Aditya Birla Nuvo shuts down its urea plant in UP for a month

New Delhi: Aditya Birla Nuvo Friday shut its urea plant in Uttar Pradesh for about a month as cost of production beyond capacity has become unviable due to the current policy of the government.

The plant is expected to resume operations in the first week of April, the company said in a BSE filing.

"The shutdown of the plant is necessitated due to policy of the Government of India for production beyond 100 percent quantity as permissible under the pricing mechanism, during the financial year 2014-15," the company said in BSE filing.

Urea is a controlled commodity. Government gives the difference between cost of production and MRP as subsidy.

However, for production beyond 100 percent capacity, the subsidy is calculated on the basis of import prices. According to sources, this makes production beyond capacity unviable as import prices have come down substantially.

The annual capacity of the Birla plant is about 1.6 million tonnes. The company will carry out various maintenance jobs during the shutdown period, it added.