Since Bangladesh's fertiliser industry is intimately related with its natural gas production, how it has performed has been shaped greatly (but not exclusively) by (a) domestic gas demand-supply balances; and (b) global gas price levels. Natural gas contains nitrogen and phosphate. Since three-quarters of the atmosphere itself is nitrogen, which the soil cannot absorb in pure form, an ammonia or urea mixture becomes essential, depending on climatic factors. Our fertiliser industry concentrates on urea production. Phosphate comes in at least four combinations to relate to fertilising the soil, depending on which other mineral it must mix with: the single super phosphate (SSP); di-ammonium phosphate (DAP); the triple super phosphate (TSP), and the quadrupled combo of nitrogen, phosphorus, potassium, and sulfur (NPKS). In addition is the muriate of potash (MOP) fertiliser.
According to a calculation by Petrobangla, the country's official department in charge of exploration, fertiliser factories took 7.0 per cent of the 2.3 billion cubic feet daily (bcfd) domestic gas production in 2014, although in 2011 Shafi Ahmed from the Bangladesh University of Engineering and Technology (BUET) in Dhaka put that proportion at 17 per cent. Bangladesh ranked 46th in natural gas reserves in 2010, according to Aminul Islam Akanda, accounting for only .10 per cent of the global total. Since the country's gas-fertiliser dependence rate is both high and critical, discussions begin with the onset of gas exploration before shifting to its fertiliser applications.
First found near Chhatak in 1959, leading to the establishment of a cement factory immediately, gas exploration came up empty in more locations than it was successful. Even success became a huge variable. Discoveries were limited in Rashidpur (1960), Kailashtila (1962) and Semutang (1969), before hitting big-times with Titas (1962), Habiganj (1963) and Bakhrabad (1969) in the Pakistan phase, but still on too small a scale to become commercially feasible. This was to change after independence. Though the Begumganj (1977), Kamta (1981), Feni (1981) and Beanibazar (1981) fields had relatively minor deposits, Fenchuganj (1989), Narsingdi (1990), Maulvi Bazar (1997), Meghna (1990), Shahbazpur (1995) and Saldanadi (1996) boosted our stock. Jalalabad (1989) and Bibiyana (1993) became the big discoveries, with Bibiyana becoming the largest reserve we have today, with 2.1 trillion cubic feet, or tcf. All locations dot the Indo-Burmese Range, from Sylhet to Chittagong Hill Tracts, with off-shore extensions in Kutubdia (1977) and Sangu (1996) bringing the Bay under the microscope.
Titas was the biggest finding historically (with 4.1 tcf of reserves), though almost three-quarters have been depleted by now. Both Habiganj (3.6 tcf) and Kailashtila (3.6 tcf) fields rank behind Bibiyana. The country's net recoverable amount was about 15.5 tcf, but since one-quarter of that was already consumed by the turn of the 21st century, we have been on a downward spiral ever since, desperately needing more significant discoveries, not only for energy but also farm fertilising.
Based upon transmission and distribution networks (themselves huge downstream industries), three franchise zones were created: the Titas franchise area fed/feeds the Zia Fertiliser Factory (1980), Jamuna Fertiliser Company Limited (JFCL 1992) and Ghorasal Urea Fertiliser Factory (GUFF); the Jalalabad franchise area fed/feeds Shahjalal Fertiliser Factory (2014); and the Bakhrabad franchise area fed/feeds the Karnafuli Fertiliser Company (KAFCO, 1994) in the Chittagong zone. Petrobangla estimates the current consumption of slightly over 76 million cubic feet per day will cross the 100-million mark by 2020.
Bangladesh's current net fertiliser production of just under 2.0 million metric tons falls short of our net current need of almost 3.0 million metric tons. This should also alert us to our gas production, which is peaking even as we speak of it, thus exposing one of the key concerns of the future viability of our fertiliser industry. This particular inter-industry relationship carries broader ramifications: without a more comprehensive fallback plan, the country's energy infrastructure will weaken with depletion, thus impacting other industries and residential recipients.
Fertiliser production dates back to 1961, when the Natural Gas Fertiliser Factory (NGFF) was established to supply urea. However, although the Urea Fertiliser Factory Limited (UFFL) was built at the time of our independence struggle (1970-2), the real thrust followed independence and anchored upon the Bangladesh Chemical Industries Corporation (BCIC). In chronological order, the plants were the Zia Fertiliser Company Limited (ZFCL, from 1980), Polash Urea Fertiliser Factory (PUFF, 1985), Chittagong Urea Fertiliser Limited (CUFL, 1987), Jamuna Fertiliser Company Limited (JFCL, 1992), Karnafuli Fertiliser Company (KAFCO, 1994), and Shahjalal Fertiliser in Fenchuganj (2014). With the KAFCO plant involving a multinational consortium with Denmark (26 per cent) and Japan (31 per cent), Bangladesh retained the remaining 43 per cent. A KAFCO-2 unit is also in the works, to be built at a cost of $1.15 billion with Bangladesh keeping its 43 per cent share.
According to the Soil Resource Development Institute, almost 8.5 million hectares of land is deficient in phosphorus and just over 7.0 million in sulfur. Loss stems from land-usage intensity. Professor A.K.M. Abdul Quader's detailed study of the subject (to support his strong argument to resurrect the fertiliser industry) indicates that intensity hovered around 177 per cent for much of this century (though he posits the Department of Agriculture Extension puts it at 195 per cent): of the country's 14.85 million hectares of total land, about 8.0 million have been cropped at 177 per cent intensity rate. Loss also stems from substituting traditional organic fertilisers (such as cow-dung) to inorganic counterparts (such as fertilisers), stubble-removal, and salinity. With fertiliser consumption climbing by over 10 per cent annually, problems galore stare the industry.
With urea, TSP, MOP and DAP domination among utilised fertilisers, we find each presenting a different utilisation trajectory. According to statistics from the Fertiliser Association of Bangladesh, over the past decade or so, urea production has declined from 1.4 million metric tons to under 1.0 million today, whereas the TSP output has doubled from 30,000 metric tons to over 60,000 in that time span. On the other hand, DAP production has halved from 100,000 metric tons in 2007-8 to less than 50,000 today. No MOP information was available, but except for urea, demand has been rising - from 2.8 million metric tons in 2007-8 to about 2.4 million today for urea; from 474,000 metric tons to 675,000 for TSP inputs for those same years; from 250,000 metric tons to 650,000 for DAP inputs; and 400,000 metric tons to 800,000 for MAP inputs.
Consequently, imports have spiralled - from 1.16 million tons in 2007-8 to over 1.45 million for urea; from 400,000 to 480,000 tons for TSP inputs for the same years; from 17,000 in 2007-8 to 500,000 today for DAP counterparts; and from 360,000 tons to over 750,000 for MOP for those same years.
"Bangladesh immediately requires to add additional production capacities," Professor Quader of Bangladesh University of Engineering and Technology (BUET), Dhaka, insisted in his "Chemical Engineering Research Bulletin" article in 2009. Since Bangladesh needed 1.1 million tons of urea, 960,000 tons of SSP, 226,000 tons of phosphoric acid, 1 million tons of sulfuric acid and 700,000 tons of potash muriate annually at that time, investments to the tune of $1.86 billion today can bring us on par (importing them would cost us $1.7 billion annually). Reforms like these could lead Bangladesh, as his BUET colleague, Professor Shafi Ahmed predicted, to becoming the world's fifth largest urea importer (behind India, the United States, Brazil, and Thailand), in his "Journal of Chemical Engineering" article in 2011. In between those two articles, we have run into quite a conundrum of the forces: exploding gas consumption by industries and for residential purposes have diverted supplies from fertiliser factories (some of them even having to close down, as for example, the Polash and Gorashal factories near Narsingdi in 2009, but much more recently the Japanese-built Chittagong Urea Fertiliser Limited); diminishing capacity utilisation and returns of BCIC plants, especially as contrasted to the better performances of the KAFCO multinational consortium; and expanding food consumption demanding higher crop intensity and fertiliser utilisation.
What the article does is: (a) confirms both the growing inter-industry relationship, even dependence, and the increasing need to overhaul linkage with other domestic industries, such as ship-building, (b) exposes our growing import-dependence, and our approach to the external world should be handled, that is, we should deepen imports or explore export expansion; (c) alerts us to the need to innovate and be more efficient so that obsolete equipment can be quickly upgraded and operational wastage is minimised; and (d) accentuates urgently the need for an industrial policy connecting factory needs, public demands, and energy capacities.
If the break-even fertiliser industry carries such promises, what about a more bubbling industry? The next piece turns to the Information and communications technology (ICT) sector.
Dr Imtiaz A Hussain is Professor, International Relations, formerly Universidad Iberoamericana, Mexico City.
