News Update

WCO, WTO release joint report on disruptive technologiesGST - Merely because certified copy was subsequently filed physically, said circumstance cannot be made basis to come to conclusion that appeal was filed beyond prescribed period: HCST - SCN is clearly contrary to the undisputed facts - Petitioner having already paid the amount mentioned in SLVDRS-3, benefit of the scheme to be extended: HCEC hints at new rules to make parties explain how they would bankroll tall promises made during pollsCus - Delay in NOC by FSSAI - Demurrage charges - Transportation of imported articles from the custodian warehouse to a public warehouse is not prohibited under the provisions of 1962 Act: HCNobel Prize in Physics goes to 3 scientists - Alain Aspect, John Clauser & Anton ZeilingerCus - Refund of TED - Issue no longer res integra - Respondent is directed to grant credit of the amount of duty paid in the electronic credit register: HCGST - Not dropping google pin does not appear to be deliberate disobedience - Petitioner has given sufficient explanation - Order of lower court set aside: HCPMLA Court extends custody of Sena leader Sanjay RautStrict Interpretation in Taxing Statutes - To what extent?I-T - Public functionary can be held liable for malicious acts in name of excercise of power : HCGovt issues Advisory against ads of betting on TV & Digital MediaI-T - If figures of sales and purchase were not doubted by AO, he cannot make additions on presumption of bogus purchases: HCScindia inaugurates direct flights between Bilaspur to IndoreI-T - In absence of enabling provisions, CPC Bangalore lacks jurisdiction to make any disallowance in order u/s 143(1): ITATWith tech developments, affordability of broadcasting services can be further improved: DoT SecretaryI-T - Additions framed on account of alleged cash receipts are invalid where no witnesses to such payments are available to testify & are based solely on statements: ITATRetail prices of edible oils expected to come down further: GovtI-T - Once income of trust is applied for its objects and stands maintained in seperate books of account, trust is eligible to claim exemption u/s 11: ITATImport duty on Platinum, Palladium & rhodium revised to 1.5% for specific useI-T - Rejection of valuation of shares as per DCF method is without any evidence on record and can not be upheld : ITATMoF notifies 7.1% interest rate for GPF w.e.f Oct 1, 2022VAT - Entry tax can be imposed on basis of stock transfer price instead of ELP: HCAnti-dumping duty on ‘Fishing Net’: DGTR initiates sunrise investigationMumbai Airport Customs nabs pax with 980 gm cocaine + Delhi Customs recovers drugs worth Rs 9 Cr from Liberian paxJapan hoots siren as North Korea fires intermediate range ballistic missile over part of Hokkaido islandArchaeologists find 44 gold coins of Byzantine Empire during 7th Century
CSIR's Marine Potash Fertilizer Technology Stuck in Grey Zone

MARCH 22, 2022

By Naresh Minocha, Consulting Editor

AN indigenous technology developed for extracting sulphate of potassium (SOP), a premium fertilizer, from sea bittern is under a cloud. In spite of its licensing and successful demonstration to two leading companies beginning 2006, the technology has not matured into an optimally-operated, commercial plant.

The issue is important from the standpoint of translating Aatma Nirbhar Bharat call into success in reducing import dependency in core areas - food security and energy security. India's vulnerability on this count in area of fertilizers and oil and gas has come under focus due to Russia-Ukraine War (RUW).

The cloud over indigenous technology can be seen in the recent disclosures made by its first technology licensee or beneficiary, Archean Chemical Industries Limited (ACIL). The revelations are scattered in its Draft Red Herring Prospectus (DRHP) for stock market listing and in its latest annual report.

Though ACIL's commercial-scale, SOP plant was commissioned in 2014, it has operated at a very low, capacity level year after year. The capacity utilization of SOP plant declined to 1.54% in 2020-21 from 14.65% in previous year. Capacity utilization was 10.06% in 2018-19 and 0.06% in first half of 2021-22!

Attaining optimal production efficiency & respectable capacity usage is daunting.

The company thus continues to seek overseas help to improve the working of its plant. The plant has an approved capacity of 1 lakh tonne per annum (LTPA) of SOP. Its rated, certified capacity is 1.3 LTPA.

The project was commissioned as export-oriented unit (EOU) with investment of Rs 630 crore in Kachchh district of Gujarat. Apart from SOP plant, the project comprises facilities for the production of few marine chemicals such as bromine and captive power.

ACIL claims SOP plant is based on an imported technology. The narrative in DRHP dated 22th February 2022 is at variance with the one available in documents of Union Government and its R&D entities.

No wonder ACIL is currently locked in litigation with indigenous technology licensor, Bhavnagar-based Central Salt & Marine Chemicals Research Institute (CSMCRI), a constituent of Council for Scientific and Industrial Research (CSIR). In 2006-07, CSMCRI had signed eight technology licensing agreements for SOP, bromine, etc. More of this later in the story.

First the basics. Potassium is one of the three primary plant nutrients. India meets its almost entire requirement through imports largely as muriate of potash (MOP) or potassium chloride (KCl). It is also used abroad for production of SOP, which has lowest salinity index.

About 18 years back, CSMCRI developed an integrated process for production of SOP, magnesia (a refractory material) and certain other marine chemicals from sea bittern (SB).

SB is a concentrated liquid left after extraction of common salt. SB undergoes multi-steps processing to yield SOP and co-products/ by-products. CSMCRI holds separate international patents for two variants for process for production of SOP with two different streams of allied chemicals.

Apart from ACIL, Tata Chemicals Limited (TCL) tested CSMCRI technology. In 2015, it commissioned a pilot plant in Gujarat with Rs.14.4-crore grant from Department of Science and Technology (DST). A few other companies such as Indian Potash Limited evinced interest in this technology.

No company other than ACIL has, as yet taken the risk of setting up a SB-based commercial-scale SOP plant. Even ACIL has moderated its zeal for SOP. DHRP is thus silent on ACIL's 2015 proposal to expand SOP capacity to 4LTPA for which it obtained environmental clearance.

Ideally, Modi Government should have helped the company overcome technical challenges in attaining optimal capacity utilisation and expansion. This is because ACIL plant's success would have encouraged other companies to set up similar plants.

CSIR brochure tilted 'Chemicals: The Formula for Success' mentions SOP technology transfer to TCL and ACIL. So do several other CSIR & CSMCRI documents.

Referring to upcoming Archean's SOP plant, DSIR working group for 12th plan 2012-2017 Vol I had stated: "The commercialization of the indigenous technology would make our country self- sufficient in sulphate of potash".

DHRP gives a different perspective. It says: "our Company entered into a 'know-how' agreement with the Parties (CSMCRI & CSIR) , which pertained to licensing and transfer of technical know-how towards the process of three products, sulphate of potash, magnesium oxide and bromine and brominating agent, in consideration of payments by our Company of Rs. 8 million towards license fee; Rs. 1 million towards demonstration fee; and either as a fixed percentage of net sales or one time lump-sum amount towards royalty. Subsequently, the Parties invoked the arbitration clause as per the Agreement due to dispute regarding non-payment towards outstanding license fee and royalty".

As the arbitration award went against ACIL in 2014, it challenged this in City Civil Court at Bangalore. "The matter is currently pending," says DHRP. Barring this reference, DHRP has not disclosed whether CSMCRI's process know-how was utilized or modified by a German technology provider named KUTec.

In a presentation prepared prior to the commissioning of the project, ACIL also mentioned another German company, DDPS-QVF, as the technology provider for liquid bromine. It also has a list of companies, largely German ones, that supplied equipment and services for the project.

The presentation admits the "Project Concept" for manufacture of "SOP, MgO, Green Bromine and Derivatives" has been provided by CSMCRI. This acknowledging is missing in DRHP.

The Presentation comprises 70 slides. One slide shows image of CSMCRI's SOP pilot plant and its researchers demonstrating its working to ACIL staff. Another one shows photograph of CSMCRI staff with representatives of KUTec and ACIL in 2009 with caption "Team KUTec at CSMCRI".

Does this mean KuTec discussed with CSMCRI scientists indigenous SOP process for its scale-up into commercial plant?

Another interesting recall from the past is a letter from ACIL to CSMCRI, expressing faith and dependence on home-grown know-how.

In a letter dated 26th February 2006, Archean Executive Director C G Sethuram stated: "Pursuant to the agreement we have with CSMCRI for various marine chemicals, I had the opportunity to witness the first level of demonstration of manufacturing Sulphate of Potash (SOP) from mixed sale obtained from sea bittern. This demo was performed at Bhavnagar in my presence during 16-2-2008 to 20-2-2008. I am glad to note that the first decomposition step involving preparation of Schoenite from Kainite mixed salt and the second step of preparing SOP using Schoenite and purchased KCL were successfully demonstrated".

The letter continues: "We look forward for the second phase of the demonstration for production of KCL and MgO from desulphated shoenite and liquor stream for which the solar evaporation process is in progress. Since these are the key steps in preparation of SOP. I am very confident that the entire process and the project can be scaled up".

Referring to allotment of 60,000 acres in Greater Rann of Kachchh, Mr Sethuram added: "We proposed to establish a 100000 tons per annum capacity plant in this region to produce SOP using the process technology from CSMCRI. When established, this will be the first of its kind in the world to produce SOP (which has two nutrients and low salinity index) through a totally green integrated process".

According to DRHP, SOP's recovery is based on potassium chloride (KCl) and sodium chloride (NaCl) content. It says: "Lower levels of NaCl yields better recovery of sulphate of potash from KTMS (kainite type mixed salt ) and an increased level of NaCL yields lower outputs. Further, we recently upgraded our facility and flotation circuit to improve conversion ratio which determines the overall output of our manufacturing process".

KTMS, obtained from SB, is precipitated, harvested and stored. Later, it is transformed into another intermediate named Schoenite. This, in turn, is processed to obtain SOP.

As put by DRHP, "As we continue to improve our KTMS ratio, we expect the costs associated with our utilities and raw materials to decrease and improve our sulphate of potash production substantially. The KTMS that we have harvested has had a higher level of NaCl, and accordingly have taken professional advice on improving the quality of our KTMS. The method of precipitation of KTMS was changed from parallel to series mode in the crystallizers which is expected to yield a lower NaCL content".

According to ACIL annual report for 2020-21 released in January 2022, "During the year under review, the monthly SOP production showed more consistency than earlier year". It adds ACIL is "engaged in continuous discussion with technology partners and trying to optimise the production to get the desired conversion ratios".

It says: "During financial year 20-21, company tied up with external firm for use of high NaCl feedstock in plant by introduction of flotation process. Samples were sent and trials are in progress at laboratory".

The inference one can draw by connecting dots is that ACIL availed CSMCRI's SOP technology in one form or the other. It was scaled up by a German company. Notwithstanding this, SOP plant is yet to blossom into a showcase of commercial-scale SOP that works at an optimal capacity.

This shortcoming should worry votaries of Aatma Nirbhar Bharat. More worrying is Union Government's inability to visualise National Potash Mission for ANB through four different technological options. [Please also read - RUW offers 5 new lessons on ANB Vision - Ideas can be crafted even under the shade of a banyan tree.]

If Brazil and the USA can launch initiatives to reduce dependency on imported fertilizers after start of RUW, there is no reason why India can't do it with requisite urgency.