Tata Chemicals to suspend DAP production at Haldia plant

Tata Chemicals, Tata Group's chemical section has announced that the company has decided to supply Di-ammonium Phosphate (DAP) to its clients through its inventory and imports as it is planning to suspend its Haldia plant. The Haldia, West Bengal plant had been producing DAP along with other complex fertilisers. However, the production of Single Super Phosphate (SSP) remains intact so far.

According to the 2014-15 results the Haldia plant has achieved a combined production of DAP, NPKs (Nitrogen, Phosphorous, and Potassium) and SSP of 868157 tonnes as against 727114 tonnes in the previous year. The DAP alone amounts to an annual capacity of producing 1.2 million tonnes.

The sales of the produce accounted to 789292 tonnes as against 718182 tonnes in the previous year. Out of the total DAP sales 330488 tonnes were imported. The previous year’s imports were just 189194 tonnes. Thereby the disproportionate results were in the wake of increased working capital charges and input costs. 

DAP prices too see a sharp decline to 340-350 USD per tonne from USD 440 per tonne last year. So higher inputs and lower selling price has adversely affected the working of Haldia plant.

The stock of Tata Chemicals has tumbled 1.12 per cent to Rs 424.65 in the early trade on Monday which is a consolidation breakdown. The company may not see a long term effect though, as SSP can act as a substitute to DAP. However, SSP is also imported in huge volumes and hence the company needs to increase capacity utilisation.