Rs 2,200 crore FACT revamp package by May

The long wait for the Union government's revival package for the country's oldest fertilizer plant may not stretch beyond May this year.

With the ministry of fertilisers referring the Rs 2,200-crore package for Kochi-based Fertilisers and Chemicals Travancore (FACT) to the committee of secretaries for consideration, the company expects the full package to come through by April.

GATHERING STEAM

The ministry of fertilisers has sent the Rs 2,200-crore package to the committee of secretaries

The Rs 200-crore interim grant will take care of FACT's working capital requirements and expansion and modernisation plans

Deloitte, the consultant framing the revival package, is expected to submit the report by this month-end

While the finance ministry cleared an interim non-plan grant of Rs 200 crore for FACT on Thursday evening, the revival package will be approved for release after Deloitte, the consultant framing the revival package, submits a detailed study based on the recommendations of the tariff commission. The report is expected to be submitted by this month-end.

"The recommendations include capacity expansion and new ventures. We expect a decision from the concerned ministries by March 31 and the final clearance by the end of April under 11th Plan," FACT Chairman and Managing Director George Sleeba said.

He added the Rs 200-crore interim grant, approved by the board for reconstruction of public sector enterprises in 2005, would take care of FACT's working capital requirements and expansion and modernisation plans during the financial year 2009.

Under the revival package, FACT plans to expand capacities at its urea and caprolactum plants with an investment of Rs 1,500 crore and Rs 400 crore, respectively.

Among other proposals are a Rs 300-crore nylon plant, which will utilise caprolactum as a key raw material input. "Work on these projects are being scheduled under the 11th Five Year Plan," Sleeba said.

With Petronet LNG terminal at Kochi "" which will enable FACT to shift to cheaper gas-based production from naphtha "" still some time away from commissioning, FACT is planning to diversify.

The company is entering into direct manufacturing of gypsum-based products for cement companies such as Tancem, Ultra Tech and Dalmia Cements.

Its engineering subsidiary, FACT Engineering Works, is exploring a joint venture with Cochin Shipyard to supplement major ship-building projects. FACT will utilize its shop facility and 11 acres of land as equity in the JV, Sleeba said.

With seven sick units under its wings, including the urea, ammonia and caprolactum plants, the company made losses of Rs 135 crore on revenues of Rs 1,500 crore in financial year 2006-07.