PROFILE OF NAGARJUNA FERTILIZERS AND CHEMICAL LTD

KAKINADA

4.1 The Founder

Shri K V K Raju - An eternal source of inspiration

Nagarjuna Group is a dream willed into reality by its visionary Founder

Shri KVK Raju. Shri KVK Raju a first generation technopreneur was born in a

humble agricultural family in Andhra Pradesh on November 28, 1928. On

graduating from Banaras Hindu University and the Madras Institute of Technology

he went on to complete his Master's in Mechanical and Industrial Engineering

from Michigan State University and the University of Minnesota, USA. After a

short stint in the American Industry he returned to India and worked for short

periods at Caltex Oil Refinery, Orient General Industries and Associated Electrical

Industries. Finally, he joined Union Carbide of India and worked with them for 15

years. While working with Union Carbide, KVK's deep-rooted urge to serve

society through industry impelled him to start out on his own. Thus was born

Nagarjuna Group in 1973 with an investment of Rs. 50 million. The Group has

since then came a long way to become a diversified conglomerate with an asset

base of Rs. 43 billion.

A recipient of various awards for his outstanding contribution to the

industry and society, KVK, was a firm believer in the adage "practice what you

preach". A self-made man KVK practiced simple living and high thinking. He

dreamt big and worked with an unstinted focus of mind and body to make his

dreams come true. KVK was a visionary with firm belief in his mission to serve

society through industry. It is this belief, which continues today to be the guiding

light of Nagarjuna Group.

4.2 VISION AND VALUES:

NFCLVISION:Global “Leadership” in Plant Nutrition

Excellence in products/performance, processes/costs and relationships

NFCL VALUES

Deliver solutions that will please NFCL customers

Deliver returns that motivate NFCL investors

Take actions that strengthen NFCL and inspire the best in others

(by setting an example in relationships, integrity, honesty, humility and hard

work)

by understanding the deep and fundamental needs of NFCL People, NFCL

Customers, NFCL Investors and NFCL Ecosystem (Alliances, Community and

Environment)

Feeding the Future

Nagarjuna is an integrated Agriculture group with core competencies in the

fields of plant nutrition, protection, irrigation, farm services and food processing.

NFCL products and services are designed to provide consumers access to safe,

nutritious and tasty food and growers with maximum economic returns. NFCL is

one of the most recognized agricultural brands in India.

4.3 Evolution

1985: Plant Nutrition business with nitrogenous fertilizers. Subsequently,

started marketing and manufacturing a comprehensive range of nutrient products

and today it is one of the largest plant nutrition companies in India.

1992: Ventured into Plant Protection business and today has a well-

balanced product portfolio for counteracting all the major pests and diseases in

various crops and is in the top 3 plant protection companies in India. Rated as

eighth fastest growing company in the overall growth category in India.

1993: Forayed into Micro Irrigation business through Joint Venture with

reputed Global Micro Irrigation Companies. Today it accounts for 25% of

products sold in drip irrigation.

1994: Started offering Agricultural Input services by providing complete

farm advisories through its Farm Management Services.

1995: Started Agricultural Output business with processing, trading and

exporting of agro products.

1995: Ventured in to Energy sector, Entered in to power generation by

setting up Nagarjuna Power Corporation Limited.

1997: Entered in to petroleum by setting up Nagarjuna Oil Corporation

Limited Consolidating its core activities, today the group's major operations cover

Agro and Energy sectors.

2000: Started providing IT based services, using information technology to

develop knowledge and solutions critical for improvement of farm profitability.

2007: Project work to enhance the capacity of Kakinada Plants was started.

The Carbondi-oxide Recovery (CDR) Plant was ordered in July, 2007 and Mini

Revamp order for detailed engineering was given to PDIL in October, 2007.

Plant Nutrition

Nagarjuna is one of the leading manufacturers and suppliers of plant

nutrients in India. The potential benefits from improved plant nutrition are

virtually limitless. With the right plant nutrition it is not surprising that the grower

can produce higher yields, better flavored and greater nutritional content crops of

vigor that are less prone to pests and disease attack – goals which form the core of

NFCL plant nutrition strategy. It is widely recognized by agronomists that plant

nutrition is responsible for approximately one-third of the increase in world grain

production. The balance is provided by such factors as better irrigation, improved

seeds, cultivation practices, pest control and planting density.

NFCL supply a broad portfolio of nutrition products and services that

include both macro and micro fertilizers. NFCL employ information technology

and soil and tissue analysis for nutrient recommendation and NFCL plans include

further strengthening of NFCL analysis portfolio with advanced tools to measure

the actual nutrient requirements and status and deliver customized nutrition

solutions to meet the exact needs of the customer

Plant Nutrition / Products & Services

NFCL strive for total customer satisfaction through reliability, timeliness,

courtesy, honesty and value for money. NFCL Endeavour to provide the highest

quality products at the lowest cost possible to deliver a good rate of return.

4.4 Specifications and applications of products

Urea (46% N) (White free flowing) – Prilled

Specifications as per the Fertilizer Control Order 1985

I. Moisture per cent by weight, maximum 1.0

II. Total nitrogen, per cent by weight, (on dry basis) minimum 46.00

III. Burette per cent by weight, maximum 1.5

IV. Particle size--90 per cent of the material shall pass through 2.8 mm IS sieve

and not less than 80 per cent by weight shall be retained on 1 mm IS sieve

Application

• Fertilizer

• Anhydrous Ammonia

Specifications as per the Fertilizer Control Order 1985

i. Ammonia per cent by weight, minimum 99.0

ii. Water per cent by weight, maximum 1.0

iii. Oil content by weight, maximum 20 ppm

Application

• Used for production of Urea, DAP, Ammonium Sulphate and Ammonium

Nitrate (for fertilizer, explosives, herbicides and insecticides)

• Used for water treatment, fermentation, tanning and food additives

Diammonium Phosphate (18-46-0) – DAP

Specifications as per the Fertilizer Control Order 1985

i. Moisture per cent by weight, maximum 1.5

ii. Total nitrogen per cent by weight, minimum 18.0

iii. Ammoniac nitrogen form per cent by weight, minimum 15.5

iv. Total nitrogen in the form of urea percent by weight, maximum 2.5

v. Neutral ammonium citrate soluble phosphates (as P 205) per cent by

weight, minimum 46.0

vi. Water soluble phosphates (as P 206) percent by weight, minimum 41.0

vii. Particle size -90 per cent of the material shall pass through 4 mm IS sieve

and be retained on 1 mm IS sieve. Not more than 5 per cent shall be below

than 1 mm size.

Muriate of Potash – MOP (Potassium Chloride)

Specifications as per the Fertilizer Control Order 1985

i. Moisture per cent by weight, maximum 0.5

ii. Water soluble potash content (as K20) per cent by weight, minimum 60.0

iii. Sodium as NaCl per cent by weight (on dry basis) maximum 3.5

iv. Particle size-95 cent of the material shall pass through 1.7 mm IS sieve and

be retained on 0.25 mm IS sieve and be retained on 0.25mm IS sie

Alliances

Nagarjuna has been partnering with some of the well distinguished names

in the global arena.

HaldorTopsoe, Denmark,

Snamprogetti, Italy

A J Sackett& Sons Co., USA

Yara, Norway,

Haifa, Israel

4.5 Plant Protection

The world’s population is increasing, and with it the need for qualitatively

better food. Plant Protection has thus become indispensable as it secures the

valuable yield by giving the appropriate protection from the time of planting the

seed until the Crop harvesting stage. During its life cycle, a crop will encounter

many pests and diseases that can even destroy an entire harvest Insects, Mites,

Weeds, Fungi, Virus and Bacteria.

Nagarjuna is one of the leading suppliers of plant protection products in

India. NFCL goal is to secure harvests for farmers and protect the environment

with the well being of all. NFCL offer a complete spectrum of plant protection

products that are Selective, Effective at low concentrations, Environmental

friendly, Crop specific and Affordable. Nagarjuna has a good range of required

Insecticides, Fungicides, Herbicides and Miticides, which is one of the key

offerings as in the case with Nutrition, with Pest Management Services also

playing a crucial role.

Nagarjuna Group made its initial foray into the Crop Protection Business in

1992 with investments in the Pesticide Formulations Manufacturing followed by

the Technical Grade Manufacturing in the year 1994. The Group has since made

steady progress in this area and over a span of just fifteen years has expanded its

activity base, acquiring a strong brand image and leadership position in this sector.

Incidentally, Nagarjuna group figures among the top ten Agrochemical Companies

in the Agrochemical Industry in India with respect to Domestic Market share, even

out beating some of the leading MNC’s operating in India.

NagarjunaAgrichem Limited is a public limited company focused mainly

on Nagarjuna’s Crop Protection Business. It has a World Class major Technical

Grade Agrochemical / Fine Chemical manufacturing facility at Srikakulam in

addition to a large Formulation Grade Agrochemical manufacturing facility at

Ethakota and a smaller single granular product facility at Shadnagar. It has been

Nagarjuna’s philosophy to work closely with some of the leading MNC’s who are

market leaders in order to get access to new patented products apart from helping

them in key areas like Product registration, Custom Synthesis, Access to Domestic

Markets using Nagarjuna’s widespread Customer network across India etc.

The R & D in Nagarjuna plays an important role in developing the process

for Generic Products at an affordable cost in addition to providing Custom

Synthesis for processes related to new products to be launched by the MNC’s or

for improving their existing products. Many of the products delivered by the R &

D over the past 7 years have helped Nagarjuna in launching those products

required by the farmers in the Indian Domestic Market at the right time, in

addition to addressing the growing diverse needs of Quality conscious Customers

in the highly developed countries like USA, Europe and Japan. In addition to

catering to a major part of the Indian sub-continent, NFCL also export some

branded pesticide formulations to some countries in the Middle East and Africa.

4.6 Agricultural Output

NFCL have wide experience in farm output procurement, primary

processing, storage, secondary processing, packaging, branding and marketing,

and also trading and exporting. NFCL experience covers sugar, fruits and

vegetables, cereals, spices and sea foods.

Services

Nagarjuna offers to its customers its vast expertise in areas like plant

management, project management, technical services, supply chain management

and sales & marketing.

Services/Plant Management

A Better Way to Manage Plants & ProjectsNagarjuna offers its expertise on

a long-term basis for the management of chemical process plants, especially to

ammonia and urea complexes worldwide.

The team has rich experience of working in various chemical, fertilizers,

petrochemical industries and power plants for considerable period and has

operated the plants successfully on higher capacity utilization and efficiency

levels. This group has also commissioned new plants in-house as well as for

external clients within the time schedule set by the client. The group continuously

updates the knowledge and skills by participating in various training programs,

workshops, symposia held both in India and abroad.

Services Spectrum

NFCL team of experts provides world-class Operations & Maintenance

Services to operating plants and new projects.

Pre-commissioning, Commissioning and Operation of Plant

Maintenance : Preventive, Breakdown and Turnaround

Inspection and Condition Monitoring

Environmental Services and Systems

Safety Services and Systems

Laboratory and Quality Assurance

Plant Technical Services – technical and energy audit

Plant problem diagnostics and troubleshooting

Training

Benefits of outsourcing to Nagarjuna:

A huge cost towards permanent staff especially in initial years of plant

operation can be saved.

High class technical services are available from day one saving plant

upsets, breakdowns and under-performance of the plant in the crucial initial

years for quicker payback of project cost.

Nagarjuna as the interface with Process Licensor companies for ensuring

completeness of technical information from them.

Services are renewable after expiry of contract on mutually acceptable

terms.

Highly accomplished team of NFCL professionals will achieve top class

performance adding value to standard operations.

Longer plant life as result of continuous and predictive plant monitoring by

dedicated team of NFCL professionals.

Clients’ personnel may be trained by NFCL on all aspects of plant

operation and maintenance, whenever, required.

All plant management services are available to client on a ‘single window’

concept.

Services/Project Management

Nagarjuna has to its credit, more than 35 major assignments and

successfully completed projects creating an array of satisfied clients. It has earned

the reputation of being a veritable treasure of technical knowledge, skill and

professional competence. In the course of setting up projects, it has worked with a

number of world renowned process licensors and engineering/contracting

companies and is well versed with the engineering codes and practices followed

internationally.

Nagarjuna provides a complete range of services needed to conceptualize,

design, engineer and construct projects to meet the specific requirements of its

clients. Its project management services comprise directions and co-ordination of

the activities leading to the execution of a job in accordance with terms of the

contract, in compliance with the job schedule and to the satisfaction of the client.

The efforts of various agencies such as licensors, vendors, contractors/sub

contractors and the company’s different departments are brought together in a

logical pattern to result in fruitful culmination of the project. It also has well

proven capabilities in setting-up large scale Ammonia, Urea and Power plants

from concept to commissioning. The operating plants at Kakinada are a standing

example of the same.

Its association with clients extends beyond the commissioning of their

plants through monitoring and providing excellent operation and maintenance

services.

Feasibility Services

Nagarjuna’s experience in a variety of fields is available for expansion or

diversification of their activities. Services offered range from carrying out

preliminary feasibility studies to detailed feasibility reports and include

technology evaluations, detailed economic analysis etc. In-house software as well

as bought out software packages are used for the studies depending upon specific

requirements.

Services/Technical Services

In accordance with global need to conserve energy, Nagarjuna has

developed comprehensive and systematic energy audit techniques for new as well

as operating plants. It has the expertise and capability to critically examine energy

usage and requirements for different segments of each plant. It undertakes energy

audit studies and provides a comprehensive and graded list of energy saving

investments.

As plants handling hazardous materials are growing in size and complexity,

Risk Management is assuming critical dimensions. Nagarjuna has the expertise to

provide complete services in the area of Risk Management & Safety Engineering.

It also has the capability to help the client in site selection, plant and equipment

layout, optimum offsite storage capacity etc. taking total risk involved into

consideration to ensure safety of the operating personnel and the community from

fire, explosion or toxicity.

The team is composed of highly accomplished mechanical, metallurgical

engineers and skilled technicians to provide scheduled inspections and condition

monitoring online for various rotating and static equipment. It also takes up

comprehensive inspection of majority of equipment and pipelines during

turnaround. People in this section have experience ranging from 8 to 14 years and

trained in different NDT methods up to ASNT/ISNT Level-II, who are capable of

taking-up high quality inspection, health monitoring and also analysis jobs on the

field and in laboratory.

4.7 Supply Chain Management

Nagarjuna views Supply chain optimization as a core focus area. For

continuous improvements and streamlining of operations, supply chain is viewed

in totality and hence headed by a senior level executive with long and

distinguished experience in management of different functions of the supply chain.

The supply chain is characterized by best practices and systems which are

continuously reviewed for improvisation opportunities. The processes are

standardized and are ISO 9000 certified.

The main functions are:

Commercial: The function is characterized by standardized processes right from

material requisition to vendor evaluation and selection.

Transportation & Warehousing: The operations are spread all across India and

reach deeper into the far flung villages across the country. NFCL handle material

across rails, roads and waterways to strategically chosen warehouses handling

seasonal material across markets. NFCL storage, transportation and handling

practices ensure best quality product reaches customer with minimal waste and

losses.

NFCL have specialized software that aid in optimizing its logistics

operations across the critical performance criteria of costs, speed, quality,

reliability and flexibility of operations to meet the customer requirements

profitably.

4.8 Sales & Marketing

Channel Management: Unlike many industries NFCL’s strength is its ability to

serve the large base of customers through a wide spread dealer network. NFCL

sales operations are managed by the latest SAP system installed in all the

marketing offices while NFCL sales personnel maintain direct and continuous

contact with the vast dealer network to serve them efficiently.

Customer Management:Nagarjuna has always been in the forefront in offering

value added services directly to NFCL customer right at his doorstep. NFCL farm

advisory and information service provides farmers with best agronomic, plant

nutrition and protection advisories by farm visits as well as by online services

through internet kiosks. NFCL scientists train farmers visiting them in the fields as

well as by conducting specialized training programs at its research and farm

centers.

Processes

NFCL constantly benchmark its processes with the best in the world across

the supply chain and support services. NFCL extensively make use of IT and

outsourcing to give them the edge.

Emerging Business Practice

The Emerging Business Practice (EBP) of the group is committed to

creating, developing and implementing breakthrough product concepts and

business models for the current and emerging business clients of the group. While

the opportunities vary, they are all based on providing access to cutting edge

thinking and technology.

EBP provides professional talent (internally from across the group and

externally) and technical resources specifically tailored to meet the service needs

of NFCL current and emerging business clients within the group. NFCL offer

services and support ranging from strategy development, science and technology,

staffing, alliance development, outsourcing, design, project execution, business

development and management support.

Health & Safety:

NFCL commitment to Environment, Health and Safety systems is an

integral part of its business strategy and takes precedence over all other

considerations. NFCL maintain the highest standards, most robust and safe

technologies, equipment and products as well as qualified, experienced and trained

manpower, which are essential to its future growth.

NFCL EHS mission also encompasses responsibilities of protecting the

local community and environment from potential hazards.

Community

An organization must continually earn the right to operate in the communities and

countries in which it produces and sells. NFCL are committed to giving back more

to the society than what NFCL take from it in terms of its resources.

The organization is not a stand-alone economic entity but an integral part of the

society. NFCL believe that the organization fulfills its obligations by sharing its

resources for community building activities, which are ultimately reinvested in the

business through the various stakeholders who form a part of the community: the

customers, employees and investors.

4.9 Manufacturing Facility

Urea manufacturing facility - Kakinada

One of the largest Urea complexes in India, the plant is spread over 1130

acres. It is strategically located at Kakinada, a seaport on the east coast of India in

the state of Andhra Pradesh. The company enjoys close proximity to raw materials

and a ready market at its doorstep.

The Natural gas based plants operate with one of the lowest energy

consumption rates in the world.

Charting out an ambitious future, the plant has expanded its operating

capacity from the current 1.4 Million Tons to about 1.5 Million Tons per annum

after completing the de-bottlenecking and the revamp of the project. The

expansion has been planned keeping in mind the availability of additional Natural

gas from huge Natural gas reserves in the nearby Krishna- Godavari basin.

NFCL strive to adopt the global best practices in all areas of operations.

The world class operations have resulted in long uninterrupted runs of plants for

over 365 days with maximum availability of plant on-stream days. Minimum

possible human interference and best maintenance practices keep equipment and

facilities fit for intended use under safe working conditions. Process simulation

software like ASPEN PLUS and drafting software like AUTOCADD are being

used for plant simulations / modifications and in turn to minimize energy

consumption, maximize production and maximize asset utilization.

The plant also has an exhaustive documentation section and technical

library with over 1300 Technical books and journals. The library also houses more

than 1250 national and international standards.

Maintenance

Best maintenance practices like predictive / proactive maintenance and

reliability centered maintenance are adopted in the plant to have zero equipment

breakdowns and zero accidents due to equipment failure.

Quality Control

Strict adherence to quality in every aspect of production. Laying stress on

technology, the plant maintains strict quality control of products with online

product sampling and product quality monitoring. This has resulted in minimal

fines and burette in the product.

4.10 Certifications & Recognitions:

• NFCL bagged two awards from the Fertilizer Association of India

(FAI), New Delhi. It won the prestigious FAI Environmental

Protection Award in the nitrogenous fertilizer plants category and

stood as joint winner for excellence in Safety Award.

2009

• NFCL has bagged Green Leaf 2nd runner-up award in the Global

Competition for Excellence and Innovation in Safety, Health and

Environment held by International Fertilizer Industry Association

(FAI).

2009

• Certificate of Appreciation for implementing the process safety

management system (PSMS) by national safety council, A.P.

Chapter, Hyderabad.

2008

• NFCL bagged two awards from the Fertilizer Association of India

(FAI), New Delhi. It won the prestigious FAI Environmental

Protection Award in the nitrogenous fertilizer plants category and

award for the best article in ‘Production and Technology

2008

• NFCL has been awarded with Rashtriya Chemicals and Fertilizers

Award by the FAI for the best article in Production and

Technology.

2007

• NFCL has won the Best Technical Innovation Award from

Fertilizer Association of India for performance excellence in the

field of production technology.

2006

• Golden Peacock National Quality Award for 1995 by Institute of

Directors, New Delhi

1996

• ISO 9002 Certification from BVQI, Netherlands 1995

FIGURE 4.1: ORGANIZATION STRUCTURE

CMD

Director

& COO

Director‐Technical

Director‐ BD & SP

CEO

All Finance Dept.

HPD

IT

OperationsPlant KKD

MI Plant Marketing

Logistics

R&D

Projects

Public Relations

Internal Audit

Legal & Secretarial

FIGURE 4.2: DISTRIBUTION CHART

Head Distribution

Logistics officer

Planning Warehousing Traffic Imports