Nano Urea and Nano DAP Manufacturing Facility

Project Overview

An Indian agricultural chemicals major and a European nano-encapsulation and formulation technology partner engaged IMARC Engineering to establish a greenfield nano fertilizer manufacturing facility at Panipat, Haryana. The project was structured against the Government of India's structural push to localise and substitute nano fertilizers for conventional granular urea and DAP, a push anchored on the world's first commercial nano fertilizer product family launched by the Indian Farmers Fertiliser Cooperative (IFFCO) with Nano Urea Liquid in June 2021 and Nano DAP Liquid in April 2023, each 500 ml bottle designed to substitute one 45-to-50 kilogram bag of conventional urea or DAP respectively.

The scheme framework is anchored on the recently approved National Investment Policy for Urea-2026 (NIPU-2026), approved by the Cabinet Committee on Economic Affairs (CCEA) in July 2026 replacing the lapsed NIP-2012 policy and targeting the addition of approximately 10 million tonnes of production capacity to bridge India's demand-supply gap, alongside the Government's target of replacing approximately 10 percent of conventional DAP and urea consumption with nano substitutes within three to four years.

The Interim Budget 2024-25 announced expansion of Nano DAP application as a fertilizer across all agro-climatic zones in India. The Union Budget 2025-26 allocated approximately INR 1.67 lakh Crore to the Fertiliser Subsidy framework administered by the Department of Fertilizers, and the technology transfer of nano fertilizer manufacturing from IFFCO to National Fertilizers Limited and Rashtriya Chemicals and Fertilizers under Department of Fertilizers administrative control, through Non-Disclosure Agreements and Memoranda of Understanding, creates the enabling framework for private-sector and cooperative-sector expansion of nano fertilizer manufacturing capacity in India.

The project involved establishing 1.2 crore bottles per annum of nano fertilizer manufacturing capacity across two product families, 60 lakh bottles of Nano Urea Liquid substituting approximately 2.7 lakh tonnes of conventional urea, and 60 lakh bottles of Nano DAP Liquid substituting approximately 3 lakh tonnes of conventional DAP, at nameplate capacity, with matched 500 ml bottling, labelling, packaging, and distribution logistics infrastructure. Site infrastructure was designed for Phase 2 expansion adding Nano NPK and Nano micronutrient product lines aligned with the broader Indian nano fertilizer portfolio development pipeline.

Client's Challenges

The client faced several specific challenges in establishing greenfield nano fertilizer manufacturing in India:

• Nano-encapsulation and formulation precision: Engineering the nano-encapsulation of nitrogen (for Nano Urea) and combined nitrogen-phosphorus (for Nano DAP) nutrients into nanoparticles in the 1-to-100 nanometre size range with the controlled-release, high leaf-surface absorption, and dosage-reduction characteristics that define the nano fertilizer product families, with associated formulation stability, particle size distribution control, and shelf-life engineering.
• Fertiliser Control Order (FCO) notification pathway: Achieving Fertiliser Control Order notification under the Ministry of Agriculture and Farmers Welfare framework for each product family — the required regulatory clearance for commercial sale, alongside BIS product standard compliance verification and Department of Fertilizers Nano Fertilizer Framework alignment for state agricultural department procurement participation.
• Nitrogen and phosphate feedstock supply: Managing supply of ammonia and urea intermediate for the Nano Urea line (drawing on approximately 87 percent domestically met urea consumption base) and diammonium phosphate intermediate for the Nano DAP line (where approximately 60 percent of Indian DAP consumption is currently imported), with structured long-term supply arrangements aligned with the Panipat petrochemical hub adjacency.
• Bottling and packaging precision: Engineering high-throughput 500 ml bottle filling, sealing, labelling, and packaging infrastructure at nameplate scale of 1.2 crore bottles per annum — with associated quality control, batch traceability, and the emerging QR code and barcode framework for the Department of Fertilizers Direct Benefit Transfer and Fertilizer Retail Outlet integration.
• Multi-state distribution and awareness: Coordinating multi-state agricultural department and cooperative federation distribution alongside farmer awareness and adoption engineering — with the associated demonstration plot, extension worker training, and agricultural retail network alignment critical to progressive nano fertilizer adoption against the deeply entrenched conventional granular fertilizer usage pattern.
• Workforce build-up: Recruiting 260 personnel including nano-formulation chemists, process engineers, quality technicians, bottling and packaging operators, and quality specialists in the Panipat regional labour market that hosts the broader NFL Panipat and IOCL Panipat petrochemical and fertilizer ecosystem.

What We Did

• Pre-Investment and Strategic Advisory

Our feasibility study evaluated four candidate Indian locations — Panipat (Haryana), Aonla (Uttar Pradesh), Paradip (Odisha), and Namrup (Assam) — with Panipat selected on the strength of the surrounding NFL Panipat fertilizer ecosystem providing urea intermediate supply, IOCL Panipat refinery and petrochemical hub providing ammonia and select nitrogen intermediate feedstock, established road, rail, and Dedicated Freight Corridor connectivity to the Northern and Central Indian agricultural markets, the Haryana Enterprises and Employment Policy incentive framework, and access to engineering talent from IIT Delhi, NIT Kurukshetra, and the surrounding technical education base.

CapEx planning of INR 210 Crore covered the nano-encapsulation and formulation reactor area, the bottling and packaging lines, the quality laboratory, the warehouse, the effluent treatment plant, and central utilities. Financial modelling demonstrated post-tax IRR of 24.6 percent at full ramp with a 4.8-year payback.

• Engineering and Design Services

IMARC designed a 20,000 sq.m built-up facility on a 10-acre plot comprising the raw material receiving and storage area for urea intermediate, ammonium phosphate intermediate, and specialty additives, the nano-encapsulation and formulation reactor area with dedicated reactor trains for Nano Urea and Nano DAP product families, the maturation and stability control area with dedicated tankage sized for the batch-to-batch quality verification cycle, the multi-line high-speed 500 ml bottle filling, sealing, and labelling area supporting parallel Nano Urea and Nano DAP throughput, the packaging area covering carton packing and pallet-level despatch preparation, the raw material and finished goods warehouse, the quality laboratory with particle size analysis (dynamic light scattering), zeta potential measurement, and nutrient concentration verification infrastructure, the effluent treatment plant meeting Haryana State Pollution Control Board specifications, and central utilities.

Process utility design covered 3 MW grid demand supplemented by a 1 MW captive rooftop solar array, dedicated compressed air and specialty gas supply for the reactor operations, precision temperature and humidity HVAC across the formulation and bottling zones, integrated MES for bottle-level lot traceability aligned with Fertiliser Control Order and Department of Fertilizers documentation requirements, and integration with the Fertilizer Direct Benefit Transfer digital framework.

• Procurement and Supply Chain Support

We executed a multi-geography procurement programme across 36 critical vendors. Nano-encapsulation and formulation reactor infrastructure was sourced from established European specialists with documented nano-formulation industry references. High-speed 500 ml bottle filling, sealing, and labelling equipment was sourced from established European and Southeast Asian packaging equipment specialists with documented liquid fertilizer packaging references.

Quality laboratory equipment covering dynamic light scattering, zeta potential measurement, and nutrient concentration verification was sourced from European and US specialty analytical equipment specialists. Effluent treatment plant infrastructure was sourced from Indian water technology specialists. Raw material sourcing was structured through the surrounding fertilizer ecosystem: urea intermediate from NFL Panipat and the adjacent Indian urea manufacturing base, ammonium phosphate intermediate from a combination of Indian producers and structured imports, specialty additives and nano-formulation chemistry from a combination of Indian specialty chemicals suppliers and international specialists, and 500 ml PET bottle supply from qualified Indian packaging suppliers. Documented Domestic Content reached 76 percent in Year-1 operations and 82 percent in Year-2 as the Indian supplier ecosystem developed.

• Project Execution and Site Management

Our turnkey project management delivered 20 months from groundbreaking to first commercial dispatch, coordinating civil construction, mechanical and electrical erection, effluent treatment plant installation, equipment integration, and phased commissioning across the raw material handling, nano-encapsulation and formulation, bottling and packaging, quality laboratory, and effluent treatment zones.

Phased commissioning ran the raw material handling and Nano Urea reactor line first (as the critical-path bottleneck for first product qualification), followed by the Nano DAP reactor line, then the bottling and packaging lines with the first Nano Urea Liquid batch completed in month 17 and the first Nano DAP Liquid batch in month 18, and finally the quality laboratory and effluent treatment plant with Fertiliser Control Order notification testing campaigns across the product families.

Multi-vendor coordination across European, Southeast Asian, US, and Indian contractors required a 12-strong owner's engineering team supplemented by 5 European resident engineers from the nano-encapsulation technology partner during the reactor commissioning and initial Fertiliser Control Order notification phases.

• Compliance, Quality and Sustainability

IMARC led certification readiness across Fertiliser Control Order (FCO) notification under the Ministry of Agriculture and Farmers Welfare framework for both Nano Urea Liquid and Nano DAP Liquid product families — secured through documented product testing, and agronomic validation completed in Year-1 of operations — BIS product standards compliance verification, Department of Fertilizers Nano Fertilizer Framework alignment, One Nation One Fertilizer scheme brand and packaging compliance, and ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, and ISO 50001:2018 management system certifications.

Environmental compliance covered Haryana State Pollution Control Board Consent to Establish and Operate, Hazardous Waste Authorisation for formulation process residues, and Extended Producer Responsibility commitments for end-of-life bottle and packaging material recovery under the Plastic Waste Management Rules 2022 framework.

The facility achieved IGBC Gold certification through 1 MW captive rooftop solar covering approximately 22 percent of facility daytime energy demand, heat recovery from reactor operations, variable-frequency drives across HVAC and process pump systems, and 20 percent lower facility energy intensity versus the Southeast Asian specialty chemicals manufacturing industry benchmark.

Final Results

Operational Performance

The facility achieved mechanical completion in 20 months with first commercial nano fertilizer dispatch in month 21. Full 1.2 crore bottles per annum nameplate capacity was reached at 76 percent utilisation (equivalent to 91.2 lakh bottles in Year-2) by month 17 of operations, with sustained first-pass quality acceptance across both product families.

Fertiliser Control Order notification was secured for both Nano Urea Liquid and Nano DAP Liquid product families in Year-1, BIS product standards compliance was verified across the portfolio, Department of Fertilizers Nano Fertilizer Framework alignment was completed, and successful supplier qualification audits were passed with three state agricultural departments, two agricultural cooperative federations, and one export customer covering supply to a South Asian agricultural cooperative programme across the first operational year.

Financial Outcomes

Final CapEx of INR 200 Crore delivered 4.8 percent savings against the INR 210 Crore budget through optimised civil packaging, disciplined Indian-fabrication leverage across the structural and process infrastructure scope, adjacency benefits from the NFL Panipat and IOCL Panipat feedstock ecosystem, and Haryana state industrial policy incentive benefits.

Year-2 revenue of INR 296 Crore was generated at an EBITDA margin of 14 percent, consistent with established specialty chemicals manufacturer reporting, supported by the growing Indian nano fertilizer demand pipeline aligned with the 10 percent conventional substitution target within the three-to-four-year window alongside the emerging export order book across South Asia, Africa, and select American markets.

Market Access

Long-term supply agreements were signed with three state agriculture departments under the Fertilizer Retail Outlet framework and the One Nation One Fertilizer scheme. These agreements cover annual supplies of Nano Urea Liquid and Nano DAP Liquid through state procurement channels. Two agricultural cooperative federations also committed to purchases through their cooperative networks, while an export customer agreed to procure products for a South Asian agricultural cooperative programme.

These agreements support the company’s international expansion, including IFFCO’s 20-year royalty framework for overseas sales and the expansion of Nano Urea supplies to more than 25 countries. By Year 2, exports accounted for 14% of revenue, supported by market expansion in Africa and the Americas.

Sustainability Impact

Our integrated design — combining 1 MW captive rooftop solar covering approximately 22 percent of facility daytime energy demand, heat recovery from reactor operations, variable-frequency drives across HVAC and process pump systems, and LED lighting throughout — achieves 20 percent lower facility energy intensity versus the Southeast Asian specialty chemicals manufacturing industry benchmark.

The nano fertilizers produced by the facility support Indian agricultural decarbonisation through structural nitrogen-use efficiency improvement (reducing nitrogen fertilizer runoff and associated nitrous oxide emissions), substantial dosage reduction versus conventional granular fertilizers, reduction of soil-quality degradation from over-application of chemical fertilizers, and reduction of the government's fertilizer subsidy outgo through substitution of subsidized conventional urea and DAP with unsubsidized nano variants. The facility holds IGBC Gold certification and operates end-of-life bottle and packaging recovery partnerships under the Plastic Waste Management Rules 2022 framework.

Strategic Impact

The project established a meaningful greenfield nano fertilizer manufacturing capability under the Fertiliser Control Order framework, positioning the client across the structural nano fertilizer substitution trajectory targeting 10 percent conventional DAP and urea replacement within three to four years, the National Investment Policy for Urea-2026 domestic manufacturing expansion targeting approximately 10 million tonnes of additional production capacity, and the pioneering export opportunity created by Indian nano fertilizer global patent leadership.

Year-2 revenue of INR 296 Crore, Fertiliser Control Order notification across both product families, three state agricultural department supply commitments, and the South Asian export entry led the client to approve Phase 2 expansion comprising Nano NPK and Nano micronutrient product lines.

IMARC Engineering's end-to-end EPCM advisory, combining nano-encapsulation and formulation engineering, Fertiliser Control Order and Department of Fertilizers scheme navigation, BIS compliance readiness, Panipat feedstock ecosystem integration, and disciplined multi-vendor execution, enabled the client to anchor a strategically important Indian industrial asset in a sector where India holds pioneering global patent leadership through IFFCO's world-first Nano Urea and Nano DAP commercialisation, and where the structural transition from conventional granular fertilizers to nano fertilizers represents a genuine reshaping of the Indian and adjacent global fertilizer market.