State-owned fertiliser major Hindustan Urvarak & Rasayan (HURL) is undertaking a significant expansion plan, investing approximately Rs 30 billion across its three projects in Gorakhpur (UP), Barauni (Bihar), and Sindri (Jharkhand), with the goal of increasing its capacity to 50 lakh tonnes over the next 2-3 years.

Currently, HURL has a total capacity of 38 lakh tonnes across these units and achieved 94 per cent capacity utilisation last year. The combined cost of setting up these units was around Rs 279 billion.

The company has approved a major expansion plan. The board has authorized Rs 2 billion for the establishment of a Nano urea plant with a capacity of 1.5 lakh bottles per day, as an extension of the Gorakhpur unit. This plant will produce a new generation of urea.

Additionally, the company is planning a second expansion, which involves setting up an Ammonium Sulphate plant at the Barauni unit. This plant will utilize the surplus ammonia available and will be developed in two stages, each with a capacity of 1.5 lakh tonnes. The first stage will require an investment of Rs 5 billion, while the second stage will need approximately Rs 3 billion, making the total project cost around Rs 8 billion.

Mohanty also noted that the combined expansion cost for the Gorakhpur and Barauni units would amount to Rs 10 billion. In response to the international DAP crisis, HURL has been directed to produce NPK complex fertilizers. An NPK plant, which will have a capacity of around 4 lakh tonnes per annum (approximately 1,000 tonne per day), is planned as an expansion for the Sindri unit, with an estimated cost of Rs 20 billion.

Construction for the Nano urea plant has already commenced, and technology transfer is underway, with the LSTK tender expected to be issued by next month. For the Ammonium Sulphate plant at Barauni, the Detailed Feasibility Report (DFR) is prepared and in the final stages of approval. Once the board approves it, the company will proceed with the LSTK tender process. The NPK plant is still in the preliminary stages of planning.

Following these expansions, HURL’s total capacity is expected to reach 50 lakh tonnes within the next 2-3 years, requiring an investment of around Rs 30 billion. To fund this, the company will seek market financing. Mohanty highlighted that this is the second consecutive year of good profits for HURL, and approximately Rs 10 billion will be needed for the Gorakhpur and Barauni units. Around 70 per cent of this funding is anticipated to come from a consortium of lenders, who are prepared to finance it.