Demand for TAN to Increase in India: Lindgren

Technical Ammonium Nitrate (TAN) is a key ingredient in pharmaceuticals, mining, explosives, power and steel industries; however, its highly explosive nature makes it very susceptible to its misuse for antisocial activities. Many countries have laid stringent rules to curb the malpractices in selling of ammonium nitrate to avoid its misuse against the society and India is now following the trend.

Indian Government has recently come up with stringent rulings that would make each producer and supplier accountable for every bag of chemical. Its three pronged approach - Identification, Traceability and Accountability - would mandate the producers and suppliers accountable for each bag of the chemical and also necessitate the need of valid license to deal with this product in whatsoever manner.

Ammonium nitrate sales went up in the country immediately after the announcement of the new ruling.

Current demand of TAN in India stands at 700 KMT against the total supply of 788 KMT which is met by the domestic production through indigenous manufacturing, and to a certain extent, through imports in loose bag form countries like Russia and Ukraine. It is extremely difficult to keep track of the quantities as well as trace them to the supplier and the final end user.

India has been importing Fertiliser Grade Ammonium Nitrate (FGAN) from Russia and Ukraine which are the major exporters globally for this chemical. Many countries have imposed a ban on FGAN due to security concerns. India has been importing considerable amounts at Vizag; however, after the recent announcement import in loose form has been banned and allowed only in bag form.

TAN: India Scenario
During a recent media interaction, Carl Anders Lindgren, President & Technical Advisor Deepak Fertilisers & Petrochemicals, shared that the organisation has a current capacity to produce 48.4 KMT and accounts for 37 per cent of domestic market share and 3.4 per cent of global production which stands at 153000 KMT. Lindgren sees an indirect correlation between the healthy demand of TAN with the growth of economy.

In domestic market, Deepak Fertilisers & Petrochemicals Ltd (DFPCL) competes with, Rashtriya Chemicals & Fertilizers Ltd (RCF), Gujarat Narmada Valley Fertilizers Corporation Ltd (GNFC) and National Fertilizers Ltd (NFL). DFPCL has continuously grown over the last 5 years to reach its current capacity of approximately 500 KMT. The company, however, is operating at 75 per cent capacity currently. DFPCL commissioned its first plant in 1991 based on Stamicarbon technology and added second plant based on GP technology and third plant in 2010 on Uhde technologies.

Lindgren observes healthy demand for TAN in the domestic market that will be driven by almost 8 per cent projected growth of mining and infrastructure sectors and significant demand highly un-fragmented explosives sector. Delving further on his observation, he elucidates that macroeconomic factors like growing GDP and increasing per capita purchasing power parity, are already driving the demand of energy steel and infrastructure that will provide significant thrust to the mining sector which includes - coal, iron, limestone and other minerals, and the need to scale up the required infrastructure of rail road and ports will provide thrust to the demand of TAN in country. “In my view demand of TAN will grow at the same 8 per cent rate projected for the growth of mining and infrastructure sectors in the country,” he says.

DFPCL is now looking at new capacity additions by increasing the total capacity to approximately 830 KMT to tap the increase in demand. The company is looking at enhancing upstream products in coming years.