Deepak Fertilizers and Petrochemicals Corporation, manufacturer of technical ammonium nitrate (TAN) used as explosives in the mining and infrastructure industries, is studying the possibility of expanding the capacity of its TAN business in line with market demand.
The company, which already has an installed capacity 5 lakh tonnes at its manufacturing facility at Taloja near Mumbai, is looking at expanding its capacity by an additional 3-3.5 lakh tonnes as the industry is growing by 6-7 per cent per annum. 'Yes, we are studying the possibility considering the demand in the market,' said Carl-Anders Lindgren, President and Technical Advisor- TAN Business.
Company officials declined to comment further as the plan was too premature. According to industry officials such an expansion would involve capital expenditure of more than Rs,1,000 crore.
The possible expansion may come up at a greenfield unit, possibly at Paradip in Odisha where the company has land. The market is also there as most of the mining activity is concentrated in the eastern region. Besides, there is no space available at Taloja to expand the capacity. After all due approvals, such a plant can be commissioned in 24-36 months. In case the company decides to go ahead with the expansion, its TAN production capacity will go up to 8.50 lakh tonnes by 2016-17.
At present, the total requirement of TAN in the country is 7 lakh tonnes and all Indian manufacturers are supplying a maximum of 7.88 lakh tonnes. In 2013-14, the company produced 3.50 lakh tonnes of TAN. Other manufacturers include Rashtriya Chemicals and Fertilizers, Gujarat Narmada Valley Fertilizers and Chemicals and National Fertilizers Ltd. Till last year, up to 3 lakh tonnes of ammonium nitrate in loose form was imported from Russia and Ukraine posing security risk. But recent stringent rules by the Indian government have restricted the imports. As a result, all the domestic manufacturers have benefitted. 'We are very happy that India has taken harder decision on production, handling and transportation of ammonium nitrate. We are already adhering to the standards,' said Mr. Lindgren.