Fertilizer is an essential part of the technological revolution in agriculture, which has ensured food security to the world population and retained soil fertility and nutrient mismanagement. In order to support the worldwide increasing food demand, fertilizer demand is also increasing since its invention. The first invention of fertilizer (superphosphate production) was patented in 1842 (
Ramírez and Worrell, 2006). In the last 40 years, the worldwide use of fertilizer is increased by over 200 per cent and the consumption became 199.9 metric tons (MT) in 2018 (
Statista, 2020). Continuous acceleration of agricultural productivity is now unimaginable without fertilizer usage. Fertilizer is a natural or chemical substance that increases the fertility or nutrient content of the soil. Nitrogen-based fertilizers are the most consumed ones because it is considered most essential nutrients for the growth of plants and these plants absorb it more than any other elements
(Tilman et al., 2011). According to the International Fertilizer Industry Association (IFA) 2016-17 estimates, 57 per cent of the total consumed fertilizer was nitrogen-based, 24 per cent was phosphorus-based and 19 per cent was potassium-based (
Yara, 2018). Urea, anhydrous ammonia and ammonium nitrate are some common nitrogenous fertilizers. Urea has 46 percent nitrogen content which is the highest in comparison to other popular nitrogenous fertilizers. Urea contains 33 per cent extra nitrogen than the same amount of ammonium nitrate.
For a developing country like Bangladesh, agriculture is a vital part of the national economy, contributing 20 per cent of the national gross domestic product (GDP)
(Ruane et al., 2013). Agriculture also employs 63 per cent of the total population
(Sefat-e-Zerin, 2019). Fertilizers are indispensable for the crop production systems in modern agriculture. In Bangladesh, about 50 per cent of the total agricultural production is solely dependent on fertilizer. From the total fertilizer production, 75 per cent is used for rice which is the staple food of Bangladeshis (
Zaman, 1987). Different types of fertilizers are produced to increase soil fertility. Commonly used fertilizers in Bangladesh are urea, triple superphosphate (TSP) and muriate of potash (MoP). Among these fertilizers, urea solely contributes to 70-75% of the total fertilizer usage
(Jahiruddin et al., 2010, Hopper, 1993). Therefore, urea fertilizer industries are the most important among different types of fertilizer industries in Bangladesh.
Previously different studies have been performed to analyze the current scenario of fertilizer industries and markets of India, China and overall South Asia
(Zhang et al., 2008; Mujeri et al., 2013; Jaga et al., 2012; Li et al., 2013). Moreover, Bangladesh’s agricultural production outlook and fertilizer market analysis are also represented in few studies, but they are not up to date (
Renfro, 1992;
Ahmed, 1995;
Karim et al., 1996; Hossain and Teixeira, 2013;
Ruane et al., 2013). Although hundreds of annual reports, statistical analyses are performed on fertilizer industries in Bangladesh every year natively, no recent article has been found addressing the detailed picture of fertilizer industries and the market situation in this predominantly agricultural country. The main objective of this research was to study the current scenario of commercial urea fertilizer industries in Bangladesh: urea demand, production, consumption scenario and to find their shortfalls along with providing recommendations to overcome them. Addressing all of these are not only important nationally but also economically important for the countries which build and commission fertilizer industries worldwide; like United States (Kellog Brown Root), Netherlands (Snamprogetti, Stamicarbon), Denmark (Haldor Topsøe), Saudi Arabia (Uhde), Japan (Toyo) and China
etc.
Current scenario of fertilizer sector in Bangladesh
Basic information and the condition of fertilizer industries
Currently operating urea fertilizer industries are Chittagong Urea Fertilizer Ltd. (CUFL), Jamuna Fertilizer Company Ltd. (JFCL), Ashuganj Fertilizerand Chemical Company Ltd. (AFCCL), Urea Fertilizer Factory Ltd. (UFFL), Polash Urea Fertilizer Ltd. (PUFL), Shahjalal Fertilizer Company Ltd. (SFCL) and Karnaphuli Fertilizer Company Ltd. [multinational joint venture company] (KAFCO). The basic information about them, including location, process licensors, foundation year, power type, product type, comparative production efficiency
etc. are placed in Table 1 (
Quader, 2003,
BCIC Annual Report, 2018).
It is to mention that Natural Gas Fertilizer Factory Limited (NGFFL) in Bangladesh was the first fertilizer factory in the whole of Southeast Asia, but it was shut down for being obsolete and low production recently. At present, the largest fertilizer industry in Bangladesh is the Shahajalal Fertilizer Company Limited (SFCL) in Fenchuganj, Sylhet, based on design capacity. However, another fertilizer company Ghorashal Palash Urea Fertilizer Project (GPUFP), is going to be established in Narshingdhi. Some citable incidents in the industrial fertilizer sector of Bangladesh are as follows.
SFCL was installed successfully in 2016 at the adjacent site of exterminated /stamp out NGFFL and it is the largest fertilizer industry in Bangladesh right now. NGFFL used to account for 3 per cent of the total urea production, where SFCL can produce 17 per cent. Production of KAFCO and CUFL remained suspended in 2015 due to a shortage of gas and repair of the reactor and the plant’s cooling tower. KAFCO and CUFL resumed their production after four and seven months respectively. Besides, production of AFCCL was halted in 2014, 2017 and 2019 due to mechanical glitches, gas crisis and technical problems, respectively but the period was not more than two months. During 2018 both the CUFL and JFCL were forced to shut down their production due to diversion of the gas supply to power plants that feed the national grid. However, after a few months, the government reopened the fertilizer factories as the gas supply situation improved substantially following the arrival of imported Liquefied Natural Gas (LNG). At present, all the fertilizer industries are operating in full swing for using LNG being available instead of NG.
Scenario and consumption of fertilizer on an annual basis
The scenario (demand, production and import) of fertilizers in million metric tons (MMT) is illustrated in Fig 1.1 from the recent statistics of Bangladesh Rice Research Institute (BRRI) and Bangladesh Bureau of Statistics (BBS). Every year, nearly doubled demand of urea fertilizer than production can be observed from Fig 1.1 whereas the production is consistently below 1.5 MMT/yr (against the total capacity of 3.476 MMT/yr, Table 1). To meet up the fertilizer demand, a large amount of fertilizer is imported every year in Bangladesh. It was found that the amount of imported urea per year was higher than the demand based on the estimated total cultivable land (Fig 1.1). The government has to provide more than the necessary amount of fertilizer every year because of the poorly utilization capability of limited urea fertilizer and reduction of farmland. Therefore, a large amount of urea fertilizer is imported more than estimated.
The annual consumption of fertilizer per unit of arable land is illustrated in Fig 1.2 for the fiscal year 2007 to 2018. It is observed that the fertilizer consumption per unit of arable land is continuously increasing from 0.184 MT/hectare to 0.293 MT/hectare within 2007-08 to 2017-18 year, growing at an average annual rate of 3.56 per cent. Long-term continuous mono-cropping is the cause of decline in soil fertility.
Natural gas consumption and urea production by fertilizer industries
Natural gas (NG) is mainly used as raw material and fuel in the fertilizer industry. The yearly NG consumption by the fertilizer sector from the fiscal year 2007-08 to 2017-18 is shown in Fig 1.3. It is represented that in 2007-08 the amount of NG consumption by fertilizer industries was 78.7 billion cubic feet (bcf) where it turned into 43 bcf in 2017-18 with 45 per cent decrease in a decade. Periodical (generally, 5/6 months) shutting down fertilizer units is due to the scarcity of natural gas and the declining fertilizer consumption trend (Fig 1.3).
The urea production scenario shows that KAFCO accounted for most domestic production before SFCL, having 228 stream days on average with a load of 100 per cent to 118 per cent (From KAFCO personnel). The other fertilizer industries are under extreme control by the government. These industries got around five months of stream days due to frequent NG supply cuts (Fig 1.4).
Fertilizer marketing and distribution
The government of Bangladesh directly monitors the fertilizer distribution in Bangladesh under the ministry of industries (MOI) and the ministry of agriculture (MOA). BCIC under MOI controls the distribution of produced and imported fertilizer. Furthermore, Bangladesh Agricultural Development Corporation (BADC) under MOA controls the import of all non-urea fertilizers. Private sector importers (PSs) are also handling the non-urea fertilizers through BCIC dealers.
The schematic diagram of fertilizer marketing and distribution system in Bangladesh is presented in Fig 1.5. From the figure, National Fertilizer Distribution Committee (NFDC) performs the allotment of fertilizer to the District Fertilizer and Seed Monitoring Committee (DFSMC). The district committee ensures the sub-allotment to Upazila Fertilizer and Seed Monitoring Committee (UFSMC). Department of Agricultural Extension (DAE) also monitors the district and Upazila (sub-district) level allotments. The Upazila fertilizer monitoring committee directly passes allowance to the BCIC and BADC dealers. They collect fertilizer and store in the buffer godowns directly from the industry gate, warehouse and BADC warehouse. Farmers can buy fertilizers from retailers or directly dealers at a price fixed by the government (Fig 1.5). There is no unique branding or marketing policy for the government providing fertilizers in Bangladesh because it is common to use govt. produced urea fertilizer for its higher quality and lower price.
Bottlenecks of fertilizer industries in Bangladesh
Natural gas crisis
As mentioned earlier, the main raw material for the production of urea fertilizer industries is natural gas. In the past few years, the fertilizer complexes faced a severe ongoing natural gas crisis in the country
(Ahaduzzaman et al., 2017). Natural gas production in Bangladesh from 2007-08 to 2017-18 shows a continuous yearly rise in demand for natural gas from fertilizer industry but not cope up to rising demand (Fig 2.1). It is simply due to diversion of natural gas to the generation of electricity and for domestic use. It is pertinent to mention here that power sector consumes more than 40 per cent of natural gas but fertilizer industry consumes only 4.97 per cent at a fixed rate and without any subsidies, as shown in Fig 2.2.
The driving factors for the crisis of natural gas are (i) annual rate of increase in consumer base (ii) switch of petrol /diesel-run automobiles and industries to gas as fuel (iii) regulation of rules on consumption of gas as fuel by the concerned authority. Natural gas crisis directly affects fertilizer production for being basic raw material.
Internal administrative and technical problems
Most of the fertilizer industries are so mired in the bureaucracy with stringent administrative rules for taking and implementing government decisions. Despite the hike in prices of essential, engineers involved in fertilizer industries are paid abysmal salaries. So newly appointed engineers of fertilizer industries ought to resign very often due to a low salary scale and join in other professions. Besides, deficiency of fresh chemical engineers in Bangladesh, where tendency to leave the country or changing their career path is a significant issue. These administrative issues must be solved because no company can be profitable without being operated under a good administration.
There is no active research and development (R&D) sector in the BCIC operated fertilizer industries. Therefore, the industry is running without modification unless the capacity is increased. Plants in Bangladesh generally emphasize operation rather than modification and up-gradation. In most cases, engineers in the plants are deployed to monitor processes in the control room, while the same work is usually assigned to trained technicians in other countries. It simply signifies demeaning the professionalism of engineers in fertilizer industries and demoralizing the professionals. The other major technical issues identified in fertilizer industry are (i) high-pressure drop in ammonia converter (ii) less temperature than the previous bed in ammonia converter (iii) catalyst top cover crack and twig welding and (iv) tube leakages in water cooling condenser. It is advisable to develop an R&D department to upgrade fertilizer industry in Bangladesh with remarkable new policies and recruiting qualified chemical engineers to monitor and make significant process improvements in this sector.
Product pricing and transportation
The price of the fertilizer produced by government fertilizer factories is kept much lower than the international price for the benefit of the farmers (Table 2). However, as mentioned earlier, the fertilizer companies have to buy natural gas at a fixed price and not get appropriate monetary benefit against the subsidized market prices of chemical fertilizer and off significant price drop of fertilizer. Therefore, they cannot improve the salary structure of factory employees and cannot accumulate funds for the R&D sector. These can be significant obstacles to the improvement of the fertilizer factories in Bangladesh.
Product transportation cost to the fertilizer buffer- godowns throughout the country is carried out by the company, which is a major additional cost for the fertilizer factories. Generally, industries are built where raw material (natural gas) is available. For example, Sylhet district is rich in natural gas sources, but the agricultural sector is not advanced. So, SFCL products are needed to be transported in agricultural-based regions, which is quite expensive. These issues should be analyzed before any new fertilizer plant installation. However, the government of Bangladesh maintains this as a welfare scheme for the farmers. Moreover, new fertilizer plants are also being established to maintain self-sufficiency in the food sector of Bangladesh.
Recommendations
In Bangladesh, rapid settling of the encountered problems is not possible. Long-term plans may be an active solution for the present circumstance.
Raw materials
In 2017, the natural gas reserve of Bangladesh was 27.12 trillion cubic feet
(Shetol et al., 2019). The country has an average daily natural gas production of around 2,700 million cubic feet. But it cannot meet up the massive demand of 3300 million cubic feet (
Petrobangla Annual Report, 2017). So, importing liquid natural gas can be a better solution for the current situation. Following the idea, Bangladesh has already signed 15 years deal with Qatar’s RasGas Co. to import liquefied natural gas (LNG) in 2018. The satisfactory news is that sulfur content in the imported gas is very low.
Coal can be a choice for syn-gas production, which is a source of hydrogen also. As Bangladesh is sitting on a significantly high-quality coal reserve, technically proven modern open-pit coal mining technology should be applied considering the guidelines of green environmental and social concerns. Bangladesh holds 4,750 MT of coal reserves equivalent to 34.5 trillion cubic feet (TCF) of natural gas, which is around 3 times greater than its present gas reserve (
Sajjad and Rasul, 2015). For combating the energy crisis, Bangladesh has limited economic alternatives to using its coal reserves. Using coal reserves for fertilizer industries will be beneficial for the country rather than importing LNG. Specifically, the coal gasification technique is to be employed for ammonia generation. After studying 15 different ammonia production routes, the coal gasification-based ammonia generation processes are found to be the most environment-friendly and efficient method. They have lower-most depletion of biotic sources, global warming, acidification and human toxicity impacts than other ammonia production routes like steam reforming and coal electrolysis
(Bicer et al., 2017).
Revamping process
Revamping process for the current units can be feasible for greater production and minimization of losses in operational units. From the fruitful revamping process application, numerous old plants of the world have expanded the plant capacity. Optimum production of urea largely depends on the use of efficient process units,
i.e., optimal reformer reactors, shift reactors, ammonia converters, urea reactors,
etc.
(Suhan et al., 2020). Bangladesh can adopt the idea to get benefitted from extra production at a lower cost from revamping investment.
R&D sector and training department
The research and development sector is the mandatory section of any particular industry. But unfortunately, in Bangladesh, there is hardly any industry where this section is found. Few engineers are appointed for research even though they cannot do their work correctly for the lack of facilities. As a result, most of the time, the country has to rely on foreign consultants whenever the industry faces any problems. The research and development sector should be established in every fertilizer industry to find faulty or inefficient factors that can cause a loss in the industry. Implementation of the sector can solve the industrial problem by adopting the suggested cycle in Fig 3. It shows a research and development cycle designed for a typical fertilizer plant. For any R&D of a plant, first, the process modification goals need to be decided. All the process parameters controlling these output goals should be determined and relative impact of these parameters should be considered. For the process modification part, first, a plant simulation needs to be created. The input parameters can be varied to study the changes in the desired output parameters. Critical analysis will determine which parameter(s) variations result into the optimum output. After running the simulation, these steps should be repeated for a pilot-scale plant. Lastly, changes in the main fertilizer plant will be performed. This variation should be kept very small so that the process remains steady. Monitoring and adjusting the instantaneous changes can lead to a sustainable process modification. Providing subsidies on the R&D section can be a good initiative by the government to involve more engineers in the industries and restrain brain drain. All the industries should have a training department for the training of engineering students. The trainees will be provided fundamental knowledge about the industry operation, maintenance, administration, accounting, commercial, health and environment safety. Thus they will be more enthusiastic about doing a job in the industry.
BCIC sector improvement
The government can take a farm decision by binding agreement between two or more private companies to operate the fertilizer distribution sector and BCIC. Through a tender process, the selected companies will provide a certain amount of fertilizer and their profit percentage to the government every year. Bangladesh Road Transport Corporation (BRTC) has successfully prevented its losses by assigning private companies with bond agreements. Furthermore, the engineer recruitment process should be strictly monitored by the BCIC authority to provide a clean, corruption-free environment. A newly appointed fresh engineer often starts to work more than a year after his/her confirmation of recruitment which lets him/her switch to other jobs. Besides, the BCIC website is not quite up to date. All the industries annual reports are not published on the website. Improvement in BCIC administration, environment and technical sides is significant for monitoring and managing the fertilizer industries.
Application of biofertilizer
Excessive chemical fertilizer use is a common problem in developing countries. This is causing nitrate leaching in soil, groundwater pollution, increasing nitrate concentration in water bodies, soil infertility and nutrition mismanagement (
Sekhon, 1995,
Kaur and Kaur, 2018). An alternative to chemical fertilizer is bofertilizer for a sustainable and environmentally friendly process. Biofertilizer can be generated from food waste, animal manure and other biological waste such as byproduct of biogas generation
(Suhan et al., 2019). Biofertilizer contain different micro-organisms which increase the availability of essential nutrients to the plant through biological processes like nitrogen fixation, potassium and phosphorus solubilization or mineralization, plant growth regulating substances production,
etc. (
Unnikrishnan and Vijayaraghavan, 2019). Biofertilizer can also be used in combination with chemical fertilizer. Few researchers have also proven that biofertilizer and chemical fertilizer’s combined effect could provide the best results
(Kumar et al., 2019; Mishra et al., 2020; Kumar and Brar, 2021). Hence, future fertilizer production and application planning should include integrated nutrient management using both inorganic and biofertilizer.
