to 100 !apacit

!ondensers H !hillers SS- MS- !opper 7u&e !ondensers up to 50 gHs.cm Pressure

7est

(+aporator- (conomi=ers- *e,oilers- 'gitators -istillation !olumns -!olumn Internals

eaf $ilters- :otshe $ilters- 'utocla+es- rum $lakers etc

Pharma (.uipments

7ra rersA !apacit 12 to 200 7ras of 32RQ16RQ125R- $luid ed rers-

*otar >acuum rers- *otocone >acuum rer- (tractors- ou&le !one lenders-

Multi Mill- Sifters- Mass Mier- $luid ed !oater- !oating Pan- *oll !ompactor

*apid Mier Dranulator-Pul+eriser-Micro Pul+eriser etc

Past customers

1 akelite lam imited

2 dera&ad istilleries

3 Man small chemical firms in Mallapur area of dera&ad

7he ha+e t)o ancillar unitsA

1 MHs *ama (ngineering )orks- :acharam and

2 MHs 'nil !hemicals- Mallapur- dera&ad

7ogether the make all the a&o+e e.uipments

Since the are making similar products and general fa&rication e.uipment- it is not +er

difficult for them to take up fertili=er plants Most of the .uoted e.uipment is fa&ricated in

their premises onl o)e+er- some core e.uipment like *otar Dranulators- *otar

riers- Special castings etc are outsourced from Standard supplier located in Mum&ai

40




'ist o# !ac4i%es a%( ot4er I%#rastructure.

1athe and !utting Machines

2!ranes and other e.uipment

3elding and (lectrical Machines

&i%a%cial Ca$a;ility

<aa $a&rication )orks is ha+ing an annual turno+er in ecess *s 10 crores per annum

and the ha+e )orking capital limits of *s 200 lakhs from anks

B.7.? 'a; E0ui$me%ts

7he a& e.uipments that are proposed to &e procured from <aa $a&rications at the

cost of 5 lakhs

B.7.F !iscella%eous &ixe( Assets

7he Miscellaneous fied assets that are proposed to &e procured are office furniture-

interior and communication e.uipments 7he total cost for the miscellaneous fied

assets is arri+ed at *s 1400 akhs 7hough 8uotations for the same is .uoted at 243

laks 'PI7!E assessed that the cost can &e restricted to 14 lakhs is ade.uate and

some of the unproducti+e purchases can &e eleminated

B.87.8G Co%ti%ge%cies

As the pro#ect is scheduled to &e completed o+er a period of 9 months there is need to

pro+ide for additional ependiture arising from escalation in the actual cost of &uildings

/ ci+il )orks and other fied assets ence- a cushion for the pro&a&le additional

ependiture is pro+ided & )a of contingenc cost ?5@ on fied assets 7his )orks

out to *s"2 lakh as underA

Rs i% la-4

Descri$tio% Costuildings / !i+il orks %60

Plant / Machiner 565a& (.uipment 5

Miscellaneous $ied 'ssets 14

Total 1???

!ontingenc !ost ?5@ "2

B.7.B De$osits

41




Securit eposit has &een considered at *s 3000 akhs 7he cost is to)ards o&taining

po)er connection and other appro+als 7he cost allocation is found to &e ade.uate

B.7.6 Prelimi%ary a%( Pre<o$erative Ex$e%ses

7he preliminar and pre,operati+e epenses are arri+ed as *s 11"20 akhs 7he &asis

of arri+ing at the cost is ta&ulated &elo) 7he pre,operati+e epenses ha+e &een

capitali=ed )ith fied assets and depreciated o+er the ears

Particulars !o%t4s alue

PRE'I!INAR" EXPENSES

!ompan Incorporation S 250P* Preparation !osts S 250

oan 'c.uiring !osts 1100

T)TA' 1G.88

PRE<)PERATIE EXPENSES

7ra+elling H 'dministrati+eepenses

1000

7echnical no)ho) $ees 500

Interest during construction 6945

Insurance uring !onstruction ?025@ 0f !i+il- P/M

4 1425

7rial Production costs S 250

T)TA' 181.=8>RAND T)TA' 11B.=8

B.7. !argi% !o%ey #or or-i%g Ca$ital

7he )orking capital for the first full ear B2012,2013C of operation has &een assessed as

*s51000 akh and the margin mone at 30@ of )orking capital amounting to

*s 15300 akh has &een capitali=ed to the pro#ect cost

7he total pro#ect cost has &een arri+ed at *s 1%31 akh after pro+iding for contingenc

?5@ on cost of fied assets 'n further increase in pro#ect cost during the

implementation of the pro#ect )ill &e &orne & the promoters E+er all the cost of pro#ect

is found to &e ade.uate and reasona&le

42




CHAPTER < 6PR)&ITA,I'IT" ASSU!PTI)NS AND PR)5ECT EC)N)!ICS

6.1 Pla%t Ca$acity a%( Ca$acity Utili9atio%

7he installed capacit of the proposed :P fertili=ers granulation plant is 400 7P for 3

shifts 7he plant )ill operate for 20 hours in a da )ith one hour stoppage each at the

end of 2nd and 3rd shifts and also t)o hours stoppage for cleaning and maintenance

7he unit is scheduled to run for 300 das a ear 7he annual capacit is therefore

reckoned as 120-000 M7

7he capacit utili=ation has &een considered as 60@ during the first ear of operation as

the unit is ne) and )ill take time for sta&ili=ation $i+e Percent increase in capacit

utili=ation has &een considered e+er ear )ith a maimum of %0@ capacit utili=ation

during the de&t tenure 7he a+erage capacit utili=ation of the industr is around 90@

6.= Pro(uct !ix

7he follo)ing product mi ratio has &een considered for the purpose of economic

analsis

Product Mi ratio

Pro(uct >ra(e Pro(uctio% TPA

2%A2%A00 400001"A1"A1" 30000

15A15A00 "000

20A20A00 %000

20A10A10 %000

1%A1%A09 2000

5A15A15 2000

10A26A26 2000

14A35A14 2000

15A15A15 4000

12A32A16 200022A00A11 2000

19A19A19 11000

T)TA' 1=8888

7he product mies are deri+ed &ased on the present market demand 7he mi can &e

changed at an moment as per market demand )ithout an change in machineries

43




6.7 SA'ES PRICES

7he sales prices of the products are arri+ed at as per present market condition and are

kept conser+ati+e considering that Palamoor$ertili=ers is a ne) entrant in the sector

7he prices of the products considered for the purpose of economic analsis are

ta&ulated &elo)

Pro(uctSales PriceRs. Per !T

2%A2%A00 15250

1"A1"A1" 12600

15A15A00 14000

20A20A00 10600

20A10A10 10"00

1%A1%A09 12300

5A15A15 %92010A26A26 13300

14A35A14 16300

15A15A15 114%0

12A32A16 13450

22A00A11 %900

19A19A19 12%%0

Note e ha+e +alidated the prices )ith reference to the prices o&tained from

Do+ernment sources and also the prices circulated & the $ertili=er 'ssociation of India

$or our stud )e ha+e taken the prices on a conser+ati+e &asis

6.? Ra: !aterial Cost

7he ra) materials re.uired for the proposed :P fertili=ers manufacturing unit are ;rea-

MEP- and 'P- SSP- 7SP and $illers like Dpsum and !hina !la 7he main sources

for their a+aila&ilit are :agar#una $ertili=ers and !hemicals td- *I!E- II$!E-

Du#arat $ertili=ers and M'*$(

' 7pical eample of *a) Material re.uirement is eplained &elo)

>ra(e 1B1B1B

' grade 1"A1"A1" :P fertili=er contains 1"@ :itrogen- 1"@ Phosphorous and 1"@

Potassium & )eight of the :P mi So for e+er one ton of fertili=er production 1"0 g

each of :- P and )ill &e present 7his is achie+ed & miing ade.uate .uantit of the

+arious chemicals ' tpical determination of .uantit is done &elo) for 1"A1"A1" grade

:P fertili=er 7he &alances are met through other chemicals and filler ra) materials

like gpsum

44




Primary Ra: !aterial Re0uire( C4emical &ormula

;rea !4 :2E

'P Bi,ammonium PhosphateC B:4C2 PE4

MEP BMuriate of PotashC !l

7he !hemical compositions of the three primar ra) materials are listed &elo)

UREA

7otal :itrogen @ & )eight- on dr &asis Min 46@

iuret- @ & eight , 15@ Ma

Moisture- @ & eight , 5@ Ma

DAP

7otal :itrogen @ & )eight , Min 1%@

'mmoniacal :itrogen form- @ & )eight , Min 155@

7otal :itrogen in form of ;rea- @ & )eight , Ma 25@

:eutral 'mmonium !itrate solu&le Phosphates B's P2E5C @- & )eight MinG46 G 495@

Moisture @ & )eight , Ma 15@

ater Solu&le Phosphates Bas P2E5C @ & )eight , Min 41@

!)P

ater Solu&le Potash !ontent B's 2EC @ & eight Min , 60@

Sodium as :a!l- @ )eight BEn dr &asisC Ma , 35@

Moisture @ & eight Ma , 05@

:itrogen re.uired is reco+ered &oth from ;rea and 'P Phosphorous and Potassium

are reco+ered from 'P and MEP 7he &alancing of ra) material is done & .uantifing

re.uirement of Potassium ence for 1"0 g Potassium re.uirement 2%4 g

B100H601"0C of MEP is re.uired

Ence the MEP re.uirement has &een made the re.uirement of Phosphorous is done

7he content of Phosphorous as eplained in the a&o+e composition of 'P is around

495@ or 495 Drams for e+er g of 'P ence to get 1"0 g Phosphorous 342 g of

'P is re.uired 7he 'P used )ill also gi+e 615 g of :itrogen at 1%@ content

7he &alance 10%5 :itrogen is reco+ered from 236 g of ;rea at 46@ !ontent

45




ence for e+er M7 of 1"A1"A1" Drade $ertili=ers the material &alance for primar ra)

material is as gi+en &elo)A

236 g of ;rea

342 g of 'P

2%4 g of MEP

7he &alance ingredients are met through other chemicals like Single Super Phosphate

BSSPC and Dpsum as $iller

Similarl the ra) material &alancing is )orked out for other grades of fertili=ers

Ra: !aterial 3 Pro(uct <<J 18=G=G 1?7F1? 1F1F1F 1=7=1G ==8811 111;*(' 000 "00 22%00 "00 4%000 25200

'P 56000 "6000 25200 64900 000 41400MEPBPE7'SC 43400 23300 25000 26"00 1%400 31"00

SSP 000 15000 %00 000

7SP 600 000 2200 4400 000

DPS;M 4900 2500 5100

$I(* M'7(*I' H !I:'!' 4900 000 2%500 1"00

7E7' (ID7 BgC 100000 100000 100000 100000 100000 100000

7he annual ra) material re.uirement as per the desired product mi ratio and the

capacit utili=ation is ta&ulated &elo) 7he ra) material re.uirement analsis is

presented as 'ppendi "

Ra: !aterial 3Pro(uct <<J =6=688 1B1B1B 1F1F88 =8=888 =81818 16168 F1F1F

;*(' 3"100 23600 22000 2%500 35%00 25"00 300'P 51900 34200 23100 3%"00 19"00 34%00 2"100

MEPBPE7'SC 000 2%400 000 000 16"00 15100 25000

SSP 000 %000 15%00 14000 6000 6200 16000

7SP

DPS;M 3000 3%00 "500 5%00 5%00 "200 000

$I(* M'7(*I' H!I:' !' %000 2000 31600 13000 16000 11000 31600

7E7' (ID7BgC 100000 100000 100000 100000 100000 100000 100000

46




*a) material re.uirement per annum B!T $er a%%umC

=81=<17 =817<1? =81?<1F =81F<1G =81G<1B =81B<16 =816<1

UREA 1520% 2196" 2365" 2534" 2"03" 2"03" 2"03"

DAP 21621 31231 33633 36035 3%43% 3%43% 3%43%!)PP)TASH "%21 1129% 1216" 13036 13905 13905 13905

SSP 2""5 400% 4316 4625 4933 4933 4933

TSP %5 122 132 141 150 150 150

>"PSU! 192% 2"%5 3000 3214 342% 342% 342%

&I''ER!ATERIA' 3CHINA C'A" 4562 65%9 "096 "603 %110 %110 %110

7he prices of the ra) material considered are ta&ulated &elo)A

Ra: !aterial Prices.

Ra: !aterial Ra. Per !T;*(' 5"40

'P 1%600

MEPBPE7'SC 12100

SSP 5100

7SP "900

DPS;M 2000$I(* M'7(*I' H !I:' !' 2000

:oteA 7he ra) material prices ha+e &een +alidated )ith reference to the prices o&tained

from Do+ernment of 'ndhra Pradesh sources and also the actual input costs &eing

incurred & a running :P fertili=er unit $or the purpose of the stud )e ha+e

considered the higher of the t)o prices

6.F Po:er a%( Coal

7he !ompan is installing a transformer of 500 >' 7he peak po)er re.uirement

)ould &e 3"0 7he unitFs BC consumption at 60@ utili=ation )ill &e 959040

In case of lack of po)er Bduring po)er failureC D Set is proposed to &e used for

)hich pro+ision has &een made in the pro#ect cost In +ie) of fre.uent po)er failure- it is

assumed that %0@ of the po)er )ill &e dra)n from the electricit &oard and the &alance

)ill &e dra)n from the D set 7he cost of po)er from the electricit &oard )ill &e at *s

250 per >' per Month of demand charges and *s 355 per unit charges

Bapplica&le for 11> su&,stationC 7he cost of po)er from Denerator has &een

considered as *s % per

's per industr norms the coal re.uirement for the purpose of running the furnace )ill

&e around 22 kg per M7 7he cost of coal as per present market trend is *s 450 per

47




g and the same has &een taken into consideration for the purpose of economic

analsis

7he po)er and coal consumption analsis is presented as 'nneure 3!

6.G Pac-agi%g a%( &reig4t

's per the packaging trend in the industr fertili=ers are packed in 50 g P( ags

7he cost per &ag )orks out to *s5 per unit B the actual rates are .uoted in terms of

)eightC and same has &een taken into consideration as cost of packaging

7he freight cost is assumed ? *s200H, per M7 of production

6.B !a%$o:er

'round 52 Manpo)er )ould &e re.uired for the purpose of running the unit Ef the 52

manpo)er- 42 )ill &e re.uired for the purpose of production and the &alance for the

purpose of 'dministration

7he amount of annual salaries of the production staff is estimated at *s 4"52 akh

including 10@ fringe &enefits and for the administrati+e salaries at *s 4%53 akh per

annum including 20@ fringe &enefits earl increase in )ages is assumed at 5@ and in

salaries at 10@ 7he )orkings are presented in A%%exure ?

6.6 )THER RECURRIN> EXPENSES

*epairs and maintenance epenses ha+e &een reckoned as 3@ of the asset +alue as

&ase for the first ear Bfor 3 months in the first ear of operation reckoned pro,rata

?0"5@ of the asset +alueC- 7en per cent increase has &een pro+ided for the epenses

e+er ear thereafter

Ether manufacturing epenses ha+e &een reckoned as 05@ of re+enue Sales and

administrati+e epenses ha+e &een considered as 2@ and 0"5@ of the re+enue

respecti+el

6. I%come Tax

48




Income ta has &een considered as 3245@ as per I7 act and 2000 @ as M'7 7he

maimum of &oth has &een taken to compute ta paa&le to the department

6.18 De$reciatio%epreciation has &een calculated &oth as per S and > method 7he rates of

depreciation are ta&ulated &elo)

Item S'! D

uilding 334@ 10@

P/M 52%@ 15@

Ether 'ssets 52%@ 15@Mfa 633@ 10@

6.11 TER! ')ANTerm 'oa% Dis;urseme%t 3Re$ayme%t Sc4e(ule

is&ursementH*epament Period

1

st

dis&ursement ast 8uarter of 2011, 2012!ommencement of commercial prodn Ect 2012

!ommencement of repament 'pril 2013!ompletion of repament March 2019

7otal period of repament ,,,,6 ears and si months Interest from <an 2012 to Sep 2012 ie for 9 months capitali=ed

Moratorium period allo)ed from the month of commercial production to thecommencement of repament is 6 months

oor,to,door repament is " ears 3 months

7he term loan proposed & the !ompan is *s 110000 akh and the interest for the

same is considered ? 15@ 7he term loan is considered to &e dis&ursed from the

month of <anuar 2012 and to &e completed & second .uarter of 2012,13 7he interest

during construction has &een considered as pre,operati+e epenses and capitali=ed to

the pro#ect cost and depreciated proportionatel )ith the fied assets 7he term loan

repament is considered from the first .uarter of 2013,14 )ith 6 months of moratorium

7he term loan is paid )ithin 6 ears of initiation of repament 7he door to door tenure

for the term loan )orks out to " ears and three months

6.1= )R@IN> CAPITA'

7he holding period considered for the purpose of the assessment of )orking capital

re.uirement is ta&ulated &elo) 7he holding period of ra) material has &een considered

as 22,25 das and that for packing material as one month ork in progress has &een

taken as 3 das and that for finished goods and &ills recei+a&le as 6 das and half

month respecti+el 7he holding period for sundr creditors has &een taken as half

month

49




olding period for ra) material

Curre%t AssetsHol(i%g Perio( I%

!o%t4s

*a) Material 0"5

Packing Material 100

ork in Process 010

$inished Doods 020

ills *ecei+a&les 050

Sundr !reditors B!C 050

7he )orking capital re.uirement for the first ear of operation has &een assessed as

*s51000 akh 30@ of the same is proposed to &e &rought in & the promoter as

margin mone and the same has &een capitali=ed to the pro#ect cost

6.17 P,IDT

7he profit &efore ta is positi+e from the +er first ear of operation 7he P7 is lo)

during the first ear of operation due to lo)er operating period and lo)er capacit

utili=ation 7he PI7 for the first se+en ears of operation is ta&ulated &elo) and the

calculations are presented in A%%exure GA.

Pro#it ;e#ore tax Rs. 'a-4C

Particulars =81=<17 =817<1? =81?<1F =81F<1G =81G<1B =81B<16 =816<1Profit &eforeta BPI7C 771.GG G?6.16 GB1.G1 B16.87 BG7.1? B?8.81 B=?.81

6.1? Pro#it a#ter Tax

7he profit after ta is positi+e too from the +er first ear of operation 7he P'7 is lo)

during the fist ear of operation due to the same reason as that of P7 7he P'7 for the

first se+en ears of operation is ta&ulated &elo) and the calculations are presented in

A%%exure GA.

Pro#it a#ter tax Rs. 'a-4s

Particulars =81=<17 =817<1? =81?<1F =81F<1G =81G<1B =81B<16 =816<1Profit 'fter7a BP'7C 1??.F7 =G6.1G =6.8B 7=B.71 7GF.?= 7G?.8? 7G.8G

50




6.1F Cas4 Accruals

7he cash accruals from P'7 and depreciation are ade.uate enough to repa the term

loan )ithin the stipulated time 7he cash accruals for the first se+en ears of operation

are ta&ulated &elo) and the calculations are presented in A%%exure GA.

Cas4 Accruals Rs. 'a-4

Particulars =81=<17 =817<1? =81?<1F =81F<1G =81G<1B =81B<16 =816<1

!ash 'ccruals 1G7.1 77B.B8 7F6.G1 7G.6? ?7?.F ?77.FB ?7F.7

6.1G ,rea- Eve% A%alysis )$erati%g Ca$acity

7he operating &reak e+en )hich is pro#ected at 59@ during the first full ear of operation

reaches 49@ & the end of eighth ear of operation 7he ear )ise operating &reak

e+en calculations are presented in A%%exure 1=.

6.1B De;t Service Coverage Ratio

7he gross de&t ser+ice co+erage ratio ranges &et)een 15" to 299 and a+erages at

1%0 7he net S!* ranges &et)een 199 and 242 7he net a+erage S!* is 21%

7he a+erage S!* ratios are )ell a&o+e the &enchmark le+els 7he ear )ise S!*

ratios are ta&ulated &elo)

DSCR Rs. 'a-4

Particulars=81=<

17=817<

1?=81?<

1F=81F<

1G=81G<

1B=81B<

16=816<

1

Dross S!* 299 15" 15% 1"" 201 195 210

'+erage 1%0

:et S!* , 211 199 220 242 21" 21%

'+erage 21%

6.16 INTERNA' RATE )& RETURN

7he internal rate of return of the pro#ect )orks out at 2403@

6.1 SECURIT" !AR>IN

7he a+erage securit margin )orks out to 6194@

51




CHAPTER < S)T ANA'"SIS

S)T A%alysis o# !3s Palamoor&ertili9ers &ertilisers Pvt. 't(.

Stre%gt4s

7he promoters ha+e rich eperience in fertili=er marketing- and ha+e good

understanding of rele+ant market

ighl eperienced technical consultant

)$$ortu%ities

7here is a large demand,suppl gap in the fertili=er sector 's the eisting

manufacturing capacit is inade.uate to meet the countrFs re.uirements of fertili=ers-

India is importing fertili=ers on a continuing &asis 's such there )ill &e no dearth of

demand for :P granulated fertili=ers

ea-%esses

ack of eperience for the promoters in manufacturing sector

T4reats

!ommissioning of ne) :P granulation units in 'ndhra Pradesh could increase the

le+el of competition in the industr

'n change in the go+ernmentFs polic on import of fertili=er nutrients could impact the

a+aila&ilit of ra) materials for the compan

52




e. Tec4%ical Arra%geme%ts

7he machines proposed to &e purchased & Palamoor$ertili=ers are tested and pro+en

and are in use & +arious granulated plant units

7he compan has appointed Shri P Mohan *ao as technical consultant for o+erseeing

the implementation of the pro#ect Shri P Mohan *ao is highl .ualified +eteran in

industr

#. Utilities

'de.uate Po)er and &ore,)ell )ater is a+aila&le to meet the re.uirements of the

compan

g. Im$leme%tatio% Sc4e(ule

7he first dis&ursement of loan is epected in <an 2012 7he ci+il )orks and erection of

machiner are epected to &e completed & <une 2012 7he pro#ect is epected to go

on stream in Ecto&er 2012 7he term loan repament )ill commence from 'pril 2013

and )ill &e completed in March 2019 ie the door,to,door repament )ill &e " ears 3

months

4. Pro2ect Cost

7he pro#ect cost has &een arri+ed &ased on the follo)ing factorsA

• E8s of ci+il )orks and estimates su&mitted & the promoter along )ith the

&uilding plan

• 8uotations recei+ed from the supplier of machineries B.uotations a+aila&le for

100@ of the machineries and electrical e.uipmentsC

• Pre,operati+e epenses including interest on term loan during the construction

period

•Margin mone for )orking capital

'll the costs relating to ci+il )orks and plant / machiner ha+e &een +alidated for their

reasona&leness )ith respect to the E8s- estimatesH.uotations recei+ed and the

current market trend 7he cost of the pro#ect is estimated at *s 1%31 lakh 7he &ank

term loan is estimated at *s 1100 lakh and the promoterFs e.uit *s "31 lakh 7he

de&tHe.uit ratio for the pro#ect is 150A1 'n cost o+errun in the pro#ect )ill &e &orne &

the compan

54




i. @ey &i%a%cial I%(icators

7he returns from the pro#ect are sufficient to repa the term loan )ithin the time

stipulated & the lending &ank 7he ke financial indicators are )ithin the accepta&le

norms 7he a+erage Dross S!* for the pro#ect )orks out to 1%0- a+erage net S!*

21%- (PBat operating capacitC 59@ in the 3rd full ear of operation and I** 2403@

11.8= Ris- &actors

a 7he promoter are +enturing into manufacturing sector for the first time- thou the

ha+e rich eperience in fertili=er marketing

B*isk MitigantA 7he promoters ha+e appointed competent technical consultant to

o+ersee the implementation of the pro#ect and .ualified ke person for production 7he

are also in the process of appointing suita&le ke personnel to take care of operations-

marketing and financeC

& (sta&lishment of ne) :P granulation plants in 'ndhra Pradesh )ill raise the le+el of

competition for the compan

B*isk MitigantA 7here is al)as a demand,suppl gap in the a+aila&ilit of fertili=ers

ence marketing of :P mi fertili=ers should not &e a pro&lemC

c In case of poor monsoon the off,take of :P fertili=ers )ill get reduced

B7he unit has the flei&ilit of ad#usting the actual le+el of production and the product mi

in accordance )ith the market demand Moreo+er an sluggishness in the off,take of

fertili=ers )ill &e a temporar phenomenon )hich the compan is epected to tide o+erC

d 7he pre+ailing Do+ernment Policies ma ha+e affect on the compan

B*isk Mitigant A In the long run the go+ernment is committed to encourage :P units in

the +ie) of +arious ad+antages accruing to the farmersC

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11.7 A$itco*s &i%(i%gs

I% vie: o# t4e $romoters* I%(ustry ex$ertise/ a$$oi%tme%t o# com$ete%t tec4%ical

co%sulta%t #or t4e executio% o# t4e $ro2ect/ #air mar-et co%(itio%s/ $ro$er $ro2ect

$la%%i%g a%( t4e a;ility o# t4e $ro2ect to ge%erate sur$lus a%( service t4e (e;t

:it4i% t4e $erio( sti$ulate( ;y t4e ;a%- / t4e $ro$ose( $ro2ect o# !3s

Palamoor&ertili9ers Pvt. 't(. to esta;lis4 a ?88 TPD NP@ gra%ulatio% $la%t at a

cost o# Rs 1671 la-4 o% ?.8 acres o# la%( at Survey %o. ? Nela$atla illage /

C4outu$al !a%(al/ Nalgo%(a District is co%si(ere( Tec4%ically &easi;le a%(

Eco%omically ia;le.

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Date( 5a%< =811

Kraft Paper Project Report

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