Chittagong Urea Fertilizer Limited History and Current Status

Chittagong Urea Fertilizer Limited has a rich history dating back to its establishment in 1972. The company was set up to produce urea fertilizer, which was a crucial input for Bangladesh's agricultural sector at the time.

The company's first production unit was commissioned in 1973, and it started producing urea fertilizer with a capacity of 1,000 tons per day. This was a significant milestone for the company and marked the beginning of its journey in contributing to Bangladesh's agricultural growth.

Chittagong Urea Fertilizer Limited has since undergone several expansions and modernizations to increase its production capacity and improve efficiency. Today, the company operates with a production capacity of 1,800 tons per day, making it one of the largest urea fertilizer producers in the country.

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Chittagong Urea Fertilizer Limited was built in 1987 in Rangadia, Anwara Upazila, Chittagong District, Bangladesh.

The factory was constructed by the Japanese Toyo Engineering Corporation, a company known for its expertise in building large-scale industrial projects.

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The factory has a capacity to produce 1700 tonnes of urea and 1000 tonnes of ammonia per day.

However, the factory has faced several setbacks, including a major damage to the reactor and cooling tower on 31 January 2015.

The government of Bangladesh closed the factory for repairs, which were carried out by the Italian company AXO Welding at a cost of 400 million taka.

The factory was reopened on 7 July 2017, but production was suspended again on 22 December 2017 due to gas shortages.

The factory relies on gas supplied by Karnaphuli Gas Distribution Company Limited and has been affected by frequent gas shortages, leading to losses of up to 100 million taka per month.

The factory's production is also limited by the fact that it cannot produce at optimal levels due to gas shortages, resulting in significant financial losses.

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CUFL has a history of extended shutdowns, with the most recent one lasting 8 months due to mechanical failures and gas supply shortages.

The factory had been shut down since February 7, resulting in a production loss of Tk960 crore.

Production resumed at 1am on Monday, October 14, after the repair of the malfunctioned pump costing Tk3 crore.

The factory can produce 1,200 tons of urea fertilizer per day, with estimated daily revenue of Tk4 crore, if the gas supply remains uninterrupted.

CUFL remains cautious about future operations, acknowledging that further disruptions could occur if the gas supply is interrupted again.

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CUFL has faced multiple shutdowns due to mechanical issues and gas supply shortages. The factory has been shut down for extended periods, including an 8-month shutdown and an 11-month and 20-day shutdown in the past.

Production at CUFL resumed on October 14, 2023, after an 8-month shutdown, but was halted again on February 7, 2024, due to similar issues. The factory requires 45 million cubic feet per day of gas to maintain daily production.

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The prolonged closure of CUFL resulted in a production loss of around Tk960 crore, at a rate of approximately Tk4 crore per day. The factory can produce 1,200 tons of urea fertilizer per day.

CUFL has previously restarted operations after mechanical issues and gas supply disruptions, but these resumptions have been short-lived. The factory had previously restarted operations on October 14, 2023, but was halted again on February 7, 2024.

The factory had also stopped production for nearly a year, from November 2022 to November 2023, due to mechanical and gas supply issues. CUFL had set a target of producing 1.5 lakh tonnes of fertilizer for the upcoming season, but is now falling short by 50,000 tonnes.

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More than 1,000 employees are drawing around Tk 4 crore in monthly salaries and allowances.

CUFL staff remain on the payroll despite the factory's suspension of operations since April 11.

Maintenance costs at CUFL run into several more crores per month, according to CUFL officials.

The daily loss for the factory when idle is around Tk 4.5 crore.

This loss is due to the factory's inability to generate profits, which it could have done under uninterrupted production.

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CUFL is a state-owned urea fertiliser company located in Chittagong, Bangladesh. It was set up in 1987 at a cost of Tk 1,700 crore.

CUFL has a design capacity to produce 561,000 tonnes of urea annually, but it has never reached this amount since its inception. The factory requires 51 million cubic feet of gas per day to operate at full capacity.

CUFL's production has been suspended since April 11 due to a persistent gas crisis, leading to significant financial losses for the government. The company has not been in production for more than three months in a year over the past several years, largely due to chronic gas shortages.

The factory suffers a daily loss of around Tk 4.5 crore when idle, and repeated shutdowns are affecting the plant's long-term viability. If chemical plants remain closed for extended periods, equipment begins to deteriorate, driving up repair and maintenance costs.

CUFL has a workforce of over 1,000 employees, who draw around Tk 4 crore in monthly salaries and allowances. The company could generate profits of Tk 1 crore per day under uninterrupted production, but frequent halts have resulted in monthly losses of around Tk 50 crore on average.

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