Gas allocation keeps public-private KAFCO running as state-owned CUFL stays shut

Gas allocation has kept the public-private Karnaphuli Fertiliser Company Ltd (Kafco) in operation, while state-owned Chittagong Urea Fertiliser Ltd (CUFL) has remained shut for five and a half months, highlighting the contrasting impact of the ongoing gas shortage on the two fertiliser plants located in the same area of Anwara, Chattogram.

Both plants were shut on 4 March amid the gas crisis, but Kafco resumed production about two months later after receiving gas supply. CUFL, meanwhile, has yet to restart, with the state-owned plant incurring an average daily loss of nearly Tk2 crore.

People familiar with the matter said Kafco has been prioritised for gas allocation because of an agreement guaranteeing uninterrupted supply when the plant was established.

Engineer Md Rais Uddin Ahmed, general manager (Marketing-South Division) of Karnaphuli Gas Distribution Company Ltd, told The Business Standard that Petrobangla and the Bangladesh Chemical Industries Corporation (BCIC) decide which factories receive gas during shortages. Kafco continues to receive gas in line with Petrobangla's instructions.

Kafco requires around 50 million cubic feet (mmcf) of gas a day, compared with CUFL's requirement of 45 mmcf, he said.

CUFL normally produces 1,000-1,200 tonnes of urea and 800 tonnes of ammonia a day, while Kafco has a daily capacity of around 2,000 tonnes of urea and 1,500 tonnes of ammonia, according to officials.

The ammonia produced by both plants is also supplied to the nearby DAP Fertiliser Company Ltd (DAPFCL), which uses it to produce diammonium phosphate (DAP).

Mizanur Rahman, managing director of CUFL, told TBS that the plant has remained shut since 4 March due to the gas crisis.

"Our plant is ready to resume production. The Karnaphuli Gas authorities have said they will start supplying gas from 2 September. However, we have requested them to bring the date forward to 22-23 August," he said.

Kafco Chief Operating Officer Abdullah Faruk said the plant remained shut for about two months from 4 March and resumed production in May. After operating for 15 days, however, a technical problem forced another shutdown lasting around one and a half months.

"The plant is currently operating. It normally runs at a maximum 116% load, but we have reduced it to 106%. We are currently receiving 48 million cubic feet of gas a day," he said.

Attempts to contact Md Moniruzzaman, director (Commercial, Production and Research) of BCIC, and Abu Saleh Md Mosleh Uddin, managing director and divisional head (Production), were unsuccessful.

CUFL was established in 1987 with technical assistance from Japan. Kafco was registered as an international joint venture in 1981 and began full commercial production in late 1994. Its shareholders include Bangladesh, Denmark, the Netherlands and Japan.

Bangladesh's annual fertiliser demand is around 6.9 million tonnes, with imports meeting about 80% of total demand.