Latest news with #Phosphate
New Indian Express
a day ago
- Business
- New Indian Express
Reduce chemical fertiliser use and opt for organic alternatives: Agri Director S Dilli Rao
VIJAYAWADA: Director of Agriculture S Dilli Rao on Thursday urged farmers to reduce chemical fertiliser usage by 20–25% and adopt organic alternatives to safeguard soil health and ensure sustainable agriculture. Speaking at the Annadata Sukhibhava fund release programme in Darshi mandal, Prakasam district, he warned that overuse of fertilisers has led to increased pest attacks and crop diseases. He advised farmers to incorporate organic manures, green manure, bio-fertilisers, and nano-fertilisers to restore soil balance and improve resilience. He said the state government has extended substantial support to the farming sector by absorbing approximately Rs 12,500 crore in fertiliser subsidies. Farmers receive an 88% subsidy on urea and a 50.72% subsidy on (Diammonium Phosphate) DAP. The government detailed the subsidized pricing for farmers: Urea (45 kg bag): Original cost Rs 2,234; Subsidy Rs 1,967 (88%); MRP Rs 266.50; DAP (50 kg bag): Original cost Rs 2,740; Subsidy Rs 1,390 (50.72%); MRP Rs 1,350. Dilli Rao noted that India continues to rely heavily on imported raw materials such as phosphorus and potash due to limited domestic availability, making the sector vulnerable to global challenges including volatile currency exchange rates and geopolitical tensions in Western nations. He said despite rising foreign exchange expenditure, the government remains committed to ensuring fertiliser supply through budgetary allocations. He urged farmers to follow the recommended dosages and integrate sustainable practices to protect the soil, increase productivity, and contribute to national food security and economic stability. Dilli Rao reiterated that responsible fertiliser use is not only crucial for individual farm success but also essential for the long-term health of the nation's agriculture.
Zawya
2 days ago
- Business
- Zawya
Maaden reports second quarter 2025 results
RIYADH - Saudi Arabian Mining Company ('Maaden' or the 'Company', 1211 on the Saudi Exchange), one of the world's fastest growing mining companies, today reported its financial results for the second quarter and first half of 2025. H1-FY25 FINANCIAL HIGHLIGHTS Revenue of SAR 17.93 billion (H1-FY24: SAR 14.53 billion), 23% year-on-year (YoY) increase driven by higher consolidated sales volumes and stronger commodity prices. EBITDA up 23% YoY to SAR 7.25 billion (H1-FY24: SAR 5.91 billion), Maaden's second highest first half, mainly due to higher Phosphate and Aluminum FRP sales volumes and a strong overall pricing environment. Net profit1 of SAR 3.47billion (H1-FY24: SAR 2.01 billion), up 73% YoY, reflecting strong EBITDA and reduced finance cost, lower zakat, income tax and severance. Strong cash generation from operations of SAR 3.93 billion2 and closing cash position of SAR 10.37 billion2. Net Debt/EBITDA at 1.7x, below target range. Early repayment of SAR 2.1 billion in debt by Maaden Wa'ad Al Shamal Phosphate Company (MWSPC), representing approximately 6% of Maaden's total consolidated debt. 1: Attributable to equity holders of Maaden. 2: including time deposits and related impact. Q2-FY25 OPERATIONAL AND STRATEGIC HIGHLIGHTS Operational excellence with higher YoY overall production, with Phosphate posting the highest quarterly DAP production on record. Accelerating exploration efforts in Wadi Al Jaww to expedite maiden resources given encouraging results. Achieved Ar Rjum Final Investment Decision (FID) approval by the Board of Directors to develop a new gold asset in the Central Arabian Gold Region. Post period end, on 1 July 2025, Maaden completed the transaction to acquire 25.1% ownership interest from Alcoa in Maaden Aluminum Company (MAC) and Maaden Bauxite and Alumina Company (MBAC). Maaden now fully owns and operates both assets. Signed Memorandum of Understanding (MoU) with MP Materials Corp (MP Materials) to jointly to explore opportunities to establish a fully integrated, end-to-end rare earth supply chain in Saudi Arabia. Signed a five-year supply agreement with three major Indian fertilizer producers for SAR 3.1 million MT of DAP annually, securing demand for approximately half of Maaden's annual DAP production. Appointed Chief Technology Officer, Donovan Waller, to lead Maaden's digital and technology transformation. Initiated utilization of Fleet Space Technologies to accelerate discovery and development of the Kingdom's mineral resources with its end-to-end exploration platform. Bob Wilt, Maaden CEO: 'During the first half of 2025, we delivered the second highest first half EBIDTA, maintained strong momentum in our pursuit of operational excellence by setting record quarterly production in Phosphate, achieving ongoing exploration successes, advancing projects and building key partnerships. 'We fully consolidated our aluminum portfolio in MAC and MBAC, closing the acquisition of the remaining 25.1% of Alcoa's stake post period on 1 July 2025. And we are moving forward with the Ar Rjum project toward FID, which will allow us to develop a new gold asset expected to produce around 300 thousand ounces annually in the Central Arabian Gold Region. We also continue to uncover more of the KSA's mineral wealth as we accelerate exploration in Wadi Al Jaww, driven by promising initial results. 'Looking ahead, I am confident that we will deliver strong results in the second half of 2025 as we progress our growth strategy, drive forward with our exploration program and maintain operational excellence across our businesses. We remain committed to creating long-term value for shareholders and profitably advancing mining as the third pillar of Saudi Arabia's economy.' SUMMARY OF FINANCIAL RESULTS SAR (million) Q2-FY25 Q1-FY25 Variance H1-FY25 H1-FY24 Variance Revenue 9,416 8,511 +11% 17,927 14,532 +23% EBITDA 3,785 3,469 +9% 7,254 5,908 +23% EBITDA margin % 40% 41% -1pp 40% 41% -0.2pp Net profit/ (loss)1 1,922 1,550 +24% 3,472 2,006 +73% Net profit margin % 20% 18% +2pp 19% 14% +6pp EPS (SAR )1 0.51 0.41 +24% 0.91 0.54 +68% 1: Attributable to equity holders of Maaden. | Numbers presented may not add up precisely to the totals provided due to rounding In the second quarter of 2025, Maaden generated revenue of SAR 9.42 billion, up 11% quarter-on-quarter ('QoQ'), driven by higher overall sales volumes across all BUs. Additionally, stronger overall commodity prices supported EBITDA growth of 9% QoQ. EBITDA margin decreased marginally to 40%, primarily due to higher raw material costs and the recognition of an expected credit loss (ECL) allowance of SAR 138 million related to Meridian Consolidated Investments (MCIL), Maaden's fertilizer distribution network in Africa. Despite these charges, Maaden's net profit increased by 24% to SAR 1.92 billion. In the first half of 2025, revenue increased by 23% and EBITDA grew by 23% YoY, reflecting higher overall sales volumes and commodity prices. EBITDA margin remained largely flat at 40% despite the impact of higher raw material prices, an ECL provision booked at MCIL, and the absence of a SAR 469 million insurance claim received during H1-FY24. Net profit was up by 73% YoY, reflecting higher EBITDA and lower finance cost, zakat, income tax and severance expenses. Maaden operates through three business units (BUs). The reporting segments are as follows: 1) Phosphate, 2) Aluminum, and 3) Base Metals and New Minerals. Phosphate SAR (million) Q2-FY25 Q1-FY25 Variance H1-FY25 H1-FY24 Variance Sales 5,183 4,470 +16% 9,653 7,949 +21% EBITDA 2,418 2,166 +12% 4,585 3,654 +25% EBITDA margin 47% 48% -2pp 47% 46% +2pp Production volume (kmt) DAP 1,705 1,573 +8% 3,278 2,893 +13% Ammonia 747 906 -18% 1,653 1,479 +12% Sales volume (kmt) DAP 1,761 1,535 +15% 3,296 2,943 +12% Ammonia 399 549 -27% 948 848 +12% Avg. realized prices (SAR /MT) DAP 677 613 +10% 647 557 +16% Ammonia 319 357 -11% 341 346 -1% Numbers presented may not add up precisely to the totals provided due to rounding The Phosphate BU generated SAR 5.18 billion in revenue and SAR 2.42 billion in EBITDA in Q2-FY25. Revenue and EBITDA increased by 16% and 12% QoQ, respectively, mainly due to higher DAP production and sales volumes, along with higher average realized prices. EBITDA margins remain flat despite higher molten sulfur prices, a planned turnaround maintenance at the ammonia plant, and a SAR 138 million ECL provision related to MCIL. While DAP realized prices remained strong during the quarter, average realized prices for Ammonia declined, driven by a recovery in global supply outpacing demand. During the quarter, the Phosphate BU marked a record DAP production. On a QoQ basis, DAP production improved following the planned turnaround maintenance in Q1-FY25, while Ammonia production declined due to a planned ammonia plant turnaround during Q2-FY25. H1-FY25 demonstrated a significant improvement YoY in production and sales volumes for DAP and ammonia, supported by increased average realized DAP prices. As a result, revenue and EBITDA improved 21% and 25%, respectively. The EBITDA margin improved slightly to 47%. Aluminum SAR (million) Q2-FY25 Q1-FY25 Variance H1-FY25 H1-FY24 Variance Sales 2,550 2,710 -6% 5,260 4,587 +15% EBITDA 656 815 -20% 1,470 1,518 -3% EBITDA margin 26% 30% -4pp 28% 33% -5pp Production volume (kmt) Alumina 461 478 -4% 939 933 +1% Aluminum 247 249 -1% 496 486 +2% FRP 78 77 +1% 154 118 +31% Sales volume (kmt) Alumina 59 73 -19% 131 157 -17% Aluminum 136 144 -6% 280 305 -8% FRP 80 72 +11% 152 123 +24% Avg. realized prices (SAR /MT) Alumina 381 558 -32% 479 395 +21% Aluminum 2,701 2,859 -6% 2,782 2,430 +14% FRP 3,643 3,767 -3% 3,702 3,387 +9% Numbers presented may not add up precisely to the totals provided due to rounding The Aluminum BU generated Q2-FY25 revenue of SAR 2.55 billion, a decline of 6% QoQ. EBITDA declined by 20% QoQ, mainly due to lower prices, offsetting improved Aluminum Flat Rolled Product (FRP) sales volumes. During H1-FY25, revenue increased YoY by 15% mainly due to higher overall sales volumes and realized prices. Notably, Aluminum FRP sales volumes increased by 24% in addition to improved pricing YoY. Excluding the one-off insurance payment of SAR 469 million received in the prior year period, EBITDA improved by 41% YoY despite energy increase in 2025. Base Metals and New Minerals SAR (million) Q2-FY25 Q1-FY25 Variance H1-FY25 H1-FY24 Variance Sales 1,461 1,187 +23% 2,648 1,996 +33% EBITDA 860 807 +7% 1,667 1,135 +47% EBITDA margin 59% 68% -9pp 63% 57% +6pp Production volume (Koz) Gold 108 123 -12% 231 241 -4% Sales volume (Koz) Gold 118 111 +6% 228 242 -6% Avg. realized prices (SAR /oz) Gold 3,316 2,858 +16% 3,094 2,197 +41% Numbers presented may not add up precisely to the totals provided due to rounding BMNM BU QoQ revenue and EBITDA increased 23% and 7%, respectively, and were positively impacted by increased gold sales volumes and record pricing. EBITDA margin was impacted largely by higher operating and exploration costs. Production was impacted at Mansourah-Massarah due to a combination of lower plant grades and recovery. The favorable market environment saw average realized gold prices continue to rise by 16% QoQ to USD 3,316 per ounce. H1-FY25 revenue increased by 33%, while EBITDA was up 47% YoY, reflecting higher average realized gold prices, offsetting lower sales volume. OUTLOOK AND MARKET COMMENTARY The Phosphate BU continues to expect production momentum in 2025, with DAP output forecast between 5,900 and 6,200 KMT. Market conditions for DAP strengthened in Q2-2025, supported by steady demand from key markets, coupled with tight global supply following continued Chinese export restrictions. Ammonia prices continued to decline during Q2-2025 as supply continued to outpace stable demand, however prices are expected to stabilize as demand from ammoniated fertilizer producers in core markets continues to support market balance. The Aluminum BU maintains its full-year 2025 production guidance, with Primary Aluminum output expected between 850 and 1,150 KMT and FRP output between 250 and 310 KMT. Aluminum prices continued to be soft during Q2-2025 due to shifting trade flows and broader geopolitical tensions that weighed on end-market demand. FRP premiums outside the U.S. also softened as metal volumes were redirected to Europe and Asia. The aluminum market continues to be shaped by external uncertainty in the near-term, however medium to long-term market fundamentals for aluminum remain favorable as global demand is expected to outpace supply. The BNMN BU remains on track to achieve its 2025 production guidance of between 475 and 560 koz. Gold prices have remained elevated primarily due to geopolitical uncertainty and global central bank demand. Maaden remains well-positioned to benefit from the sustained market strength for gold. In April 2025, the US government proposed new tariffs on imports to the US. While tariff related trade negotiations are ongoing between the US and various other countries, Maaden expects limited direct impact on its financial results. Maaden maintains a competitive cost structure across its portfolio of products, which are critical to the global economy and supplied to a geographically diverse customer base. Developments will be monitored closely and updates provided as appropriate. Maaden continues to advance one of the world's largest single-jurisdiction exploration programs in the Arabian Shield, reinforcing its future growth pipeline. Key focus areas include Jabal Shayban, where early drilling results suggest the potential for a new gold and copper district, and Wadi Al Jaww, where exploration has accelerated with initial gold resource estimates expected in 2025. Exploration also progressed around existing operations, including Mansourah-Massarah and Ad Duwayhi, supporting future resource development and mine life extension. Maaden maintains its full-year CAPEX guidance for 2025 at SAR 7.55 billion to SAR 9.55 billion, with around 70% allocated to growth CAPEX. For the Phosphate 3 Phase 1 expansion project, key contracts were awarded in January 2025, and construction continues to progress well. The project is expected to be completed by the end of 2026, with production commencing in 2027 and full capacity expected by the end of 2027. Maaden is making strong progress toward its long-term growth ambitions, targeting 8–10x EBITDA growth by 2040¹. In H1-FY25, the Company completed the acquisition of SABIC's stake in ALBA and Alcoa's interests in its Aluminum business. These strategic initiatives will strengthen Maaden's position by consolidating operations and ownership across its Aluminum portfolio, while capturing growing regional demand. In addition, the recently signed non-binding Heads of Terms for a joint venture with Aramco is expected to accelerate mineral transformation and unlock high-value critical minerals within the Kingdom. 1: Baseline comparison year for 8-10x EBITDA growth is 2020 GUIDANCE Maaden provides the following FY25 production and capital expenditure guidance: Production Guidance – FY25 CAPEX Guidance – FY25 Unit Lower Upper Unit Lower Upper DAP Equivalent KMT 5,900 6,200 Total CAPEX* SAR (mn) 7,550 9,550 Ammonia KMT 3,000 3,200 *Growth CAPEX allocated at 70-75% Alumina KMT 1,750 1,950 Aluminum KMT 850 1,100 Flat Rolled KMT 250 310 Gold Koz 475 560 ANALYST CALL AND EARNINGS PRESENTATION Maaden will be hosting an analyst call Thursday, 7 August 2025, at 17:00 KSA time to present its Q2-FY25 financial results. For conference call details, please email invest@ ABOUT MAADEN Maaden is the Middle East's largest multi-commodity mining and metals powerhouse and stands among the world's fastest growing, with a robust SAR32.5 billion (US$8.7 billion) in revenues for 2024. As a KSA-based, globally significant mining champion, Maaden is deploying technology and talent to accelerate the exploration and production of Saudi Arabia's vast mineral endowment to develop mining as the third sector of the Saudi economy. With a skilled workforce of more than 7,000 employees, Maaden operates 17 mines and sites, and its products are currently exported to 55 countries globally. For more information, please visit DISCLAIMER This document may contain statements that are, or may be deemed to be, forward looking statements, including statements about the beliefs and expectations of Saudi Arabian Mining Company (Maaden) (the "Company"). These statements are based on the Company's current plans, estimates and projections, as well as its expectations of external conditions and events. Forward-looking statements involve inherent risks and uncertainties and speak only as of the date they are made. As a result of these risks, uncertainties and assumptions, a prospective investor should not place undue reliance on these forward-looking statements. A number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements. The Company is not obliged to, and does not intend to, update or revise any forward-looking statements made in this presentation whether as a result of new information, future events or otherwise. This communication has been prepared by and is the sole responsibility of the Company. It has not been reviewed, approved, or endorsed by any financial advisor, lead manager, selling agent, receiving bank or underwriter retained by the Company and is provided for information purposes only. In addition, because this communication is a summary only, it may not contain all material terms and in and of itself should not form the basis for any investment decision. The information and opinions herein are believed to be reliable and have been obtained from sources believed to be reliable, but no representation or warranty, express or implied, is made with respect to the fairness, correctness, accuracy, reasonableness, or completeness of the information and opinions. There is no obligation to update, modify or amend this communication or to otherwise notify you if any information, opinion, projection, forecast, or estimate set forth herein, changes or subsequently becomes inaccurate. You are strongly advised to seek your own independent advice in relation to any investment, financial, legal, tax, accounting, or regulatory issues discussed herein. Analyses and opinions contained herein may be based on assumptions that if altered can change the analyses or opinions expressed. Nothing contained herein shall constitute any representation or warranty as to future performance of any financial instrument, credit, currency, rate, or other market or economic measure. Furthermore, past performance is not necessarily indicative of future results. The Company disclaims liability for any loss arising out of or in connection with your use of, or reliance on, this document. These materials may not be published, distributed, or transmitted and may not be reproduced in any manner whatsoever without the explicit written consent of the Company. These materials do not constitute an offer to sell or the solicitation of an offer to buy the securities in any jurisdiction. Non-IFRS financial measures Some of the financial information included in this document is derived from the Company's consolidated financial statements but are not terms defined within the International Financial Reporting Standards (IFRS) as applied In the Kingdom of Saudi Arabia. Such information is provided as the Company believes they are useful measures for investors.
Time of India
18-07-2025
- Business
- Time of India
Fertilizers available, but ryots struggle amid staff apathy
Visakhapatnam: Although fertilizers are available in adequate quantities at the district level for this Kharif season, farmers are struggling to obtain them. Staff at Rythu Seva Kendras and other distribution centres have shown a lack of urgency, forcing many farmers to turn to private dealers — where they are compelled to buy fertilizers at steeply inflated prices. Even after the govt instructed the administrations in the district to provide fertilizers, the fertilizers are not within the reach of the farmers due to negligence in distributing them by the staff at the district level. There are allegations over the Rythu Seva Kendras. The district authorities are now supplying the fertilizers that have reached the Primary Agricultural Cooperative Societies from MarkFed. Sources say that the stocks at Rythu Seva Kendras have remained the same for the past few months. "The usage of Urea is high presently, and we have been searching for the stocks. There are no stocks at private dealers. Even if they have quantities, they have been enhancing the prices and cashing in on the situation," a farmer in Vizianagaram district, K Rama Rao, said. The higher officials in the agricultural department estimated the required quantity of Urea and other fertilizers and sent around 90% of the estimated quantities. The majority of Urea stocks are in Rythu Seva Kendras, sources said. They further added that the transfers of village agricultural assistants over the past month have been creating problems for the farmers, as VAAs are not distributing fertilizers and are also not inclined to hand over the stock details or register them. The authorities are attributing the delay in Urea distribution to the transfers of Village Agricultural Assistants. The Agricultural Department higher officials say that this will be resolved in seven to ten days. The district agricultural officers advised the farmers to bring any issues in fertilizer supply to their notice. The govt has sent sufficient quantities of fertilizers to districts. "When we ask about DAP, Potash, Super Phosphate, Complex fertilizers, and others, Agricultural Department officials say that those fertilizers are available. But, the local staff have been saying that technical issues have been creating problems," another farmer, Appala Naidu, said.
Time of India
18-07-2025
- Business
- Time of India
Dependent on China, drowning in red tape: How a broken policy regime is killing India's small fertiliser manufacturers
Small is beautiful—but not always. Take the micro, small, and medium-sized enterprises (MSMEs) in India's fertiliser industry, for instance—more specifically, the smaller units engaged in the manufacturing of specialty fertilisers . Many of them are even on the verge of collapse as they grapple with mounting pressure from rising imports, regulatory burden, and high input costs. India, an agricultural-dependent economy, relies significantly on imports to fulfil its fertiliser needs, even though domestic production has increased to 503.35 lakh tonnes in 2023-24 from 425.95 lakh tonnes in 2019-20. And its top suppliers are China, Russia, Saudi Arabia, Oman, and the US. According to industry sources, the country imports roughly 20% of urea , 50-60% of DAP (Di-ammonium Phosphate), 80% of specialty fertiliser , and 100% of MOP (Muriate of Potash). Additionally, it also imports other fertilisers like NPK compounds and raw materials like phosphate rock and sulphur for DAP production. Explore courses from Top Institutes in Select a Course Category Digital Marketing CXO Design Thinking Technology Data Analytics MCA Data Science PGDM Others Degree Finance Artificial Intelligence Cybersecurity Data Science healthcare others Management Project Management Public Policy Product Management Healthcare Operations Management Leadership MBA Skills you'll gain: Digital Marketing Strategies Customer Journey Mapping Paid Advertising Campaign Management Emerging Technologies in Digital Marketing Duration: 12 Weeks Indian School of Business Digital Marketing and Analytics Starts on May 14, 2024 Get Details Skills you'll gain: Digital Marketing Strategy Search Engine Optimization (SEO) & Content Marketing Social Media Marketing & Advertising Data Analytics & Measurement Duration: 24 Weeks Indian School of Business Professional Certificate Programme in Digital Marketing Starts on Jun 26, 2024 Get Details Recently, China, which accounts for nearly 80% of India's specialty fertiliser imports, imposed restrictions on exports. It has also suspended export permits for DAP since mid-2023. For India, this is a chance to augment its domestic capacity and become self-reliant in fertiliser. While the disruption in imports has highlighted the vulnerabilities in the supply chain, the 'ongoing preference for imports' in policy frameworks, as per local manufacturers, has impeded the growth of India's domestic specialty fertiliser players. According to them, subsidies and preferential trade rules for imported fertilisers have created an uneven playing field. According to industry estimates, India imported 150,000-160,000 tonnes of specialty fertilisers during the June-December 2024 period, with China supplying 70-80%. Although specialty fertilisers represent a small percentage of overall demand, their popularity is rapidly increasing, as they offer customised nutrient delivery that caters to specific crops, soil types, and growth stages. They improve crop yields and quality while minimising ecological impact by increasing nutrient use efficiency and reducing nutrient losses to the environment. Live Events iStock Specialty fertilisers include water-soluble fertilisers (WSFs), liquid fertilisers, micronutrient fertilisers, nano fertilisers, bio-stimulants, and organic formulations. Rajib Chakraborty, President, Soluble Fertilizer Industry Association (SFIA), says, 'The specialty fertilisers, particularly water-soluble fertilizers (WSFs), began to make inroads into the Indian market in the late 1990s. The real momentum in adoption and commercialisation of WSFs came in the early 2000s, when states like Maharashtra emerged as early adopters. And its adoption has increased by 20-30% over the years.' Specialty fertilisers include water-soluble fertilisers (WSFs), liquid fertilisers, micronutrient fertilisers, nano fertilisers, bio-stimulants, and organic formulations. While the big players in the country are focused on the production of major fertilisers like urea, DAP, MOP, and NPK, the specialty fertiliser segment is primarily led by MSMEs. While demand, especially for specialty fertilisers, is rapidly rising, the growth of India's domestic fertiliser production has been sluggish. Experts and industry stakeholders assert, among other things, that policies favouring imports have put local manufacturers at a disadvantage. 'No licenses are required for foreign suppliers,' as per the current regulations. 'An importer can simply submit a scanned letter to add the source, which allows them to sell across all operational states without facing the additional regulatory burdens of the Fertiliser Control Order (FCO),' says Rajib Chakraborty of SFIA; in contrast, an Indian manufacturer must navigate complex regulatory requirements, which include obtaining multiple licenses, maintaining offices, and setting up warehouses in each state where fertiliser is distributed. Source: Ministry of Fertilisers (Annual Report 2023-24) Big Rules, Small Players For MSMEs, these are huge asks and not sustainable. Even though large manufacturers are subject to the same regulatory framework as smaller ones, their experience often differs due to scale advantages, according to Suhash Buddhe, Vice President, Vidarbha Industries Association. They can 'more easily navigate and comply with regulations due to their size and resources,' he says. MSMEs voice their grievances about the stringent FCO rules. They believe that their small size, which usually means selling goods worth around Rs 1 crore in a state, limits their operational flexibility. On the other hand, large companies with sales of Rs 100-200 crore can use warehouses to directly import and store consignments, thus bypassing certain regulatory hurdles that smaller units struggle with. Buddhe says, 'Many prefer imports over 'Made in India' products, not because of quality or price but due to complex regulatory hurdles and the inability of Indian SMEs to maintain licenses across multiple states. Even public sector undertakings (PSUs) are no exception.' iStock The FCO was enacted under the Essential Commodities Act, 1955, to regulate the quality of fertilisers and their distribution. ET Digital reviewed a PSU's tender for soluble fertilisers, which stipulated bidders (manufacturers/traders) to have an authorisation certificate for selling products in the applied state(s). The tender document specifies this condition. 'Similar cases have been observed in Government e-Marketplace (GeM) and direct tender invitations. Many PSUs are not floating the tenders through GeM, which promotes locally manufactured products. They are floating open tenders,' says Chakraborty. A senior official from the agriculture department states that the government is actively working to promote ease of doing business nationwide. Since fertiliser is a concurrent subject, many states have streamlined their systems, with ongoing efforts to further enhance the process, he notes. Meanwhile, Devesh Chaturvedi, Secretary, Agriculture & Farmers Welfare, says, 'There is always a scope for improvement.' Former Union Minister Suresh Prabhu acknowledges the difficulties faced by small fertiliser companies, especially in terms of compliance. 'Fertiliser companies face numerous issues, many of which are legitimate and require immediate attention,' says Prabhu. ET Digital attempted to contact officials in the concerned department through email and phone calls for this report; however, no response was received by the time the story was published. State officials overseeing fertiliser and agriculture departments declined to comment when contacted by phone. Some officials acknowledged the issue of over-regulation impacting SMEs but refused to provide further details. Although there has been no official response on this matter, experts and stakeholders point to structural issues in the regulatory framework. 'Regulatory framework is outdated' The FCO was enacted under the Essential Commodities Act, 1955, to regulate the quality of fertilisers and their distribution, particularly to facilitate the effective delivery of government subsidies and promote domestic production. Since then, the FCO, which is jointly administered by central and state authorities, has undergone several amendments. However, it has struggled to keep pace with the changing requirements of India's domestic agriculture, according to experts. They say the framework is outdated today, reflecting remnants of the 'Inspector Raj' and 'License Raj' era. Neeraj Kedia, Banking Committee Chairman and former President of the Federation of Indian Micro and Small & Medium Enterprises (FISME), notes that fertilisers today are vastly different from those in 1985. 'The fertiliser list initially included basic nutrients like nitrogen, phosphorus, and potassium (NPK), primarily urea and DAP. Over time, it has expanded to include secondary nutrients like magnesium and calcium, along with micronutrients such as zinc and boron, making the regulatory framework more complex and wide-ranging,' he explains. With over 100 fertilisers currently listed under the FCO, along with countless mixtures of macro- and micro-nutrients, the current framework seems overly complex, says Kedia. 'Given the varying conditions across large states like Rajasthan or diverse regions like Andhra Pradesh, a label claim system could be more practical, he suggests. This, he argues, will empower industry while enabling 'consumers to make informed decisions based on specific nutrient requirements.' According to FCO rules, an SME involved in fertiliser needs to register separately in each state where it wants to operate. 'A few years ago, an initiative was launched to create a common portal for fertiliser manufacturers to register and operate nationwide. However, the effort reportedly didn't succeed, and the project ultimately fizzled out,' notes Kedia. Experts and stakeholders point out that the FCO bestows considerable authority upon individual inspectors, enabling them to suspend or shut down operations at their discretion. Experts point out that since fertiliser falls under the Essential Commodities Act, various departments may oversee it, depending on the state. 'In some cases, a single manufacturing unit may face oversight from as many as 32 inspectors, with the actual number on the ground often exceeding official records,' says Buddhe. From central government officials, such as the Deputy Director of Agriculture, Central Insecticide Inspector, Central Fertiliser Inspector, and Plant Protection Officer, to state government officials, such as the Chief Quality Control Officer, Chief Inspector (Seed), Deputy Director (Fertiliser), Technical Officer (Fertiliser), and Technical Officer (Insecticide), oversee the operations of fertiliser units. At the grassroots level, the Taluka Agriculture Officer adds yet another level of scrutiny. Additionally, flying squads from the Department of Agriculture conduct sudden inspections, he notes. 'This (several levels of inspection) fragments operations and increases compliance costs by 30-40% for MSMEs. Small manufacturers spend Rs 3-5 crore annually on compliance, equivalent to 20% of their R&D budgets, making innovation unsustainable,' adds Buddhe. A Punjab-based fertiliser SME's promoter admitted that his company incurred huge expenses to obtain licenses, maintain quality control systems, and meet the specific packaging and labelling requirements of FCO. 'We have experienced a significant surge in costs over the years, and increasing input costs have further exacerbated the situation,' he says. 'The plethora of complex and uncertain rules and regulations is creating a challenging environment for small fertiliser manufacturers in the country,' says another SME based out of Uttar Pradesh. Suresh Prabhu states that in 1999, during his tenure as the Minister for Fertilizers, a new policy was launched to address the industry's issues arising from excessive regulations, with the ultimate goal of phasing out the ministry itself. 'With the advancements in logistics and digital technologies enabling timely compliance, I believe it's time to revisit and update the fertiliser policy that was drafted in 1999. A new policy is overdue,' Prabhu says. However, regulation isn't the only challenge for fertiliser MSMEs in the country; they also deal with a skewed subsidy structure that favours larger companies, says Kedia. 'The current subsidy structure favours large manufacturers, giving them an uneven advantage. They receive subsidies on products with added micronutrients like zinc and boron. However, smaller players selling standalone micronutrient products don't get similar subsidies, putting them at a disadvantage.' After overcoming these initial hurdles, fertiliser MSMEs confront further challenges related to quality control for their smooth operations. Quality control The 2011 paper 'Fertilizer Quality Control in India: The need for a systemic change' by Sumita Kale and Laveesh Bhandari, published by FISME, stands out as one of the very few comprehensive studies on this topic. It highlights excessively strict tolerance limits and inadequate testing methods, especially for micronutrient fertilisers, as pressing concerns. The paper indicates that there are limited testing labs, which are poorly equipped and understaffed; additionally, it notes that sampling procedures are defective, all of which together undermine the accuracy and credibility of results. iStock Experts and stakeholders point out that the FCO bestows considerable authority upon individual inspectors, enabling them to suspend or shut down operations at their discretion. Numerous problems remain unresolved to this day, according to experts and stakeholders. The Central Fertiliser Quality Control & Training Institute (CFQCTI), Faridabad, has 'no information' on registered fertiliser dealers across the country, as per the RTI response received by ET Digital. Additionally, there was no definite number provided for fertiliser samples analysed and found non-standard in the last five years. Experts say that, despite increased capacity, testing labs are still unable to manage the minimum required samples, indicating a shortage of full-time inspectors. To maintain testing standards, the central government, however, established the National Accreditation Board for Testing and Calibration Laboratories ( NABL ), which accredits testing labs. Under the FCO, only 'approved' labs can conduct tests. Chakraborty highlights that most state laboratories fail to meet testing standards, with less than 5% being NABL-accredited. He recommends setting a strict deadline for NABL accreditation, requiring states to comply within a set timeframe, and not using non-NABL lab reports for criminal action against SMEs. 'We have increased the sanction of money to states for NABL accreditation of laboratories. We are actively addressing these issues,' says Agriculture Secretary Chaturvedi. Currently, there are 84 operational Fertilizer Quality Control Laboratories in India, including the four set up by the Central Government—the Central Fertilizer Quality Control & Training Institute, Faridabad, and its three associated regional laboratories. 'One nation, one license' To streamline operations of fertiliser units, Rahul Mirchandani, President of the Indian Micro-Fertilizer Manufacturers Association (IMMA), suggests a single licence for the entire country. 'With 'one nation, one license,' the FCO regulations should align with tax regulations, allowing businesses to bill and operate nationwide without state-specific constraints. This would eliminate the need for redundant licenses and reduce overhead costs,' says Aried Agro Crop Science's Chairman, Mirchandani. Experts believe key reforms are necessary to reduce import dependency, including limiting inspectors' powers and removing non-subsidised fertilisers from the Essential Commodities Act. They argue that stringent regulations, where minor lab errors can lead to jail time, create excessive fear among manufacturers and importers. Associations also demand a centralised portal for fertiliser. 'A centralised, pan-India licensing framework with a single-window digital compliance portal can reduce friction for manufacturers. Importers should also align with similar documentation and regulatory standards to ensure a level playing field. Additionally, creating a dedicated Department of Fertiliser and Agriculture Department liaison cell and encouraging PSUs to allocate a percentage of tender volumes to Indian small-scale manufacturers,' says Abhishek Wadekar, Founder & Chairman, Tradelink International. iStock Experts say that, despite increased capacity, testing labs are still unable to manage the minimum required samples, indicating a shortage of full-time inspectors. Another senior government official agreed that a central portal for fertiliser manufacturers to register and operate across the country would be beneficial. To promote local fertiliser production, stakeholders are calling for clearer clause definitions and less regulation. They suggest distinguishing between 'spurious' (intentional adulteration) and 'deficient' (unintentional nutrient deficiency). Currently, even a 0.1% deviation beyond tolerance limits can lead to spurious labelling and criminal prosecution. Standardising documentation across states is also a priority for them. Wadekar proposes addressing this gap through measures like harmonised compliance, centralised registration, and support mechanisms. Nishant Kanodia, Chairman, Matix Fertilisers and Chemicals, suggests adopting a risk-based, digital-first compliance model from other sectors could be beneficial since it would focus inspections on high-risk areas and simplify procedures for manufacturers with a good compliance track record.
