One of major challenge for the present government of Bangladesh is to arrange all agricultural inputs to the farmers at affordable cost to help grow required food grains to achieve food autarky which Bangladesh also achieved during the Awami League Government of 1996-2001. Of these most important one is the supply of fertilizer. The new Government has already reduced the price of non urea fertilizer significantly. It has plan to import urea fertilizers to cover the deficit of the combined demands of the fertilizer plants in Bangladesh. But the matter to bother is that, the government has to cater for a subsidy amounting to 6 thousand crore taka to comfort fertilizer supply alone. It is true that food supply is one of main responsibility of the Government. But the money to be dedicated for fertilizer subsidy is considered enough to set up 4 new fertilizer plants in Bangladesh. With natural gas production and supply in crisis government can not proceed with plans for setting up new fertilizer plans at this stage until the gas issues are effectively taken care of.
Bangladesh Chemical Industries Corporation has now has 6 operating Urea fertilizer plants. These are :
- Natural Gas Fertilizer Factory (NGFF) at Fenchufganj
- Urea Fertilizer Fertilizer Factory at Ghorashal ( UFFG)
- Polash Urea Fertilizer Factory at Ghorashal (PUFF)
- Zia Fertilizer Company Ltd ( ZFCL) at Ashuganj
- Chittagong Urea Fertilizer Ltd ( ZFCL) at Rangadia Chittagong
- Jamuna Fertilizer Company Ltd (JFCL) at Jamalpoor.
Apart from above Karnaphuli Fertilizer Company Ltd (KAFCO) another multinational company having BCIC stake is also in operation at Chittagong beside CUFL at Chittagong. BCIC plants can produce about 15 lakh tons urea every year against a national demand of about 32 lakh tons. Bangladesh buys about 2.5 -3 lakh tons from KAFCO at international price. To import about 40% of annual demand at fluctuating international price government has to account for 3-4 thousand crore taka. Moreover government has provide subsidy to keep the production of BCIC plants ongoing as urea plants get natural gas at lower than domestic gas price.
Fertliizer plants are complex nature chemical plants which have a given economic life. Plants set up in early years of Bangladesh and before independence have already outlived their economic life time. The processes have also become obsolete. The production is well below economic level. But since 1987 Bangladesh could not set up any new fertilizer plant. Now with natural gas supply situation becoming uncertain it has become really challenging for the plan of setting up of new plants. Natural gas also major fuel for power generation, Industries and CNG. But for sustainability of agricultural growth Bangladesh must plan and set up at least two new modern urea Fertilizer Plant as soon as possible. Any large urea plant usually needs 5-6 years at least to come into production after commencement of construction. Even if we start now there is no way new plants can come on stream before 2015. By that time we have to source new gas and mine our own coal to shift major burden of power generation to coal. We will definitely need new fertilizer plants as few of the existing plants may cease to continue production by then. Let us have an honest analysis of the situation.
NGFF, PUFF and UFFG are running at high risks. Even operation of ZFCL has become risky now. CUFL and JFCL are modern plants but for gas supply constraints these can not run to capacity all the time. There were talks about Shahjalal fertilizer plant since Awami League Government of the last tenure. But till now nothing has happened to have any confidence that this is to happen soon. Considering ready access to gas Nabiganj can be ideal location for a new fertilizer plant. The proposed 450 MW Power plant at Nabiganj and urea plant at Nabiganj will create opportunity for economic use of gas in the region. National gas grid will be relived to a great extent to evacuate additional gas from the region. The other major Urea plant can be set up at Siarajgonj or Ishwardi. This will however require additional gas production from existing gas fields-Titas, Habiganj, Bakhrabad after completion of 3D seismic survey and completion of several gas transmission infrastructure developments. A medium capacity fertilizer plant can be thought off at Bhola even depending on full appraisal of Shabajpoor gas field and new finds at block 10.
One can not imagine why Bangladesh is sitting on significant high quality coal reserve. Why Bangladesh should not adopt technically proven modern open pit coal mining technology observing all environmental and social issues? If we can set up few base load power plants on coal the pressure on gas will be relived and then most of gas from new gas find can be dedicated to fertilizer and industries. Bangladesh must engage with India and finalize power import from Tripura where some huge capacity gas base power plants are being set up. If Bangladesh can import about 1000 MW power from neighboring Indian state that will relieve the overstressed gas resource for a while till we discover new resources and set up coal plants utilizing our own coal.
But in any case Bangladesh must plan to set up at least two large capacity modern Urea fertilizer plants and one DAP and a TSP plant in the next 5-7 years to create sustainability of our agriculture production. A nation like Bangladesh can not continue providing huge subsidy to fertilizer forever.
Kh A Saleque is one of our guest writers, He is an Engineer by profession and lives in Australia.