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

CHAPTERS
Particulars Executive Summary 1 Introduction 2 Promoters and Management 3 Market Scenario 4 Manufacturing Process 5 Site Particulars 6 " % 9 10 Schedule of Implementation and Statutor !learances Pro#ect !ost and Means of $inance Profita&ilit 'ssumptions and Pro#ect (conomics S)ot 'nal sis !onclusion ANNEXURES Pro#ect !ost and Means of $inance *e+enue Pro#ections !ost Pro#ections ,,, *a) Materials- Packaging- Po)er- !oal Manpo)er *e.uirements Preliminar / Pre,operati+e e0penses Pro#ected Profita&ilit Statement 1epreciation Interest / *epa ment Schedule Pro#ected 2orking !apital *e.uirement Pro#ected 3alance,Sheet Pro#ected $unds $lo) Statement 3reak,(+en 'nal sis 1e&t Ser+ice !o+erage *atio Internal *ate of *eturn 4e $inancial Indicators Securit Margin !M' 1ata APPENDIX 01 02 03 04 05 06 5and 1etails !i+il / 3uilding 2orks Plant / Machiner (lectrical (.uipment Misc6 $i0ed 'ssets 7echnical Specifications of (lectricals Page. No 1 4 6 9 26 30 31 33 42 51 52

1 2 3 4 5 6 " % 9 10 11 12 13 14 15 16 1"

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

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

EXECUTI E SU!!AR" Name o# com$a%y Registere( )##ice a%( Cor$orate )##ice Promoters* Names + ,ac-grou%( .age/ 0uali#icatio%/ ex$erie%ce1 Palamoor&ertilisers Private 'imite( $lat 202- 8ueens !ourt 'partment- Street,19- 9ima at :agar9 dera&ad 500029 Shri ;6 *a#endra Prasad Shri ;6 *a#shekar Shri !handra Shekar <uloori Shri Srini+asulu <uloori Particulars o# Pro2ect .Pro(uct/ i%stalle( ca$acity1 Pro2ect site locatio% a%( area Pro2ect Cost3!ea%s o# &i%a%ce Manufacture of :P4 fertili=ers 4007P1

S 6 :o6 "6- :elapatla >illage - !houtupal Mandal- :algonda 1istrict 7otal e0tent of area 4609 acres Particulars C)ST )& PR)5ECT 5and and 5and 1e+elopment 3uildings / !i+il 2orks Plant / Machiner 5a& (.uipment Misc6 $i0ed 'ssets !ontingenc ? 5@ 1eposits Preliminar (0penses Pre,operati+e e0penses 2orking !apital Margin Total !EANS )& &INANCE (.uit !apital 3ank 7erm 5oan T)TA' 1e&t (.uit *atio 1650 A 1 Amou%t i% Rs 'a-4

15600 %60600 565600 5600 14600 "2600 30600 16600 101600 153600
1671.88

"31600 1100600
1671.88

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

&i%a%cial Ratios

Dross '+erage 1S!* :et '+erage 1S!* I** for the pro#ect 3(P,Eperating !apacit B3
rd

16%0 261% 24603@ 59@

r of operationC

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

7erm loan is repa a&le o+er a period of 6 ears si0 months )ith a moratorium period of 6 months from the date of commercial operation Bthe door,to,door repa ment period is " ears 3 monthsC 7he rate of interest on term loan and on )orking capital is 15600@ per annum 6

Ca$acity utili9atio% Ra: !aterial Availa;ility

!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 of ra) materials are $ertili=ers and tenure6 016 7he main sources for the a+aila&ilit manufacturers of fertili=ers like

:agar#una

!hemicals- !oromandal $ertili=ers- 1eepak $ertili=ers- Indo,Dulf $ertili=ers / !hemicals- $ertili=ers / !hemicals 7ra+ancore*ashtri a !hemicals / $ertili=ers- 4*I3!E- II$!E- Du#arat $ertili=ers etc6 026 $ertili=ers are also a+aila&le through dealers6 036 Imports of fertili=ers are also permitted6 !ar-eti%g arra%geme%ts :P4 fertili=ers ha+e a read market and are proposed to &e sold through fertili=er dealers6

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

CHAPTER < 1 INTR)DUCTI)N

1.1 ,ac-grou%(

Palamoor$ertilisers Pri+ate 5imited Bhenceforth referred to as Palamoor$ertilisersC is incorporated as a pri+ate limited compan under the !ompanies 'ct- 1956 B:o61 of 1956C +ide !I: ;24233'P2011P7!0"4520 )ith its registered and corporate office at $lat 202- 8ueens !ourt 'partment- Street,19- 9ima at :agar- 9 dera&ad 5000296 7he compan has &een promoted & Shri ;6 *a#endra Prasad- Shri ;6 *a#shekarShri !handra Shekar <uloori and Shri Srini+asulu <uloori6 'll the promoters ha+e a rich e0perience as dealers of fertili=ers- Seeds / Medicine in 9 dera&ad and Meha&oo&nagar dist6

1.= Com$a%y*s Pro2ect 7he compan Fs pro#ect is for manufacture of :P4 fertili=ers )ith 4007P1 capacit 6 7he pro#ect site is on 4609 acres of land located at S 6 :o6 "6- :elapatla >illage- !houtupal Mandal- :algonda 1istrict6 7he sale deed has &een registered on 11th <ul 2011 for *s 36%5 lakh6 7he total &uilt,up area for the proposed pro#ect )ill &e "433 s.6meters6 7he pro#ect cost has &een estimated as *s6 1%31 lakh6 7he pro#ect is proposed to &e funded )ith 3ank 7erm 5oan of *s6 1100 lakh and e.uit component of *s6"31 lakh6 7he de&t e.uit ratio )orks out to 1650A16 7he term loan of *s6 1100 lakh is repa a&le o+er a period of si0 ears and si0 months )ith si0 months moratorium from the month of commercial operation6 7he door,to,door repa ment period is se+en ears 3 months6 7he returns are ade.uate to repa the term loan )ithin the stipulated period- the a+erage gross 1S!* for the pro#ect &eing 16%06 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#ect6 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 findings6

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

1.? !et4o(ology 7he follo)ing methodolog )as adopted & 'pitco for preparation of the stud report G 1etailed desk research on the fertili=er industr )ith special reference to its gro)th prospects6 Inter+ie) of the ke promoter6 Scrutini=ing .uotations for plant and machiner >erif ing the cost estimates of the ci+il )orks )ith reference to the &uilding plan and 3E8s B3ill of 8uantitiesC6 >alidation of costs Bfi0ed and +aria&leC and re+enues6 >erification of the credentials of the supplier of the principal Scrutin of the follo)ing papers relating to the pro#ect A aC !ertificate of incorporation of compan dated 16th Ma 2011 &C 5and 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 account6 7hrough the a&o+e methodologies the techno,economic +ia&ilit facilitating funding decision & the &ank6 stud report of MHs machineries

Palamoor$ertilisers Pri+ate 5imited has &een finali=ed and the findings are su&mitted for

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

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

=.1 T4e -ey $romoters o# t4e com$a%y are iC iiC iiiC i+C Shri ;6 *a#endra Prasad Shri ;6 *a#shekar Shri !handra Shekar <uloori Shri Srini+asulu <uloori

Pro#ile o# t4e Directors a1 S4ri U Ra2e%(ra Prasa( 9e has 20 ears of e0perience in the $ertili=ers and seeds marketing and distri&ution etc6 'geA 55Iears 8ualificationA 36com :et)orthA1000 5akhs 'ssociated !ompaniesA Danesh 'gro Products ;1 S4ri U Ra2s4e-ar 9e has 10 ears of e0perience in the $ertili=ers and seeds marketing and distri&ution etc6 and he is a partner in Durudatta 1e+elopers6 'geA 40 Iears 8ualificationA36' :et)orthA 300 5akhs 'ssociated !ompaniesA 3rinda+an (nterprises- Durudatta 1e+elopers6 c1 S4ri Sri%ivas 5uloori 9e has 15 ears of e0perience in the Medical 1ealerships 'geA 41 Iears 8ualificationA36' :et)orthA100 5akhs 'ssociated !ompaniesA Sai 1eep Medicals- *a#ara#es)ari Medicals (1 S4ri C4a%(ra Se-4ar 5uloori 9e has 14 ears of e0perience in the $ertili=ers and seeds marketing and distri&ution

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

etc6 'geA 36 Iears 8ualificationA M6com :et)orthA 100 5akhs 'ssociated !ompaniesA Manish agro 'gencies =.8= Tec4%ical Co%sulta%t P$P5 has 'ppointed Mr6 P Mohan as the technical consultant for the pro#ect M67ech B!hemical *eaction (ngineeringC Indian Institute od 7echnolog BII7C- !hennai 19"", 19"9 367ech6 Bchemical (ngineeringC ;ni+ersit of :agpur 19"2,19"" Mr6 P6 Mohan is took +oluntar (fficienc 7argeting- 8ualit retirement from MHS :i=am Sugars 5td6 >eteran in Eperations management- Pro#ect Management- (nerg Management / conser+ation!ontrol and 'dministration )ith more than 30 ears of e0perience in the field of sugar- distilleries- consultanc - pollution control- chemical e.uipment deign etc6 proficient in the plant and machiner selection and procurement6 1esigned and commissioned a sol+ent distillation column s stem Batmospheric +acuumC for MHs 5akshmi Saras)athi Erganics 5td6 Mi apur6 1esigned and commissioned B2C 7)o Multi effect e+aporation s stems for pharmaceutical effluent treatment at MHs S6S6 Erganics 5td6 'nd MHs6 Pra&ha+a Erganics pri+ate 5td6 Moderni=ed an old molasses &ased distiller to produce e0tra neutral 'lcohol for MHs 4irlampudi sugar Mills 5td6- Pithapuram6 !on+erted a &atch fermentation process to continuous at MHs6 S6>6 1istilleries 5td6- 3idar6 Impro+ed the efficienc of a distiller & re,designing and modif ing the anal =er column Btunnel cap designC internals at MHs *a+indra 1istilleries 5td6- 3idar6 1esigned and commissioned an ammonia a&ortion s stem for MHs 1r6 *edd 5a&s (0ecution of erection )ork of a ne) 50 45P1 (thanol distilleries on &ehalf of MHs <6P6 Mukher#ee ? 'ssociates- Pune

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

'd+isor and consultant for a ne) 100 45P1 (thanol distilleries on &ehalf of Sudanese sugar compan - 4hartoum on &ehalf of MHs6 'ssociates- Pune <6P6 Mukher#ee ?

7he appointment of the consultant for the pro#ect )ill add to the technical strength of the compan and ensure proper e0ecution and functioning of the pro#ect6 @ey Sta## !r. C. Su;rama%yam .Pla%t a%( !ac4i%ery Perso%%el1 Mr6 !6 Su&raman am ser+ed in +arious capacities from the ranks in $ertili=er !orporation of India6 9e ser+ed in *amagundam plant &efore opting for >oluntar retirement in the ear 20026 9e has (0perience 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 general6 9is rich e0perience in operations is an asset to the compan 6 =.? Promoters* Stre%gt43!a%ageme%t Ris7he promoters ha+e rich ears of e0perience in $ertili=ers and seeds marketing and distri&ution etc6 )hich )ould help them in running the unit successfull 6 7he promoterFs core understanding of the fertili=er market is primar ad+antage of this proposal6

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

CHAPTER < 7 !AR@ET SCENARI)

7.81 I%tro(uctio% &ertili9ers are su&stances that suppl plant nutrients or amend soil fertilit 6 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 fodder6 $ertili=ers are used in order to supplement nutrient suppl in the soil- especiall to correct ield,limiting factors6 $ertili=ers are applied to promote plant gro)thJ the main nutrients present in fertili=er are nitrogen- phosphorus and potassium Bthe KmacronutrientsFC i6e6 N<P<@ and other nutrients BLmicronutrientsFC in smaller amounts6 $ertili=ers are usuall directl applied to soil and can also &e spra ed on lea+es as foliar feeding6 6'mmonia is the main source of nitrogen6 ;rea is the main product for making nitrogen a+aila&le to plant6 Phosphorus is made a+aila&le in the form of super phosphate and di, ammonium phosphate6 Muriate of Potash BPotassium !hlorideC is used for suppl of potassium6 Macronutrient fertili=ers are la&eled )ith an :P4 anal sis6 $ertili=er is descri&ed & a three num&er designatorJ for e0ample- 20,20,106 7hese num&ers are percentages of three elementsA nitrogen- phosphorus- and potassium- respecti+el 6 7herefore- 20,20,10 fertili=er contains 20@ nitrogen- 20@ phosphorus- and 10@ potassium & )eight 7.8= Pro$erties o# &ertili9er !acro<%utrie%ts a1 NITR)>ENA It is an essential element of chloroph ll- the green chemical that ena&les plants to manufacture starches and sugar6 Man of the compounds in plants,amino acids- aromatic compounds etc must ha+e nitrogen6 It is the green element forcing softlush gro)th )hen used in e0cess6 :itrogen seems to ha+e the .uickest and most pronounced effect in plant gro)th6 ;1 PH)SPH)RUSA Phosphorus is an essential constituent of e+er li+ing cell6 Plants cannot sur+i+e )ithout phosphorus6 7he must ha+e a stead suppl to complete health gro)th6 Phosphorus impro+es crop .ualit and ield and also protects plant against diseases6 It helps o+ercome the effects of cold climate temperatures- drought and the en+ironmental stresses6

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

c1 P)TASSIU!A 'nnual applications of potash in solu&le form are essential- particularl if root crops are &eing gro)n6 It is an important catal st in photos nthesis- is essential for starch formation and the mo+ement of sugars in the plant and is important for seed formation6 It helps to form stiff stems and is essential in formation of tu&ers / roots6 It is +ital element in protein s nthesis and in the utili=ation of nitrogen & plants6 It &uilds strong- health stalks and retards crop disease6 2ithout potassium- crops do not ha+e the strength to &ear hea+ )inds- rains or e+en their o)n fruits6 2hen 4 fertili=ers are used- the crops are not onl ph sicall stronger &ut the mature faster6 7his makes potassium a +ital nutrient for plants6 9o)e+er- potassium is not effecti+e )ithout its co, nutrients nitrogen and phosphorus6 7.87 Categories o# #ertili9ers a1 Straig4t &ertili9ers suppl single nutrient either :itrogenB:C or PhosphorusBPC or PotassiumB4C6 (6g6 ;rea supplies 46@ :- Super phosphate pro+ides "@ P or 16@ P2E56 ;1 Com$lex #ertili9ers suppl more than one plant nutrient6 (6gA 1i,ammonium

PhosphateB1'PC contains 1%@ : / 20@ PB46@ P2E5C6 I$$!E is the leading pla er for comple0 fertili=er along )ith !oromandel International 5td6 It produces 10A26A26 / 12A32A16 comple0es6 c1 !ixe( #ertili9ers are ph sical mi0tures of t)o or more straight orHand comple0

fertili=ers to suppl particular com&ination of plant nutrients6 (6g Ene can &u 1'P and muriate of potash BMEPC and mi0 them in a ratio to get a fertili=er mi0ture containing a grade of 12A32A16 of :- P2E5 / 42E6 A(va%tages o# !ixe( &ertili9ers 16 7here )ill &e considera&le sa+ings in time and la&our in application to the cropsas all the nutrients re.uired are present in the same packing6 26 Ene can ensure &alanced nutrient application if suita&le mi0ture is chosen6 36 Micro,nutrients can also &e included in the mi0tures6

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

7.8? >lo;al &ertili9er !ar-et 1uring the recession period- )orld fertili=er consumption declined & "@ in 200%,09- to 1566" million metric tones BMM7C nutrients6 : fertili=ers )ere much less affected B,16%@C than P and 4 fertili=ers B,11 and ,20@- respecti+el C6 1rops in consumption )ere registered in all the regions e0cept South 'sia- (astern (urope- !entral 'sia and 'frica6 2ith the progressi+e economic reco+er - )orld fertili=er demand &egan to pick up in 2009,106 It has sho)n gro)th & 36"@ in this period- to 16265 Mt- )ith increases of 361@ and %6%@ for : and P fertili=ers respecti+el and 162@ decline for 4 fertili=ers6 2orld demand in 2010,11 )as forecast to increase & 46%@ to 1"064 Mt6 >lo;al &ertili9er Co%sum$tio% .I% !!T Nutrie%ts1 "ear =88B<86 =886<8C =88C<18 =818<11 .$ro2ecte(1 >lo;al &ertili9er Su$$ly 2orld fertili=er suppl is e0pected to increase & some 30 million tonnes representing an annual gro)th rate of 3@6 2orld nitrogen suppl is forecast to rise & 2361 million tonnes & 2011,12 compared to 200%,096 (ast 'sia- South 'sia- :orth 'merica and (urope are the largest producers of nitrogen6 2orld phosphate fertili=er suppl is forecast to increase & 663 million tonnes & 2011, 12 at a gro)th rate of 362@ per annum6 'reas )ith the largest production are (ast 'sia:orth 'merica and 'frica 7he suppl forecast for potash is that it )ill increase & 469 million tonnes to 4362 million tonnes during the ear 2011,12 at an annual gro)th rate of 264@ per annum6 7he main producing areas )ill &e :orth 'merica and 2est (urope6 N 10162 9963 10264 10464 P 3%64 3462 3"62 3%69 @ 2%69 2362 2269 2"61 Total 16%65 1566" 16265 1"064

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

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

T)P D)R'D &ERTI'IEER I!P)RTERSA

T)P D)R'D NITR)>EN &ERTI'IEER I!P)RTERSA

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

T)P D)R'D PH)SPH)RUS &ERTI'IEER I!P)RTERSA

T)P D)R'D P)TASH &ERTI'IEER I!P)RTERSA

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

T)P D)R'D &ERTI'IEER EXP)RTERSA

T)P D)R'D NITR)>EN &ERTI'IEER EXP)RTERSA

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

T)P D)R'D PH)SPH)RUS &ERTI'IEER EXP)RTERSA

T)P D)R'D P)TASH &ERTI'IEER EXP)RTERSA

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

7.8F I%(ia% !ar-et )vervie: India is the 3rd largest fertili=er producer in the )orld6 In India chemical fertili=ers pla ed 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 e0porta&le surpluses6 4eeping in +ie) the +ital role pla ed & 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 6 's a result- the annual consumption of fertili=ers in nutrient terms B:- P / 4 C- has increased from 06" lakh M7 in 1951,52 to 2256"0 lakh M7 in 200",0%- )hile per hectare consumption of fertili=ers- )hich )as less than 1 4g in 1951,52 has risen to the le+el of 116651 4g BestimatedC in 200",0%6 7hough su&stantial indigenous capacit has &een de+eloped in respect of nitrogenous and phosphatic fertili=ers- the countr also largel imported6 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 M76 7he $ertili=er / !hemicals 7ra+ancore of India 5td6 B$'!7C at !ochin in 4erala and the $ertili=ers !orporation of India B$!IC in Sindri in 3ihar 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,grains6 Su&se.uentl - green re+olution in the late si0ties 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 6 Presentl - there are 56 large si=e fertili=er plants in the countr manufacturing a )ide range of nitrogenous- phosphatic and comple0 fertili=ers6 Eut of these- 30 units produce urea- 21 units produce 1'P and comple0 fertili=ers- 5 units produce lo) anal sis straight nitrogenous fertili=ers6 :ine companies manufacture ammonium sulphate as & , product6 3esides- there are a&out "2 medium and small,scale units in operation continues to rel on imports for meeting its domestic re.uirements6 $urther- the ra) materials and intermediates for the same are

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

producing SSP6 7he total installed capacit of fertili=er production )hich )as 119660 lakh M7 of nitrogen and 53660 lakh M7 of phosphate as on 3160362004 has marginall increased to120661 lakh M7 of nitrogen and 56659 lakh M7 of phosphate as on 31603620096 7.8B Pro(uctio% Ca$acity a%( Ca$acity Utili9atio% Ta;le 7.8B.1 &ig. i% la-4 !T =88B< 86 :itrogen Phosphate 109600 3%60" =886<8C 10%6"0 34665 =88C<18 11966% 43652 >ro:t4 Rate 9@ 20@

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

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 units6 In case of phosphate- production in 1'P plants )as lo) on account of shortage of imported phosphoric acid and ammonia6 3ut during the respecti+el 6 7he domestic fertili=er industr has attained the le+els of capacit utili=ation compara&le )ith others in the )orld6 !apacit ;tili=ation of :itrogen / Phosphate is gi+en in the ta&le &elo)A Ta;le 7.8B.= :itrogen Phosphate ;rea Plants =88B< 86 9064@ 6"63@ 1006%@ =886<8C 9061@ 6162@ 10161@ =88C<18 9962@ "669@ :' ear 2009,10 the gro)th rate of production performance of nitrogen and phosphatic fertili=ers increased & 9@ and 20@

's for phosphate fertili=ers- apart from the constraints mentioned earlier- the actual production capacit utili=ation has also &een influenced & the demand trends6

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

7.86

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

2orld o+er- the agriculture sector en#o s su&stantial su&sidies in the form of producer support- general ser+ices support and consumer support6 'gricultural su&sidies in India are among the lo)est glo&all 6 $urther the input su&sidies Bof )hich fertili=er su&sidies are a partC form less than 10@ of the +alue of agricultural production6 7he ma#or demand determinants of fertili=er demand are input prices- output prices- area under 9I> seeds- area under irrigation- a+aila&ilit of credit and farm si=e distri&ution6 In fact the fertili=er consumption per hectare BhaC is often considered a pro0 for the le+el of moderni=ation of agriculture6 ' higher le+el of moderni=ation signifies assured irrigationuse of 9I> seeds and emplo ment of modern practices such as use of fertili=erspesticides and farm machiner 6 7he adoption of ne) technolog - mainl the 9I> seeds re.uires intensi+e use of fertili=ers and pesticides under ade.uate and assured )ater suppl 6 3ecause of the nature of cropping pattern and applica&ilit of fertili=ers on different crops- usages of fertili=ers are higher in the 49'*I$ season6 'round "6@ farmer households use fertili=ers during the 49'*I$ season compared )ith 54@ during the *a&i season6 ;se of fertili=ers is more common in 49'*I$ than in *'3I for all ma#or States e0cept 3ihar- Pun#a& 9ar ana- and ;ttar Pradesh6 7he details of Production- !onsumption and Imports of :- P and 4 are gi+en in the ta&les &elo)A Ta;le 7.86.1 Co%sum$tio% i% 'a-4 !T "ear 2005,06 2006,0" 200",0% 200%,09 2009,10 N 12"623 13"6"4 144619 15069 153690 Co%sum$tio% P @ Total 52604 24613 20364 55643 23634 216651 55615 26636 2256" 65606 33613 249609 666%0 29665 250635

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

Ta;le 7.86.= "ear 2005,06 2006,0" 200",0% 200%,09 2009,10 N 113654 1156"% 109 10%6" 11966%

Pro(uctio% i% 'a-4 !T Pro(uctio% P @ 42621 0 4561" 0 3%60" 0 34664 0 43652 0 Total 1556"5 160695 14"60" 143634 163620

Ta;le 7.86.7 "ear 2005,06 2006,0" 200",0% 200%,09 2009,10 N 136%5 266%% 366"" 3%644 306%5

Im$ort i% 'a-4 !T Im$orts P @ 11621 2"64" 13623 20669 12653 26653 2962" 336% 24699 25629 Total 52653 606% "56%3 101651 %1623

In the ta&le &elo) the consumption of :P4 mi0 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 :P4 Drade BK000 M7C 12"9665 'll Drades BK000 M7C 5149629 !omposition of :P4 mi0 >is,a,+is all grades 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@6 1uring 200%,09 onl consumption )as met & consumption )as met & indigenous production6 MEP BMuriate of potashC is not manufactured )ithin the countr 6 7here are no kno)n natural potash deposits in the countr 6 9ence 100@ of its re.uirement is imported6 Denerall - 30@ of the urea re.uirement and 30,40@ of the 1'P re.uirement of the 5"65@ of the indigenous production &ut during 2009,10- 65@ of the 246%5@ Sout4er% Eo%e o# I%(ia 24396%6 10641611 22693@

20

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

countr are met through imports66 ;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! 5td6- State 7rading !orporation BS7!C and Indian Potash 5td6 BIP5C6 1'P / MEP are permitted to &e imported under Epen Deneral 5icense BED5C & &oth pri+ate and pu&lic sector companies6 7his permission is gi+en & 1E$6 Im$orta%t Im$orters .I% =8111A Indian Potash 5td6- I$$!E- Muari Industries- Mangalore !hemicals / $ertili=ers- *ashtri a !hemicals / $ertili=ers and :agar#una $ertili=ers etc6 It is o&ser+ed that around 25@ and 23@ of the fertili=ers consumed in 'ndhra Pradesh and Southern Mone of India respecti+el are :P4 Mi0 fertili=ers6 7.8C Co%sum$tio% at State 'evel 'ndhra Pradesh is the second largest fertili=er consuming state in countr - ne0t to ;ttar Pradesh6 7he consumption of total fertili=er nutrients recorded a sharp increase of 2461@ from 169% 5akh M7 during 2004,05 to 2646 5akh M7 during 2005,066 'll the three nutrients recorded positi+e gro)th consumption during &oth the seasons e0cept 4 2E)hich recorded negati+e gro)th during the 4harif season6 7he consumption of :- P 2E5 and 42E at 164%0- 0664% and 06340 M7 recorded increase of 2"69@- 2062@ and 1664@ respecti+el during 2005,06 o+er 2004,056 :P4 use ratio changed marginall from 460A16%A1 during 2004,05 to 463A169A1 during 2005,066 4harifA *a&i share in total consumption continued to remain unchanged at 4%A52 during 2005,066 Per hectare consumption of total fertili=er nutrients increased from 1556% kg during 2004,05 to 19365 kg during 2005,066 7he under noted ta&le depicts the suppl during 200%,096 of :P4 mi0 fertili=ers in 'ndhra Pradesh

21

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

Ta;le 7.8C.1A Su$$ly (uri%g A$ril 86 to Se$ 86 i% A%(4ra Pra(es4 .@4ari#1 Sr.No. 16 26 36 46 56 66 "6 %6 !a%u#acturer <a a 5a0mi fertili=ers- 7anuku 4I!,:ida+ole- 2D 1ist !hemtech- Medak 4P* $ertili=ers P5- (D 1ist 3haskara $ertili=ers- 'nantapur 4othari- 4urnool- !hittoor- >i#a a)ada 3ala#i 'gri !hemicals- 'doni 3ala#i $ertili=ers- 4adapa Total NP@ !ixture .I% !Ts1 10"35 105"4 10%"" 16200 16"%5 6543 2060 4246% 11G=?7

Ta;le 7.8C.=A Su$$ly (uri%g )cto;er 86 to !arc4 8C i% A%(4ra Pra(es4 .Ra;i seaso%C NP@ !ixture .I% Sr.No. !a%u#acturer !Ts1 16 <a a 5a0mi fertili=ers- 7anuku 10423 26 4I!,:ida+ole- 2D 1ist %966 36 !hemtech- Medak "669 46 4P* $ertili=ers P5- (D 1ist 3"936 56 3haskara $ertili=ers- 'nantapur 12432 66 4othari- 4urnool- !hittoor- >i#a a)ada 4519 "6 3ala#i 'gri !hemicals- 'doni 14"1 %6 3ala#i $ertili=ers- 4adapa 23%62 96 9aritha $ertili=ers- 4eesara 1""31 Total 1=F88C

22

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

Tre%(A 7he total production of :P4 mi0 fertili=ers during 200%,09 in 'ndhra Pradesh stands at 2641 5akh M76 7.18 Co%sum$tio% i% Sout4er% I%(ia 7he state )ise consumption of :- P and 4 nutrients in Southern =one of India is ta&ulated &elo)6 7he consumption of these nutrients increases from 2006 to 200967husthe ta&le &elo) tells the state )ise consumption for the last three ears6 Ta;le 7.18.1A State Dise co%sum$tio% o# &ertili9ers (uri%g last t4ree years .H888 !T1 Sr. No. 1 2 3 4 5 6 State 'ndhra Pradesh 4arnataka 4erala 7amil :adu Pondicherr ' / : Island T)TA' =88G<8B 24%4606 14%56%3 20%692 1124696 44614 0661 F7?6.F= =88B<86 266"65% 150"636 20%630 10"5665 3"61" 06%" F?CG.C7 =886<8C 30"06%6 1%316%9 260690 1265622 2"69% 0655 G?FB.?

Tre%( 't 5"65@ capti+e production the production in southern =one )ould &e 3"613 5akh M7 B5"65@ of 6465" lakh M7Cand at 23@ as :P4 fertili=ers the production in southern =one )ould &e %631 5akhs M7 B23@ of 3"613 lakh M7C6

23

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

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)6 't 23@ :P4 mi0 the demand for :P4 fertili=ers & 2011,12 )ill &e 1564" 5akhs M76 Ta;le 7.11A Dema%( #or #ertili9ers i% Sout4er% Eo%e .H888 !T1 "ear 2010,11 2011,12 N 3392 3490 P 1""3 1%52 @ 1312 13%6 T)TA' 64"" 6"2%

7.1=

Dema%( Su$$ly >a$

's e0plained- :P4 mi0 fertili=ers constitute 23@ of the fertili=ers consumption in Southern Mone of India6 'ssuming the same trend )ill follo) in the ears to come the demand for :P4 mi0 fertili=ers )ill &e 1564" 5akhs M7 B23@ of Pro#ected 1emandC & 2011,12 as against current production of %631 5akhs M76 9ence the Dema%( Su$$ly ga$ of :P4 mi0 )ill &e around "615 5akhs M7 in southern =one of India )hich is much higher as compared to proposed Installed capacit of 162 5akhs M7 & Palamoor$ertili=ers6 7.17 !ar-et Dema%( Do+ernment emphasis in setting up of :P4 fertili=ers units6 3 o+erusing :itrogen fertili=ers like urea the soil is getting depleted6 Soil needs &alanced use of :P4 fertili=er for getting higher ields for longer duration6 In 2010,11- sales of comple0 fertili=ers containing +arious properties of nitrogenphosphorus- potash and sulphur registered 20@ increase )hereas con+entional fertili=ers such as ;rea and 1i,ammonium phosphate recorded lo)er gro)th 66"@ and 963@ respecti+el )hereas in the case of MEP it registered B,C166%@ gro)th6 7he demand gro)th for mi0edHcomple0 fertili=ers has therefore &een outstripping the corresponding gro)th for straight fertili=ers6

24

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

7.1? &i%a%cial Results o# some ma2or &ertili9er !a%u#acturers Rs i% cr S' C)!PAN" 1 :agar#una $ertilisers / !hemicals4akinada !oromandal fertili=ers>ishakhapatna m 1eepak $ertilisersMaharastra Indo,Dulf $ertili=ers / !hemicals !orporation 5imited ;ttar Pradesh Mangalore !hemicals / $ertili=ers 5imitedPanam&urMangalore $ertilisers / !hemicals 7ra+ancore 5imited- !ochin *ashtri a !hemicals / $ertilisers 4*I3!E Du#arat State $ertilisers / !hemicals =88B<86 =886<=88C =88C<=818 NET NET NET NET NET NET SA'ES PR)&IT SA'ES PR)&IT SA'ES PR)&IT 2-193659 22649 2-3"1691 32641 1-9%"691 6663"

3-"996"%

2096"6

9-53%691

49663% 6-45664%

46%620

3 4

1-052614

10062"

1-4146%1

14%6"0 1-2%9640

1"2605 2-092610

10-24169" 2-04"65" 10-%""69% 1-64"696 %-23%605

1-625639

40646

2-469662

2%61" 2-0"5665

56649

%"9642

%69"

2-1466%0

42695 2-0%163"

,1036%

" % 9

5-159656 1-35%662 3-555691

15%615 209620 23%645

%-3"%624 1-512640 5-%%466%

21165% 5-656666 250613 1-532619 499636 4-01"663

2346%" 26963" 25464"

25

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

7.1F >e%eral Su;si(ies N,S Sc4eme/ e##ective #rom 81.8?.=818A ;nder :utrient 3ased Su&sid Scheme- su&sid is pro+ided on fertili=ers &ased on their :- P- 4 or S content6 7his )as as against the earlier s stem- )here the su&sid )as limited to the specific products B;rea- 1'P- MEPC )ith no linkage to nutrient content6 Su&sidies are gi+en & the Do+ernment of India onl to the manufacturers and importers of straight fertili=ers B;rea- 1'P- MEP- SSP- 7SPC and comple0 fertili=ers6 Manufacturers of :P4 granulated mi0ed fertili=ers are not entitled to su&sid since the )ill &e sourcing su&sidi=ed fertili=ers from the manufacturersHimporters6 Price 7he price of urea is fi0ed & the Do+ernment of India6 7he prices of other fertili=ers are market determined- though the DEI e0ercises control in case of a&normal hike in the prices6 Usage :P4 fertili=ers are mainl used for padd crops- chilies- +egeta&les and horticulture6 7he predominant use is in padd crops6 7he categor of :P4 used )ill &e related to soil condition and the crop gro)n6

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

CHAPTER < ? !ANU&ACTURIN> PR)CESS

?.81 N.P.@. >ra%ulatio% Process i% ;rie# 7he process is kno)n as $ertili=er Mi0ing and Dranulation6 Straight fertili=ers like ;rea1i,'mmonium Phosphate- Single Super Phosphate- Mature of Potash containing :itrogen- Phosphorous- Potash etc6 are thoroughl process6 7he solid ra) materials like 1'P- SSP- MEP- ;rea- $iller compounds like 1olomite!hina !la etc6 are proportioned B)eighedC and premi0ed in a 1ou&le Paddle Mi0er and fed to *otar Dranulator )here agglomeration is initiated6 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 granules6 1ue to the tum&ling action in the *otar Dranulator- formulation of )et small granules starts6 'fter ensuring the re.uired si=e of granules & ad#usting )ater sprinkling in the Dranulator- the )et granules are sent into the *otar granules are dried in a *otar 1r er & 1r er6 7he moist and plastic means of 9ot 'ir Denerator6 !ooling is mi0ed mechanicall in a pre, determined ratio and granules are formed as the end product through the Dranulation

performed in a *otar !ooler that is +er similar to the *otar 1r er6 7he o+ersi=e materials are crushed and rec cled to the Dranulator along )ith the undersi=e materials6 7he product si=e fraction is sent for &agging6 7he process air from +arious e.uipments of the Plant is taken into de,dusting s stem and is +ented to atmosphere through Stack B!himne C6 ?.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 3agging Section Pollution !ontrol Section

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

?.87 Ra: !aterial Receivi%g Sectio% 7he different ra) materials- namel ;rea- MEP- 1'P- SSP- 7SP and $illers like

D psum 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 feeding6 Ra: !aterial &ee( Sectio% 7he ra) materials are )eighed in the )eigh &elt con+e ors in the desired proportion and then fed into the respecti+e $eed 9oppers B3 nos6 of capacit 5 M7 eachC using front pa loader or & manual feeding6 7he materials are then transferred to the *a) Material $eed (le+ators B3 nos6C using *a) Material $eed !on+e ors B3 nos6C6 7he materials from the (le+ators are fed into different 9oppers B6 nos6 of capacit 30 M7 eachC6 1epending on the product &lend- these 9oppers are loaded for se+eral hours of operation re.uirement6 $rom the 9oppers the materials are fed at the specified rate through 2eigh $eeders B6 nos6C to the !rusher through Mi0ed *a) Material !on+e or6 !rushed outlet material is fed to the 1ou&le Paddle Mi0er6 7he Paddle Mi0er outlet material is fed to Dranulator $eed (le+ator through Mi0er 1ischarge 3elt !on+e or6 7he Dranulator $eed (le+ator lifts the entire material to the Dranulator floor for further processing6 ?.8? >ra%ulatio% a%( !ai% Process Sectio% 7he material at the outlet of Mi0er 1ischarge !on+e or is fed to the Dranulator through a 3ucket (le+ator named Dranulator $eed (le+ator6 7he Dranulator is a *otar 1rum Bsi=e 262 m dia 0 "65 m longC designed to increase the si=e of the incoming seed & adding la ers during the rolling motion6 In the process densification and roundness of the granules are achie+ed6 Sparger pipes are located in the Dranulator for spra ing )ater6 7he proportion of )ater spra )ill &e ranging from 2@ to 12@ depending upon the grade of :P4 granular fertili=er to &e produced6 $rom the Dranulator the material ha+ing appro06 10@ moisture is dropped to the *otar 1r er6 7he 1r er is a *otar 1rum Bsi=e 262 m dia 0 16 m longC- )here the moisture is e+aporated from the material through heat transfer )ith co,current hot air flo)6 9ot 'ir Denerator Balso called $urnaceC using fire)ood or agricultural refuse is used for

28

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

generating hot air of 10000m3 H hour of air up to 250 ! )hile inducing atmospheric air into the Denerator6 7he $urnace is a &o0 co+ered )ith a lining of high 'lumina &ricks from inside6 'ir is sucked & an induction fan i6e6 1r er $an through the *otar 1r er6 7he flo) of hot air and )et granules in the *otar 1r er are co,current and dung the tra+el period of nearl % minutes in the 1r er- the )et granules &ecome hot and dr and &ecome free flo)ing ha+ing temperatures ranging from 65 to "0!6 7he granules also &ecome hard during the course of dr ing6 7he product moisture content is usuall reduced to a target of 1@ e0it dr er6 'fter the successful granulation and dr ing process the semi,finished product is transferred to the cooling section of the drum6 7he material from the 1r er falls on the 7ransfer 3elt !on+e or )hich feeds the material to a *otar !ooler6 7he !ooler is also a rotar 1rum similar to 1r er Bsi=e 262 m dia 0 12 m longC6 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 $an6 In this process &oth cooling and contraction of the material takes place6 'll the three *otar 1rums i6e6 Dranulator- 1r er and !ooler are slightl inclined so that material passes through them & gra+it 6 7he 1r er and !ooler are fitted )ith lifter plates inside the shells so that the granules passing through 1r er and !ooler are properl dried )ith hot air and cooled )hile passing through these t)o shells6 7he outlet product temperature depends on the condition of the air used for cooling6 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 0 4 m longC 6 7he cooled granules from the *otar !ooler are of three si=es i6e6 under si=e- product si=e and o+er si=e6 7hese granules are screened in the *otar Screen6 9ere the fines and o+er si=e granules are separated6 7he granules of much smaller si=e than desired are sent for the rec cling process )ith the help of the con+e or &elt6 7he o+er si=e materials are collected and transferred to the (le+ator )ith the help of the con+e or &elt6 7he (le+ator in turn sends these o+er si=ed granules to the *oller !rushers for the repeat of the production process6

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

?.8F &i%is4e( Pro(uct ,aggi%g Sectio% 7he on si=e product from the *otar Screen through a Product !on+e or is fed to 3ucket (le+ator )hich in turn feeds Product 3ins6 7he product is &agged in 50 kg 91P( &ags after thorough inspection & Semi 'utomatic 2eighing / 3agging Machines and Stitching Machines6 7he finished material is finall stored in the N$inished Doods ShedO manuall 6 ?.8G Pollutio% Co%trol Sectio% 7he Plant contains Stack and Pollution !ontrol (.uipment for guarding the en+ironment and a+oiding material loss6 7he 1r er air B25000 m3H hourC and !ooler air B25000m3HhourC are treated through dedicated ! clones for remo+al of dust and the dust free air is sent to Stack B!himne C6 'll the collected dust particles are rec cled &ack in the process6 ?.8B >e%eral 7here is no chemical reaction at all in the a&o+e manufacturing process6 7he process in+ol+es onl a ph sical mi0ture of the ra) materials )ith different ingredients com&ining together to form granules of homogeneit as per the scheduled :P4 ratio6 't an point of time onl a single product mi0 can &e manufactured & the unit6

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

CHAPTER < F SITE 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;leA Sc4e(ule o# $ro$erty S 6 :o6 94- :elapatla >illage - !houtupal Mandal:algonda 1istrict Date o# registratio% o# sale (ee(s alue o# co%si(eratio% 'a%( Develo$me%t 7otal e0tent of area 4609 acres 11th <ul 2011 *s36066"50H, *egistration / stamp chargesA *s 33500H, 7he compan proposed to spend around 45 laks around cutting of tress- &ushes- 3oulders- 5and 5e+eling and filling6 2e ha+e taken an amount of *s61166 lakhs on land de+elopment on Particulars o# co%%ectivity conser+ati+e &asis6 60 kms from 9 dera&ad 6 kms from the main road B:999 dera&ad, 'ocatio% o# %earest $o:er statio% Dater availa;ility >i#a a)ada 9igh)a C :earest po)er su&,station is 5 kms a)a from the sight 'de.uate &ore,)ell )ater is a+aila&le to meet the minimum re.uirements of the compan

31

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

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 schedule6 7he pro#ect is estimated to &e completed & Sep 2012 and the plant )ill commence its commercial operations from 1 st Ect 20126 7he implementation schedule is represented in the follo)ing chartA S.N Descri$tio%
5a% 1= &e; 1= !ar 1= A$ r 1= !ay 1= 5u% 1= 5ul 1= Aug 1= Se$ 1= )ct 1= Nov 1= Dec 1=

5and 1e+elopment $inancial !losure 3uildings / !i+il 2orks Machiner Erder Machiner (rection / !ommissioning 7rial *un !ommercial production /

3 4

5 6

"

32

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

TER! ')AN SCHEDU'E $irst 1is&ursement !ommencement of 1st installment 5oan !losure

<an 2011 'pr 2013 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= Sl 01 02 03 04 05 06 0" 0% 09 10 11 12 13 Statutory Cleara%ces Particulars 5and !on+ersion :o o&#ection certificate *egistration under single )indo) Site / 3uilding Plan 'ppro+al !onsent for esta&lishment Po)er $easi&ilit and Po)er !onnection >'7 *egistration (0cise *egistration 5icense to manufacture P': :o6''D!P0519D !onsent for Eperations Dround 2ater !learance 'ppro+al of factor plan Aut4ority *1E :algonda 1ist6 Dram Pancha at Do'P Single 2indo) 9M1' 'P Pollution !ontrol 3oard 'P Po)er distri&ution co6 !ommercial 7a0es 1ept6 GDo'P DEI !entral (0cise 1ept6 !ommissioner of 'griculture I7 1ept6 'P Pollution !ontrol 3oard 1eput 1irector Dround 2ater :algonda 1irector of $actories- 9 dera&ad

33

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

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

B.1 Pro2ect Cost

7he pro#ect cost for the esta&lishment of the 400 7P1 :P4 fertili=er granulation plant is estimated as *s 1%31 lakh6 '&out "6 @ of the pro#ect cost is on account of ci+il )orks and plant and machiner 6 7he component )ise cost is ta&ulated &elo)6 7he cost of the pro#ect also includes the interest during construction amounting to *s669645 5akhs6 Ta;le F.1A Pro2ect Cost Descri$tio% 16 5and and 5and 1e+elopment 26 3uildings / !i+il )orks 36 Plant / Machiner 46 5a& (.uipments 56 Misc6 $i0ed 'ssets 66 !ontingenc ? 5@ "6 1eposits %6 Preliminar (0penses 96 Pre,operati+e (0penses 106 Margin Mone for 2orking capital Total B*s6 5akhsC Amou%t

15600 %60600 565600 5600 14600 "2600 30600 16600 101600 153600
1671.88

34

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

B.=

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

7he pro#ect is proposed to &e financed )ith a mi0 of de&t and e.uit 6 7he de&t e.uit ratio proposed is 1650 A 16 7he de&t )ill &e in form of 7erm loan from 3ank amounting to *s6 1100600 5akhs6 7he promotersF contri&ution )ill &e in the form of e.uit 6 7he means of finance is ta&ulated &elo)6 !ea%s o# &i%a%ce Descri$tio% 16 (.uit from Promoters 26 7erm 5oan Total B.7 Pro2ect Cost ali(atio% .Rs 'a-41 Amou%t

"31600 1100600
1671.88

7he component,)ise +alidation of pro#ect cost is furnished &elo)A B.7.1 'a%(

7he !ompan has ac.uired 'cre 4609 land for the purpose of the pro#ect at S 6 :o6 "6:elapatla >illage - !houtupal Mandal- :algonda 1istrict- 'ndhra Pradesh6 7he Pro#ect site is a&out 60 4M from 9 dera&ad6 7he site is )ell connected & road net)ork and the re.uired .uantit of po)er too has &een assured6 Manpo)er too is a+aila&le in close +icinit 6 E+erall the pro#ect location is considered to &e suita&le for the purpose6 7he land cost )ith registration / stamp charges comes to *s 3606 lakh6 7he land de+elopment cost is estimated at around *s6 1166 5akh6 B.7.= Civil a%( ,uil(i%g Dor-s

7he cost of ci+il )orks has &een di+ided into 6 !ategories6 !omponent )ise cost has &een ta&ulated &elo)6 7he 3E8 estimates of ci+il )orks ha+e &een prepared & MHs 4ulkarni !onsultant- :ara anaguda- 9 dera&ad 5000296 7he cost of !ai% Pla%t S4e( a%( !ac4i%e &ou%(atio%s has &een estimated as *s6 "54656 5akh6 7he Shed )ill house main plant- finished goods and ra) material6 7he .uantities of all )orks ha+e &een estimated and the rates for +arious )orks ha+e &een used for estimation of cost6 7he rates considered for estimation are found to &e as per present market standards6 7he cost estimates are found to ade.uate and reasona&le6

35

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

Civil a%( ,uil(i%g Dor-s Summary I II III I> > >I

.Rs. I% la-41 T)TA' BF?.FG 7G.8B 7B.?8 =8.1F ?.68 B.1?

Particulars M'I: P5':7 S9(1 ':1 M'!9I:( $E;:1'7IE:S E$$I!( 3;I51I:D H '1MI:BDP1C (Q7(*:'5 2E*4S 5'3E;* 35E!4 2(ID93*I1D( H S(!;*I7I ;7I5I7I 35E!4 $E* D(:(*'7E*S ':1 7*':S$E*M(*S

6G8.1= Rou%(e(A 6G8.88 Similar methods Bas applied for Main Plant Shed and Machine foundationsC ha+e &een used for estimation of cost for Effice &uilding- 5a& &lock- Denerator and Panel room and Securit office6 7he rates used for estimates are found to &e reasona&le6 7he cost of de+elopment of the Effice &uilding is estimated at *s 3660" lakh6 7he cost of e0ternal )ork includes construction cost of pa+ement for factor premisesapproach road- compound )all and gates and pro+ision of )eigh&ridge inclusi+e of all ci+il )ork and cost of M / 5 for pro+iding ca&les- street lights / poles along roadscompound )all- securit lights etc for e0ternal electrification 7he total cost of ci+il and &uilding )orks has &een estimated at *s6 %60612 5akhs6 7he cost estimates are prepared &ased on the 3E8 of the &uilding and ci+il )orks6 7he rates adopted for calculation of cost of +arious ci+il )orks are found to &e as per present market condition6 7he o+er all cost of construction is found to &e ade.uate and reasona&le6 'PI7!E has re e+aluated the entire 3o.- and came out )ith the a&o+e figures 7he detailed estimates of !i+il and 3uilding 2orks are furnished in 'ppendi0 26

36

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

B.7.7 S. No. 1 2 3 4 5 6 " % 9 10 11 12 13 14 15 16 1" 1% 19 20 21 22

Pla%t a%( !ac4i%ery E0ui$me%t Iua%tity !a2or Tec4%ical S$eci#icatio% !apacit 57- si=e 3000mmQ1500mmQ500mmstraight height Q 1500mm conical height 600mm )ide Q 6000mm long )ith head / tail pulle 310mm dia !ontinuous discharge t pe- !apacit 25 7P9height 12000 mm centers !apacit 307 each- si=e 3000mm dia Q 3000mm c lindrical height Q 2500mm conical height 600mm )ide Q 2500mm centers- head / tail pulle of 310mm dia 600mm )ide Q 15000mm centers )ith supporting steel structure 9ea+ dut t pe- si=e 600mm )ide Q 600mm rotor dia K ;F t pe- si=e 1600mm Q 5000mm long 600mm )ide Q 4000mm centers )ith supporting steel structure !ontinuous discharge t pe- capacit 40 7P9height %000mm center !ontinuous discharge t pe- si=e 2200mm dia Q "500mm long !apacit 10000m3Hhour )ith dri+e !ontinuous discharge t pe- si=e 2200mm dia Q 16000mm long 600mm )ide 9* grade &elt- "500mm centers !ontinuous discharge t pe- si=e 2200mm dia Q 12000mm long !ontinuous discharge t pe- capacit 40 7P9height %000mm center $or screening granules- capacit 25 7P9- si=e 1000mm )ide Q 4000mm long !ontinuous discharge t pe- si=e 2200mm dia Q 6000mm long !apacit 1000 liters 600mm )ide- 20000mm centers )ith supporting steel structure 600mm )ide- 20000mm centers )ith supporting steel structure !ontinuous discharge t pe- capacit 40 7P9height 11000mm center

7he plant and machiner that are proposed to &e procured are ta&ulated &elo)6

$eed 9oppers $or (le+ator $eed !on+e ors (le+ator $eed !on+e ors 3in $eed (le+ators 3ins for Ma#or *a) Materials 2eigh $eeders Mi0ed !on+e ors !rushers Paddle Mi0er !on+e or 7o $eed Dranulator Dranulator $eed (le+ator *otar Dranulator 1ilution 3lo)ers *otar 1r er 1r er to !ooler 3elt !on+e or *otar !ooler Screen $eed (le+ators *otar Screen !oating 1rum Storage tank *ec cle !on+e or Product !on+e or Product (le+ator

6 3 3 6 6 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

37

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

S. No. 23 24 25 26 2" 2% 29 30 31 32 33

E0ui$me%t Product Silos 'utomatic 2eighing / 3agging Machine Stitching Machines 1r er ! clone 1ust !ollector 1 er $an !ooler ! clone 1ust !ollector !ooler $an !himne 9ot 'ir Denerator Structural Steel Staging Painting

Iua%tity 2 2 2 2 1 2 1 1 1 5S 5S

!a2or Tec4%ical S$eci#icatio% !apacit 30 7 each- si=e 3000mm dia Q 3000mm !apacit 400H500 &agsHhour of 50 kg &ag 2ith slat con+e or >ertical t pe- si=e 1%00mm Q 4500mm height !apacit 25000m3Hhour )ith dri+e >ertical t pe- si=e 1%00mm Q 4500mm height !apacit 25000m3Hhour )ith dri+e 1600mm dia at the &ottom Q 1%00mm dia at top Q 30000mm height 7o heat 10000m3Hhour air

'll the e.uipments are proposed to &e procured from MHS <a a $a&rication 2orks:acharam- *6*61ist- 9 dera&ad6

7he Machiner supplier MHS <a a $a&rication 2orks is suppl ing the mHc on turnke &asis )hich includes &ought out items like 16D6set- 7ransformer- (lectrical items- $ire $ighting / core e.uipment like *otar Dranulator- *otar 1r er )hich are outsourced from standered Supliers6 7he prices .uoted for the machiner to &e supplied & the MHS <a a $a&rication 2orks is 591610 5akhs6 7he promoters ha+e further negotiated the prices of machiner and reduced it to 565 lakhs6 7he !ompan has also collected .uotations from other suppliers and ha+e short listed <a a $a&rication &ased on the technical specification- price and credential of the supplier6 7he costs of the e.uipments are found to ade.uate and reasona&le6 7he e.uipment )ise &reakup of the cost is pro+ided in A$$e%(ix 7.

38

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

Cost Comparison Statement: Sl. Descri$tio% No. 1 400 7P1 :P4 MHs <a a MHs6'&hishek (ngineering / chemicals Plant $a&rication 5imited- 'mara+ati- Maharastra6 9 dera&ad *s65%0 lakhs *s6565600 lakhs Bdoes not include 16D6 Set / $ire fighting 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 <a a $a&rications- the supplier of machiner is furnished &elo)A <a a $a&rication 2orks B1esigners- (ngineers- !ontractors and $a&ricatorsC )as incorporated in the ear 1990 & Sri Maturu Surender *edd 6 9e is a technolog graduate from S> ;ni+ersit 6 7he )orkshop and factor are located at- :acharam and Mallapur Industrial areas- 9 dera&ad6 Ex$erie%ce 7he compan has 21 ears e0perience in manufacturing of chemical- pharmaceutical e.uipments and other process plant e.uipment6 7he also ha+e e0perience in all t pes of hea+ steel fa&rications )orks and Pre,(ngineered 3uildings BP(3C6 7he ha+e successfull completed man pro#ects- )hich are undertaken on turnke &asis6 7he ha+e good infrastructure- highl e0perienced- )ell .ualified )ork force- d namic management and &etter planning )hich are the assets of the compan to fulfill time, &ound commitments )ithout compromising on .ualit 6 7he manufacture e.uipments as per national and international standards such as IS 2%25- P15500- 'SM( S(! >III 1I> 1/26 7heir &road spectrum of clientele spans o+er the +arious industries like , 16 !hemical industr 26 Pharmaceutical industr 36 Pollutions control 46 Pre (ngineering 3uildings 56 9ea+ steel fa&rications 66 !ommercial industrial kitchen and hospital e.uipments6

39

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

C4emical Pla%t E0ui$me%tA *eactorsA SS- M6S- *u&&er 5ined and 5ead 5ined *eactors up to 10 45 !apacit 6 9eat (0changersA SS- M6S- !opper 7u&e 9eat (0changers up to 100 S.6m6 !apacit 6 Storage 7anksA SS- M6S- *u&&er 5ined Storage 7anks up to 100 45 !apacit 6 !ondensers H !hillers SS- M6S- !opper 7u&e !ondensers up to 50 4gHs.6cm Pressure 7est6 (+aporator- (conomi=ers- *e,3oilers- 'gitators -1istillation !olumns -!olumn Internals 5eaf $ilters- :otshe $ilters- 'utocla+es- 1rum $lakers etc6 Pharma (.uipments 7ra 1r ersA !apacit 12 to 200 7ra s of 32RQ16RQ1625R- $luid 3ed 1r ers*otar >acuum 1r ers- *otocone >acuum 1r er- (0tractors- 1ou&le !one 3lendersMulti Mill- Sifters- Mass Mi0er- $luid 3ed !oater- !oating Pan- *oll !ompactor *apid Mi0er Dranulator-Pul+eriser-Micro Pul+eriser 6etc6 Past customers 16 3akelite 9 lam 5imited 2 9 dera&ad 1istilleries 36 Man small chemical firms in Mallapur area of 9 dera&ad 7he ha+e t)o ancillar unitsA 16 MHs *ama (ngineering )orks- :acharam and 26 MHs 'nil !hemicals- Mallapur- 9 dera&ad6 7ogether the make all the a&o+e e.uipments6 Since the are making similar products and general fa&rication e.uipment- it is not +er difficult for them to take up fertili=er plants6 Most of the .uoted e.uipment is fa&ricated in their premises onl 6 9o)e+er- some core e.uipment like *otar Dranulators- *otar 1riers- Special castings etc6 are outsourced from Standard supplier located in Mum&ai6

40

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

'ist o# !ac4i%es a%( ot4er I%#rastructure. 165athe and !utting Machines 26!ranes and other e.uipment 362elding and (lectrical Machines6 &i%a%cial Ca$a;ility6 <a a $a&rication )orks is ha+ing an annual turno+er in e0cess *s 10 crores per annum and the ha+e )orking capital limits of *s 200 lakhs from 3anks6 B.7.? 'a; E0ui$me%ts

7he 5a& e.uipments that are proposed to &e procured from <a a $a&rications at the cost of 5 lakhs B.7.F !iscella%eous &ixe( Assets

7he Miscellaneous fi0ed assets that are proposed to &e procured are office furnitureinterior and communication e.uipments6 7he total cost for the miscellaneous fi0ed assets is arri+ed at *s6 14600 5akhs6 7hough 8uotations for the same is .uoted at 2463 laks6 'PI7!E assessed that the cost can &e restricted to 14 lakhs is ade.uate and some of the unproducti+e purchases can &e eleminated6 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 e0penditure arising from escalation in the actual cost of &uildings / ci+il )orks and other fi0ed assets6 9ence- a cushion for the pro&a&le additional e0penditure is pro+ided & )a of contingenc cost ?5@ on fi0ed assets6 7his )orks out to *s"2 lakh as underA .Rs i% la-41 Descri$tio% 3uildings / !i+il 2orks Plant / Machiner 5a& (.uipment Miscellaneous $i0ed 'ssets Total !ontingenc !ost ?5@ B.7.B De$osits Cost %60 565 5 14 1??? "2

41

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

Securit 1eposit has &een considered at *s6 30600 5akhs6 7he cost is to)ards o&taining po)er connection and other appro+als6 7he cost allocation is found to &e ade.uate6 B.7.6 Prelimi%ary a%( Pre<o$erative Ex$e%ses

7he preliminar and pre,operati+e e0penses are arri+ed as *s6 11"620 5akhs6 7he &asis of arri+ing at the cost is ta&ulated &elo)6 7he pre,operati+e e0penses ha+e &een capitali=ed )ith fi0ed assets and depreciated o+er the ears6 Particulars PRE'I!INAR" EXPENSES !ompan Incorporation P* Preparation !osts 5oan 'c.uiring !osts T)TA' PRE<)PERATI E EXPENSES 7ra+elling H 'dministrati+e e0penses 7echnical 4no)ho) $ees Interest during construction Insurance 1uring !onstruction ? 0625@ 0f !i+il- P/M 7rial Production costs T)TA' >RAND T)TA' B.7.C !argi% !o%ey #or Dor-i%g Ca$ital at 30@ of )orking capital amounting to !o%t4s alue

5S 5S

2650 2650 11600 1G.88

10600 5600 69645 14625 2650 181.=8 11B.=8

4 5S

7he )orking capital for the first full ear B2012,2013C of operation has &een assessed as *s6510600 5akh and the margin mone *s6 153600 5akh has &een capitali=ed to the pro#ect cost6 7he total pro#ect cost has &een arri+ed at *s 1%31 5akh after pro+iding for contingenc ?5@ on cost of fi0ed assets6 'n further increase in pro#ect cost during the implementation of the pro#ect )ill &e &orne & the promoters6 E+er all the cost of pro#ect is found to &e ade.uate and reasona&le6

42

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

CHAPTER < 6 PR)&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 :P4 fertili=ers granulation plant is 400 7P1 for 3 shifts6 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 maintenance6 7he unit is scheduled to run for 300 da s a ear6 7he annual capacit is therefore reckoned as 120-000 M76 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=ation6 $i+e Percent increase in capacit utili=ation has &een considered e+er ear )ith a ma0imum of %0@ capacit utili=ation during the de&t tenure6 7he a+erage capacit utili=ation of the industr is around 90@6 6.= Pro(uct !ix

7he follo)ing product mi0 ratio has &een considered for the purpose of economic anal sis6 Product Mi0 ratio Pro(uct .>ra(e1 2%A2%A00 1"A1"A1" 15A15A00 20A20A00 20A10A10 1%A1%A09 5A15A15 10A26A26 14A35A14 15A15A15 12A32A16 22A00A11 19A19A19 T)TA' Pro(uctio% .TPA1 40000 30000 "000 %000 %000 2000 2000 2000 2000 4000 2000 2000 11000 1=8888

7he product mi0es are deri+ed &ased on the present market demand6 7he mi0 can &e changed at an moment as per market demand )ithout an change in machineries6

43

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

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 sector6 7he prices of the products considered for the purpose of economic anal sis are ta&ulated &elo)6 Pro(uct 2%A2%A00 1"A1"A1" 15A15A00 20A20A00 20A10A10 1%A1%A09 5A15A15 10A26A26 14A35A14 15A15A15 12A32A16 22A00A11 19A19A19 Sales Price .Rs. Per !T1 15250 12600 14000 10600 10"00 12300 %920 13300 16300 114%0 13450 %900 12%%0

NoteA 2e 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 India6 $or our stud )e ha+e taken the prices on a conser+ati+e &asis6 6.? Ra: !aterial Cost

7he ra) materials re.uired for the proposed :P4 fertili=ers manufacturing unit are ;reaMEP- and 1'P- SSP- 7SP and $illers like D psum and !hina !la 6 7he main sources for their a+aila&ilit are :agar#una $ertili=ers and !hemicals 5td6- 4*I3!E- II$!EDu#arat $ertili=ers and M'*4$(16 ' 7 pical e0ample of *a) Material re.uirement is e0plained &elo)6 >ra(e 1BA1BA1B ' grade 1"A1"A1" :P4 fertili=er contains 1"@ :itrogen- 1"@ Phosphorous and 1"@ Potassium & )eight of the :P4 mi06 So for e+er one ton of fertili=er production 1"0 4g each of :- P and 4 )ill &e present6 7his is achie+ed & mi0ing ade.uate .uantit of the +arious chemicals6 ' t pical determination of .uantit is done &elo) for 1"A1"A1" grade :P4 fertili=er6 7he &alances are met through other chemicals and filler ra) materials like g psum6

44

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

Primary Ra: !aterial Re0uire( ;rea 1'P B1i,ammonium PhosphateC MEP BMuriate of PotashC

C4emical &ormula !94 :2E B:94C2 9PE4 4!l

7he !hemical compositions of the three primar ra) materials are listed &elo)6 UREA 7otal :itrogen @ & )eight- on dr &asis Min6 46@6 3iuret- @ & 2eight , 165@ Ma06 Moisture- @ & 2eight , 5@ Ma06 DAP 7otal :itrogen @ & )eight , Min6 1%@ 'mmoniacal :itrogen form- @ & )eight , Min6 1565@ 7otal :itrogen in form of ;rea- @ & )eight , Ma06 265@ :eutral 'mmonium !itrate solu&le Phosphates B's P2E5C @- & )eight Min6G46 G 4965@ Moisture @ & )eight , Ma0 165@ 2ater Solu&le Phosphates Bas P2E5C @ & )eight , Min 41@ !)P 2ater Solu&le Potash !ontent B's 42EC @ & 2eight Min6 , 60@ Sodium as :a!l- @ 3 )eight BEn dr &asisC Ma06 , 365@ Moisture @ & 2eight Ma06 , 065@ :itrogen re.uired is reco+ered &oth from ;rea and 1'P6 Phosphorous and Potassium are reco+ered from 1'P and MEP6 7he &alancing of ra) material is done & .uantif ing re.uirement of Potassium6 9ence for 1"0 4g Potassium re.uirement 2%4 4g B100H6001"0C of MEP is re.uired6 Ence the MEP re.uirement has &een made the re.uirement of Phosphorous is done6 7he content of Phosphorous as e0plained in the a&o+e composition of 1'P is around 4965@ or 495 Drams for e+er 4g of 1'P6 9ence to get 1"0 4g Phosphorous 342 4g of 1'P is re.uired6 7he 1'P used )ill also gi+e 6165 4g of :itrogen at 1%@ content6 7he &alance 10%65 :itrogen is reco+ered from 236 4g of ;rea at 46@ !ontent6

45

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

9ence 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 4g of ;rea 342 4g of 1'P 2%4 4g of MEP 7he &alance ingredients are met through other chemicals like Single Super Phosphate BSSPC and D psum as $iller6 Similarl the ra) material &alancing is )orked out for other grades of fertili=ers6
Ra: !aterial 3 Pro(uct <<J ;*(' 1'P MEPBPE7'S9C SSP 7SP DIPS;M $I55(* M'7(*I'5 H !9I:' !5'I 7E7'5 2(ID97 B4gC =6A=6A88 3"1600 519600 0600 0600 30600 %0600 1000600 1BA1BA1B 236600 342600 2%4600 %0600 3%600 20600 1000600 1FA1FA88 220600 231600 0600 15%600 "5600 316600 1000600 =8A=8A88 2%5600 3%"600 0600 140600 5%600 130600 1000600 =8A18A18 35%600 19"600 16"600 60600 5%600 160600 1000600 16A16A8C 25"600 34%600 151600 62600 "2600 110600 1000600 FA1FA1F 3600 2"1600 250600 160600 0600 316600 1000600

Ra: !aterial 3 Pro(uct <<J ;*(' 1'P MEPBPE7'S9C SSP 7SP DIPS;M $I55(* M'7(*I'5 H !9I:' !5'I 7E7'5 2(ID97 B4gC

18A=GA=G 0600 560600 434600 0600 6600

1?A7FA1? "600 "60600 233600 0600

1FA1FA1F 22%600 252600 250600 150600 22600 49600 49600 1000600

1=A7=A1G "600 649600 26"600 %600 44600 25600 0600 1000600

==A88A11 4%0600 0600 1%4600 0600 0600 51600 2%5600 1000600

1CA1CA1C 252600 414600 31"600

1000600

1000600

1"600 1000600

7he annual ra) material re.uirement as per the desired product mi0 ratio and the capacit utili=ation is ta&ulated &elo)6 7he ra) material re.uirement anal sis is presented as 'ppendi0 "6

46

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

*a) material re.uirement per annum B!T $er a%%umC UREA DAP !)P.P)TASH1 SSP TSP >"PSU! &I''ER !ATERIA' 3 CHINA C'A" 4562 65%9 "096 "603 7he prices of the ra) material considered are ta&ulated &elo)A Ra: !aterial Prices. Ra: !aterial Ra. Per !T ;*(' 5"40 1'P 1%600 MEPBPE7'S9C 12100 SSP 5100 7SP "900 DIPS;M 2000 $I55(* M'7(*I'5 H !9I:' !5'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 :P4 fertili=er unit6 $or the purpose of the stud )e ha+e considered the higher of the t)o prices6 6.F Po:er a%( Coal is installing a transformer of 500 4>'6 7he peak po)er re.uirement =81=<17 1520% 21621 "%21 2""5 %5 192% =817<1? 2196" 31231 1129% 400% 122 2"%5 =81?<1F 2365" 33633 1216" 4316 132 3000 =81F<1G 2534" 36035 13036 4625 141 3214 =81G<1B 2"03" 3%43% 13905 4933 150 342% %110 =81B<16 2"03" 3%43% 13905 4933 150 342% %110 =816<1C 2"03" 3%43% 13905 4933 150 342% %110

7he !ompan

)ould &e 3"0 426 7he unitFs B429C consumption at 60@ utili=ation )ill &e 959040 4296 In case of lack of po)er Bduring po)er failureC 1D Set is proposed to &e used for )hich pro+ision has &een made in the pro#ect cost6 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 1D set6 7he cost of po)er from the electricit &oard )ill &e at *s6 250 per 4>' per Month of demand charges and *s 3655 per 429 unit charges Bapplica&le for 114> su&,stationC6 7he cost of po)er from Denerator has &een considered as *s6 % per 4296 's per industr norms the coal re.uirement for the purpose of running the furnace )ill &e around 22 kg per M76 7he cost of coal as per present market trend is *s6 4650 per

47

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

4g and the same has &een taken into consideration for the purpose of economic anal sis6 7he po)er and coal consumption anal sis is presented as 'nne0ure 3!6 6.G Pac-agi%g a%( &reig4t

's per the packaging trend in the industr fertili=ers are packed in 50 4g 91P( 3ags6 7he cost per &ag )orks out to *s65 per unit B the actual rates are .uoted in terms of )eightC and same has &een taken into consideration as cost of packaging6 7he freight cost is assumed ? *s200H, per M7 of production6 6.B !a%$o:er

'round 52 Manpo)er )ould &e re.uired for the purpose of running the unit6 Ef the 52 manpo)er- 42 )ill &e re.uired for the purpose of production and the &alance for the purpose of 'dministration6 7he amount of annual salaries of the production staff is estimated at *s6 4"652 5akh including 10@ fringe &enefits and for the administrati+e salaries at *s6 4%653 5akh per annum including 20@ fringe &enefits6 Iearl increase in )ages is assumed at 5@ and in salaries at 10@6 7he )orkings are presented in A%%exure ? 6.6 )THER RECURRIN> EXPENSES

*epairs and maintenance e0penses 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 ?06"5@ of the asset +alueC- 7en per cent increase has &een pro+ided for the e0penses e+er ear thereafter6

Ether manufacturing e0penses ha+e &een reckoned as 065@ of re+enue6 Sales and administrati+e e0penses ha+e &een considered as 2@ and 06"5@ of the re+enue respecti+el 6

6.C

I%come Tax

48

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

Income ta0 has &een considered as 32645@ as per I7 act and 20600 @ as M'76 7he ma0imum of &oth has &een taken to compute ta0 pa a&le to the department6 6.18 De$reciatio% 1epreciation has &een calculated &oth as per S5 and 21> method6 7he rates of depreciation are ta&ulated &elo)6 Item 3uilding P/M Ether 'ssets Mfa S'! 3634@ 562%@ 562%@ 6633@ DD 10@ 15@ 15@ 10@

6.11 TER! ')AN Term 'oa% Dis;urseme%t 3Re$ayme%t Sc4e(ule 1is&ursementH*epa ment Period 1st dis&ursement 5ast 8uarter of 2011, 2012 !ommencement of commercial prodn6 Ect 2012 !ommencement of repa ment 'pril 2013 !ompletion of repa ment March 2019 7otal period of repa ment ,,,,6 ears and si0 months Interest from <an 2012 to Sep 2012 i6e6 for 9 months capitali=ed 6 Moratorium period allo)ed from the month of commercial production to the commencement of repa ment is 6 months6 1oor,to,door repa ment is " ears 3 months 7he term loan proposed & the !ompan is *s6 1100600 5akh and the interest for the same is considered ? 15@6 7he term loan is considered to &e dis&ursed from the month of <anuar 2012 and to &e completed & second .uarter of 2012,136 7he interest during construction has &een considered as pre,operati+e e0penses and capitali=ed to the pro#ect cost and depreciated proportionatel )ith the fi0ed assets6 7he term loan repa ment is considered from the first .uarter of 2013,14 )ith 6 months of moratorium6 7he term loan is paid )ithin 6 ears of initiation of repa ment6 7he door to door tenure for the term loan )orks out to " ears and three months6 6.1= D)R@IN> CAPITA'

7he holding period considered for the purpose of the assessment of )orking capital re.uirement is ta&ulated &elo)6 7he holding period of ra) material has &een considered as 22,25 da s and that for packing material as one month6 2ork in progress has &een taken as 3 da s and that for finished goods and &ills recei+a&le as 6 da s and half month respecti+el 6 7he holding period for sundr month6 creditors has &een taken as half

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

9olding period for ra) material Curre%t Assets *a) Material Packing Material 2ork in Process $inished Doods 3ills *ecei+a&les Sundr !reditors B!5C Hol(i%g Perio( I% !o%t4s 06"5 1600 0610 0620 0650 0650

7he )orking capital re.uirement for the first ear of operation has &een assessed as *s6510600 5akh6 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 cost6 6.17 P,IDT ear of operation due to lo)er operating period and lo)er capacit

7he profit &efore ta0 is positi+e from the +er first ear of operation6 7he P37 is lo) during the first utili=ation6 7he P3I17 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 Particulars Profit &efore ta0 BP3I17C 6.1? =81=<17 771.GG =817<1? G?6.16 =81?<1F GB1.G1 .Rs. 'a-4C =81F<1G B16.87 =81G<1B BG7.1? =81B<16 B?8.81 =816<1C B=?.81

Pro#it a#ter Tax

7he profit after ta0 is positi+e too from the +er first ear of operation6 7he P'7 is lo) during the fist ear of operation due to the same reason as that of P376 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 Particulars Profit 'fter 7a0 BP'7C =81=<17 1??.F7 =817<1? =G6.1G .Rs. 'a-4s1 =81?<1F =81F<1G =81G<1B =81B<16 =6C.8B 7=B.71 7GF.?= 7G?.8? =816<1C 7GC.8G

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

6.1F

Cas4 Accruals

7he cash accruals from P'7 and depreciation are ade.uate enough to repa the term loan )ithin the stipulated time6 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 Particulars !ash 'ccruals 6.1G =81=<17 1G7.C1 =817<1? 77B.B8 =81?<1F 7F6.G1 =81F<1G 7CG.6? =81G<1B ?7?.CF .Rs. 'a-41 =81B<16 ?77.FB =816<1C ?7F.C7

,rea- Eve% A%alysis .)$erati%g Ca$acity1

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 operation6 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 165" to 2699 and a+erages at 16%06 7he net 1S!* ranges &et)een 1699 and 26426 7he net a+erage 1S!* is 261%6 7he a+erage 1S!* ratios are )ell a&o+e the &enchmark le+els6 7he ear )ise 1S!* ratios are ta&ulated &elo)6 DSCR Particulars Dross 1S!* '+erage :et 1S!* '+erage 6.16
, 2611 1699

.Rs. 'a-41 =81=< 17

2699

=817< 1?
165"

=81?< 1F
165%

=81F< 1G
16""

=81G< 1B
2601

=81B< 16
1695

=816< 1C
2610

16%0
2620 2642 261" 261%

261%

INTERNA' RATE )& RETURN 7he internal rate of return of the pro#ect )orks out at 24603@6

6.1C

SECURIT" !AR>IN 7he a+erage securit margin )orks out to 61694@6

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

CHAPTER < C SD)T ANA'"SIS

SD)T A%alysis o# !3s Palamoor&ertili9ers &ertilisers Pvt. 't(. Stre%gt4s 7he promoters ha+e rich e0perience in fertili=er marketing- and ha+e good understanding of rele+ant market6 9ighl e0perienced technical consultant )$$ortu%ities 7here is a large demand,suppl gap in the fertili=er sector6 's the e0isting

manufacturing capacit is inade.uate to meet the countr Fs re.uirements of fertili=ersIndia is importing fertili=ers on a continuing &asis6 's such there )ill &e no dearth of demand for :P4 granulated fertili=ers6 Dea-%esses 5ack of e0perience for the promoters in manufacturing sector6 T4reats !ommissioning of ne) :P4 granulation units in 'ndhra Pradesh could increase the le+el of competition in the industr 6 '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 6

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

CHAPTER < 18 C)NC'USI)N

11.81 )vervie: o# t4e $ro2ect a. 'ocatio%al A(va%tages 7he compan Fs proposed manufacturing site )ill &e located :elapatla >illage!houtupal Mandal- :algonda 1istrict6 7he e0tent of land B4609 acresC )ill &e more than ade.uate to take care of the re.uirement of the factor for its proposed operations6 7he pro#ect site has all the infrastructural ad+antages for sourcing po)er- )ater and skilled manpo)er and has good connecti+it 6 ;. Promoters* ex$ertise a%( ex$erie%ce 7he promoters ha+e rich e0perience in fertili=er marketing- and ha+e good understanding of rele+ant market c. Availa;ility of ra: materials 7he main sources for the a+aila&ilit of ra) materials are manufacturers of fertili=er nutrients like :agar#una $ertili=ers and !hemicals- !oromandal $ertili=ers- 1eepak $ertili=ers- Indo,Dulf $ertili=ers / !hemicals- $ertili=ers / !hemicals 7ra+ancore*ashtri a !hemicals / $ertilisers- 4*I3!E- II$!E- Du#arat $ertili=ers etc6 $ertili=er :utrients are also a+aila&le through dealers6 Imports of fertili=ers are also permitted6 9ence- a+aila&ilit of ra) materials is assured6 7he ma#or manufacturers of fertili=er nutrients ha+e their sales agencies in the district of nalgonda- 9ence MHs Palamoor$ertili=ers )ill &e a&le to source their re.uirements of fertili=ers from these agencies6 (. !ar-et Pote%tial 7here is a large demand,suppl gap in the fertili=er sector6 's the e0isting

manufacturing capacit is inade.uate to meet the countr Fs re.uirements of fertili=ersIndia is importing fertili=ers on a continuing &asis6 's such- there )ill &e no dearth of demand for :P4 granulated fertili=ers- )hich are sold through fertili=er dealers Bthere are a&out 2500 dealers in 'PC6

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

e. Tec4%ical Arra%geme%ts 7he machines proposed to &e purchased & Palamoor$ertili=ers are tested and pro+en and are in use & +arious granulated plant units6 7he compan has appointed Shri P Mohan *ao as technical consultant for o+erseeing the implementation of the pro#ect6 Shri P Mohan *ao is highl industr 6 #. Utilities 'de.uate Po)er and &ore,)ell )ater is a+aila&le to meet the re.uirements of the compan 6 g. Im$leme%tatio% Sc4e(ule 7he first dis&ursement of loan is e0pected in <an 20126 7he ci+il )orks and erection of machiner are e0pected to &e completed & <une 20126 7he pro#ect is e0pected to go on stream in Ecto&er 20126 7he term loan repa ment )ill commence from 'pril 2013 and )ill &e completed in March 2019 i6e6 the door,to,door repa ment )ill &e " ears 3 months6 4. Pro2ect Cost 7he pro#ect cost has &een arri+ed &ased on the follo)ing factorsA 3E8s of ci+il )orks and estimates su&mitted & the promoter along )ith the &uilding plan6 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 e0penses including interest on term loan during the construction period6 Margin mone for )orking capital6 .ualified +eteran in

'll the costs relating to ci+il )orks and plant / machiner ha+e &een +alidated for their reasona&leness )ith respect to the 3E8s- estimatesH.uotations recei+ed and the current market trend6 7he cost of the pro#ect is estimated at *s6 1%31 lakh6 7he &ank term loan is estimated at *s6 1100 lakh and the promoterFs e.uit *s "31 lakh6 7he de&tHe.uit ratio for the pro#ect is 1650A16 'n cost o+errun in the pro#ect )ill &e &orne & the compan 6

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

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 &ank6 7he ke financial indicators are )ithin the accepta&le norms6 7he a+erage Dross 1S!* for the pro#ect )orks out to 16%0- a+erage net 1S!* 261%- 3(PBat operating capacit C 59@ in the 3rd full ear of operation and I** 24603@6 11.8= Ris- &actors a6 7he promoter are +enturing into manufacturing sector for the first time- thou the ha+e rich e0perience in fertili=er marketing6 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 production6 7he are also in the process of appointing suita&le ke personnel to take care of operationsmarketing and finance6C &6 (sta&lishment of ne) :P4 granulation plants in 'ndhra Pradesh )ill raise the le+el of competition for the compan 6 B*isk MitigantA 7here is al)a s a demand,suppl gap in the a+aila&ilit of fertili=ers6 9ence marketing of :P4 mi0 fertili=ers should not &e a pro&lem6C c6 In case of poor monsoon the off,take of :P4 fertili=ers )ill get reduced6 B7he unit has the fle0i&ilit of ad#usting the actual le+el of production and the product mi0 in accordance )ith the market demand6 Moreo+er an sluggishness in the off,take of fertili=ers )ill &e a temporar phenomenon )hich the compan is e0pected to tide o+er6C d6 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 :P4 units in the +ie) of +arious ad+antages accruing to the farmers6C

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

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% $la%t at a cost o# Rs 1671 la-4 o% ?.8C acres o# la%( at Survey %o. C? Nela$atla Eco%omically ia;le. KKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKKK Date(A 5a%< =811 illage / C4outu$al !a%(al/ Nalgo%(a District is co%si(ere( Tec4%ically &easi;le a%(

56