Fertiliser Industry
Let’s start with the soil. Imagine you are a student who studies hard, but your body lacks some nutrients—say, iron or calcium. Even if you try hard, you’ll get tired easily, and your performance will drop. Similarly, Indian soils are naturally deficient in key nutrients—especially Nitrogen (N), Phosphorus (P), and Potassium (K). These are like the “iron, calcium, and vitamin D” of soils. Without these, the crops can’t grow well.
So, just as we take supplements, our soils too need chemical fertilisers—which are rich in N, P, and K. And when we started using them seriously, especially during the Green Revolution, we saw a dramatic increase in food production. Fertilisers, quite literally, fed our agricultural backbone.
Fertilisers are not made in one uniform way. They are broadly of three types:
- Nitrogenous fertilisers – These are the most used ones. They need naphtha, natural gas, or coal as raw materials.
- Phosphatic fertilisers – Made from phosphate minerals.
- Potassic fertilisers – Made from potash minerals, which India mostly imports.
After this brief discussion about fertilisers let’s now understand the locational factors—i.e., why a fertiliser factory is built in one place and not another.
Please note that for more information about the fertilisers you can refer to the agriculture section.
Locational Factors: Where Are Fertiliser Plants Set Up, and Why?
Now just simply imagine you want to open a juice factory. Would you set it up near the orange orchards or far away from them? Obviously near! The same logic applies to fertilisers: factories are ideally placed near the source of raw materials or near the consumer markets (farmers).
Let’s break down the reasons:
a. Proximity to Petrochemical Sources (for Nitrogenous Fertilisers)
- Around 70% of India’s nitrogenous fertiliser plants use naphtha (a petroleum product).
- Therefore, they are located near oil refineries—just like juice factories near orange farms.
- Some also use coal, coke, or lignite—available in areas with steel plants or coalfields.
b. Availability of Phosphate Minerals (for Phosphatic Fertilisers)
- These fertilisers need phosphate rock, mainly found in Uttar Pradesh, Madhya Pradesh, and Rajasthan.
- Some factories are also dependent on imported phosphate, so they are placed close to ports—to reduce transport cost.
c. Gas Pipeline Infrastructure
Earlier, fertiliser factories had to be near oil or gas fields. But today, gas pipelines carry raw materials to long distances.
- For example, the HBJ (Hazira-Bijapur-Jagdishpur) gas pipeline allowed six fertiliser plants to emerge in Vijaypur, Jagdishpur, Aonla, Gadepan, Babrala, and Shahjahanpur.
- These areas earlier had no raw material source, but now they get gas through pipelines.
So now, fertiliser plants are also found in interior areas, not just near refineries or mines.
Fertiliser Industry as a Forward Linkage to the Natural Gas Refining Industry
When the output of one industry becomes the input for another industry, it is called a forward linkage.
- For example, natural gas is the output of the natural gas refining industry, and it becomes a key input in the fertiliser industry.
- Hence, the fertiliser industry is referred to as a forward linkage industry to the natural gas refining sector.
📌 Remember: Forward linkage means – moving forward in the production chain. Input (raw material) → Output (used in next industry).
Role of Natural Gas in Fertiliser Production
Now the next question: Why is natural gas so important to the fertiliser industry?
Because it serves two major purposes:
- As a raw material – particularly in producing nitrogenous fertilisers like urea, ammonia, and ammonium nitrate.
- As an energy source – to heat reactors, run compressors, and generate electricity for large-scale operations.
Let’s understand this with a core example from the industry:
The Haber-Bosch Process
- This is the backbone of nitrogen-based fertiliser manufacturing.
- The process requires two inputs: Hydrogen and Nitrogen.
- Here, natural gas is used to extract hydrogen through a process called steam reforming.
- Natural Gas (CH₄) + Steam (H₂O) → H₂ + CO
- This hydrogen is then combined with nitrogen (from air) to produce ammonia (NH₃).
- N₂ + 3H₂ → 2NH₃
- The ammonia becomes a base for urea (by reacting with CO₂) or ammonium nitrate (by reacting with nitric acid).
Natural Gas Is Indirectly Consumed
An important conceptual point:
Natural gas does not appear in the final fertiliser product, but it is essential in the process. So, the link is indirect, but critical.
Locational Pattern of the Fertiliser Industry
Since the cost and availability of natural gas directly impact the economics of fertiliser production:
➡️ Fertiliser plants tend to be located near:
- Natural gas refineries, or
- Pipeline networks that distribute natural gas.
🗺 Examples:
- Sawai Madhopur (Rajasthan)
- Shahjahanpur (Uttar Pradesh)
Both are located along the HVJ pipeline (Hazira-Vijaipur-Jagdishpur), one of India’s largest natural gas transmission corridors.
Global Distribution of the Fertiliser Industry
The global fertiliser industry is not randomly distributed. It follows a resource-based and demand-driven logic. Let’s examine the major regions one by one.
1. East Asia – The Global Leader
- China alone accounts for around 29% of the global fertiliser production capacity.
- The main region: Shandong Province, known for its:
- Phosphate rock (raw material for phosphate fertilisers)
- Potash reserves
- Natural gas (used for ammonia and urea production)
📌 Why is China dominant?
- Self-sufficiency in raw materials
- Strong industrial base
- Huge domestic agricultural demand
- Government support for fertiliser subsidies and exports
🧠 Also note: Japan and South Korea are smaller players but:
- Possess advanced fertiliser technologies
- Focus on high-efficiency and export-oriented production
✅ Key takeaway: East Asia is a combination of raw material abundance (China) and technological advancement (Japan & Korea).
2. Eastern Europe and Central Asia – Potash Powerhouses
- This region contributes 17% of global fertiliser production capacity.
- Countries like Russia, Belarus, and Ukraine are rich in potash—used mainly for potassium-based fertilisers.
📌 Important centre: Volga Region in Russia
- Major hub for nitrogen-based fertilisers
- Russia also exports large volumes of ammonia and urea
💡 Geostrategy: Since potash is concentrated here, global fertiliser prices are often impacted by geopolitical tensions in this region.
3. North America – Shale and Phosphate Driven
- USA has around 8% of the global capacity.
- Leverages its shale gas boom for cheap ammonia synthesis.
- Florida is a key area for phosphate rock mining, catering to both domestic and global markets.
🔹 Canada:
- Known globally for its potash production (especially from Saskatchewan)
- A major exporter to countries like India and China
✅ North America’s fertiliser strength lies in the combination of energy resources and mineral wealth.
4. West Asia and North Africa – Rock-Solid Phosphate Reserves
- Countries like Jordan and Morocco are among the world’s largest phosphate rock reserve holders.
- This makes them key players in phosphate-based fertiliser exports.
🌍 Saudi Arabia:
- Utilises its natural gas to produce ammonia and urea
- Emerging as a major player in nitrogen-based fertilisers
✅ These nations play a crucial role in the phosphate value chain, especially for developing countries with limited reserves.
5. South America – Brazil’s Agrarian Demand
- Brazil is the fertiliser giant of South America.
- Why? Because of:
- Strong agricultural economy (especially soy, sugarcane, maize)
- Use of domestic gas resources
- Heavy imports of potash, but local production of nitrogen and phosphate fertilisers
✅ Brazil’s fertiliser industry is largely demand-driven — it’s growing because agriculture is expanding.
6. Emerging Economies – India and Vietnam
- India:
- Focused on nitrogen and phosphorus-based fertilisers
- Heavy government involvement (subsidies, strategic imports, Make-in-India initiatives)
- Becoming a fertiliser hub in South Asia
- Vietnam:
- Growing due to rising food demand and domestic investments
🧠 These countries are moving from import-dependence to self-reliance and export capacity.
Distribution of Fertiliser Industry in India
The spatial distribution of fertiliser plants in India is deeply influenced by agricultural demand, availability of raw materials (especially natural gas), and infrastructure like pipelines and ports.
Let us study the regional pattern:
1. North India – High Consumption Zone
North India is the largest consumer market for fertilisers due to:
- Intensive agriculture (wheat, paddy, sugarcane)
- High cropping intensity
- Strong policy support (e.g. MSP, irrigation)
📍 Key States & Centres:
| State | Fertiliser Plants |
| Uttar Pradesh | Gorakhpur, Aonla, Panki |
| Punjab | Bathinda |
| Haryana | Panipat |
| Rajasthan | Sikar, Kota |
🔍 Note: Fertiliser consumption in this region is among the highest in India, which shapes the location of production units and distribution centres.
2. South India – Producer of Nitrogen & Phosphorus-based Fertilisers
South India has emerged as a strong producer region due to:
- Coastal access (for import of raw materials like phosphate rock)
- Natural gas availability (pipeline connectivity from KG Basin)
- A robust agricultural base (rice, cotton, pulses)
📍 Key States:
| State | Fertiliser Locations |
| Tamil Nadu | Tuticorin, Chennai |
| Telangana | Ramagundam |
| Andhra Pradesh | Kakinada, Visakhapatnam, Vijayawada |
🔍 Insight: Plants in this region focus mainly on urea, DAP (Di-Ammonium Phosphate), and complex fertilisers.
3. East India – Emerging Region with Growing Capacity
The eastern states have seen gradual growth in fertiliser production, supported by revival of sick units and increasing local demand.
📍 Key Areas:
| State | Fertiliser Plants |
| Bihar | Barauni (revived by HURL – Hindustan Urvarak & Rasayan Ltd.) |
| West Bengal | Haldia |
| Odisha | Paradeep (IFFCO plant for phosphatic fertilisers) |
🔍 Insight: East India historically lagged in fertiliser production but is catching up due to policy push and resource mobilisation.
4. West India – Resource-Rich Fertiliser Hub
This is one of the most strategically important zones for the fertiliser industry due to:
- Natural gas pipelines from offshore wells (e.g. Hazira)
- Port connectivity for import/export
- Availability of industrial infrastructure
📍 Key Regions:
| State | Major Fertiliser Units |
| Gujarat | Vadodara, Bharuch (Narmada Valley Fertilisers & Chemicals – India’s largest urea producer), Kandla |
| Rajasthan | Sikar, Kota (supports North & West India) |
🔍 Highlight: Gujarat is also a centre for joint ventures, public-private models, and advanced urea/ammonia plants.
5. Central India – Supportive Yet Moderate Presence
This region acts as a supportive belt, not dominant but strategically important.
📍 Key Areas:
| State | Fertiliser Plants |
| Madhya Pradesh | Bhopal, Ujjain (urea and mixed fertilisers) |
| Maharashtra | Mumbai, Thal, Ratnagiri |
🔍 Note: Maharashtra benefits from coastal ports, while MP offers central location advantage for distribution across India.
Conclusion: A National Necessity, Guided by Geography and Infrastructure
So, the fertiliser industry is guided by a mix of raw material availability, transport infrastructure (like pipelines), mineral deposits, and proximity to ports or consumers. It’s a clear example of how geography, technology, and economic needs come together to shape industrial location.
Just as no farmer would grow crops without checking soil nutrients, no fertiliser plant is established without checking its locational advantages.
