Fact was making losses on two of its products-Factamfos and Ammonium Sulphate. With regard to Factamfos in september last, the loss per tonne was Rs 2200 while the production cost was Rs 15,483 per Mt.
But Sulphur and Phosporic acid costs had gone up very steeply since September last with the production cost now touching Rs 27,000 per Mt even as the selling price is unchanged.
In the case of Ammonium Sulphate, FACT had to stop its production in July last year as the loss was about Rs 12,270 per Mt. Even though financial restructuring was done in 2005-06,FACT made loss of Rs 125 crore in 2006-07 and Rs 195 crore in 2007-08 before receiving the Rs 200 crore assistance from the government.
The minister said FACT's operations are costly as it was dependent on Naphtha. Once the operations become gas based, profitablity would improve,he said.
The proposed LNG terminal in Kochi is expected to be operational by 2012 and efforts are also being made to connect Kochi to the National Gas Grid. All efforts would be made to see this happens at the earliest, he said.
As soon as gas is made available and should the price be economical,it should be possible to set up a million tonne urea plant in FACT at Rs 4000-Rs 5000 crore investment,he said
Presently, 70 to 80 per cent of the delivered cost of different fertilisers was being subsidised. Despite the fact the subsidy bill is increasing and is touching Rs one lakh crore, government was still ensuring fertilisers'availability to farmers at affordable prices to ensure country's food security, he said.
