Mangalore, Oct 11, 2014 : The closure of three plants producing Urea with Naphtha as feedstock— Mangalore Chemicals and Fertilisers (MCF), The Madras Fertilisers Limited (MFL), Chennai, and Southern Petrochemicals Industries Corporation Limited (SPIC), Tuticorin, will directly or indirectly affect the livelihood of over 15,000 employees working in these units, said the Joint Action Committee of Naphtha based Fertilisers Employees Union which includes the Mangala Workers’ Union of MCF.
In a statement, Committee General Secretary K N Suryanarayana appealed the Union government to allow to continue the operation of urea production using Naphtha as feedstock in the three units till natural gas connectivity is made available. The units were shut down following the expiry of government’s deadline to switch over to natural gas as feedstock for manufacturing Urea, on September 30. In its appeal, the joint action committee made it clear that it was the failure on the part of Gas Authority of India Limited (GAIL) to make available natural gas connectivity within the stipulated time which caused the non-switch over. The three plants have made substantial investment to change feedstock to gas as directed by the government. MCF itself has made an investment of over Rs 300 crore for the conversion and is ready to receive the gas but, pipeline connectivity was not provided by GAIL. The statement criticised the government for not ensuring that the plants would have access to gas within the stipulated time.
Besides, the action committee contended that the closure and re-opening of the unit will create an additional expenditure of minimum Rs 1.5 crore for each time for each unit. The present closure will result in loss of production of around 1.5 million tonnes of Urea per annum. The farming community in the Southern peninsular India will run into trouble by the shut down of the plants. The statement also mentioned that the gas prices will constitute about 70 per cent of the production cost of Urea.