Status of fertilizer production and factories in Bangladesh
IN 1898, Sir William Ramsey, discoverer of the inert gases, predicted the depletion of the world supplies of fixed nitrogen. In view of the rapidly rising population and increasing intensity of agriculture, he anticipated world disaster due to a fixed nitrogen famine by the middle of the twentieth century. Thanks to Fritz Haber, a great German scientist, that this did not happen due to his method of fixing nitrogen by reacting it with hydrogen to give ammonia. The universe is surrounded by atmosphere of air of which 79 percent consist of Nitrogen but the plant kingdom cannot absorb it from the free atmosphere directly and Ammonia injection in soils in cold countries and Urea addition tropical countries in soil was the most advancement achievement in human history to feed the hungry people by boosting up agriculture production to a large extent.
Bangladesh is now facing acute crisis of Natural Gas shortage. The Fertilizer and Power Plants are facing seasonal or complete shutdown putting the country in the grip of possible acute power and Fertilizer shortages in future.
The world economy has experienced financial turmoil followed by slump in growth with intermittent recovery during the past four years. The global grain supply-demand balance in the 2012/2013 marketing season may tighten significantly as a result of an anticipated fall in production of wheat and coarse cereals. World fertilizer nutrient (N+P2O5+K2O) consumption was estimated to reach 180.1 million tons in 2012, up by 1.9 percent over 2011. World demand for total fertilizer nutrient is estimated to grow at 1.9 percent per annum from 2012 to 2016. The demand for nitrogen, phosphate, and potash is forecast to grow annually by 1.3, 2.0, and 3.7 respectively during the period. Over the next five years, the global capacity of fertilizer products, intermediates and raw materials will further increase.
The world nitrogen fertilizer demand increased from 108.2 million tons in 2011 to 109.9 million tons in 2012, at a growth rate of 1.6 percent. It is expected to be around 116.0 million tons in 2016 at the annual growth of 1.3 percent. Of the overall increase in demand of 6 million tons nitrogen between 2012 and 2016, 60 percent would be in Asia, 19 percent in America, 13 percent in Europe, 7 percent in Africa and 1 percent in Oceania. Among the Asian countries, the bulk of the increase of world demand for nitrogen is expected in India (30 percent) and china (7 percent), followed by Pakistan (6 percent), Indonesia (5 percent), Bangladesh (3 percent), Vietnam (2 percent) and Malaysia (1 percent).
Supply of fertilizers are closely linked with food growth in the country and any shortage of fertilizer should be replenished by foreign import which is largely dependent upon country's available logistics infrastructure and bulk fertilizer movement control. Solid handling is a very difficult task and bulk shipment of urea, say 2.6 million tons is extremely difficult to schedule and fix ship duration of stay in unloading jetties of ocean going ships and bagging bulk urea from ship maintaining in the stipulated anchor time. Otherwise, high demurrage in foreign currency shall be very high to digest. Another difficult task shall crop up to ensure the correct weight of 50 kg of each bag and also to control various logistics activities. The urea in the present world is sold as a bulk material and pre-bagged urea though convenient for immediate domestic dispatch, may be too costly to bear when we are to import a large quantities.
With the growing price hike of bulk granular urea including freight cost of urea is increasing higher and higher and cumulative per ton of urea cost shall be substantially high within next five years.
Country needs currently about 2.6 million tons of fertilizer per year. The in-house production of BCIC is hardly 1.0 million tons and the production rate is rapidly diminishing due to the lack of proper maintenance for the last two decades, exodus of experienced people, lack of human planning and above all aging of plants and obsolete technology.
KAFCO plant also suffering from acute gas shortage and the country is being deprived of efficient and constant supply of Urea with minimum transport cost. (KAFCO's productivity is very good and reliable at country's need).
The on-going Shahjalal Fertilizer Factory (gas is available in that region) is expected to go for production from next June-2015. This may slightly ease the situation but again the lower productivity of the existing BCIC plants including KAFCO (due to gas shortage) shall not improve the over-all situation abruptly.
BCIC did not consider the requirements of revamping of the existing units, which would have been lucrative and most cost effective, and the installed capacity of the existing plants could have been increased considerably and the existing plants effective lives could have been increased at the same time. Many old plants of the world have increased the plant capacity and reliability through effective revamp options. India, our neighbor, has made considerable success in revamping a good number of Ammonia-Urea plants and also subsequently increasing the productivity and reliability of the plants and recovered the expenses within 2-5 years. Still Bangladesh can explore this possibility to get benefit of extra production at a cost effective revamp investment. While carrying out revamp options the owner must be in the driving seat and the pay off time may not exceed 5~6 years. This measure shall control the overall expenditure of the revamp activities and shall make the investment lucrative.
The existing BCIC plants, UFFL and PUFF are very old and running with obsolete technology and consuming excess amount of natural gas and running with lower productivity. BCIC can think now of making a new energy efficient Ammonia-Urea plant scrapping the existing two obsolete plants. BCIC can expect to have almost double the quantity of Urea with a new modern Ammonia-Urea plant with the same consumed gas quantities.
Apart from considering the revamp options and revamp activities of the existing fertilizer plants of the existing sick plants we have to think seriously regarding the alternate available raw materials of Fertilizer Productions in the country. The prospect of utilizing natural gas further for Ammonia, Urea production is bleak and now it is proper time to search for the alternative raw materials for Fertilizer production in the country. Coal is the optimum choice for Synthetic Natural Gas (SNG), which can make our country in self-sufficiency in Fertilizer Production as well as in Power Generation.
The writer is CEO, Universal Process Engineering