KOCHI: The Fertilisers and Chemicals Travancore Ltd (FACT), a company majority owned by the Government of India (GoI), has given in‑principle approval for one of its largest expansion plans in recent years, with a capital investment of around Rs6,350 crore.
The plan covers the establishment of a phosphoric acid plant, a sulphuric acid plant, a urea plant, and associated storage and handling infrastructure. The scheme now awaits formal approval from the Government of India before rollout.
Financial backdrop and challenges
FACT’s audited results for FY 2025 showed revenue of around Rs4,050 crore, down from about Rs5,055 crore in FY 2024. For Q1 FY26, the company posted revenue of roughly Rs1,095 crore and net profit of Rs4.3 crore, marking a modest return to profitability following earlier losses.
The modest recovery reflects underlying challenges such as feedstock constraints, pressure on fertiliser margins, and the need for backward integration. The new expansion plan is aimed at addressing these structural issues and ensuring long‑term sustainability.
What the expansion entails
The phosphoric acid plant is expected to secure domestic sourcing of a key input for fertiliser production, reducing import dependence. The sulphuric acid plant will provide another critical intermediate chemical for complex fertiliser manufacturing.
The urea plant signals FACT’s renewed push into nitrogen fertilisers, broadening its product portfolio. Infrastructure upgrades for storage and handling will support upstream and downstream operations, with particular focus on the Udyogamandal plant near Kochi.
“This integrated upstream-downstream approach is aimed at fortifying FACT’s manufacturing base, improving margins and creating a more resilient business model,” said an analyst tracking public sector fertiliser companies.
Regional impact
FACT, headquartered in the Udyogamandal industrial belt, is a key employer and anchor for the fertiliser and chemical sector in Kerala. The new investment is expected to stimulate local supply chains, logistics, warehousing, and jobs – both direct and indirect — while strengthening the region’s industrial ecosystem.
The expansion also aligns with the central government’s push for domestic fertiliser production and import substitution, potentially attracting policy support for infrastructure, utilities, and incentives. For Kerala, this could reinforce the state’s position as a hub for fertiliser manufacturing.
Key considerations
While the board has granted in-principle approval, the scheme is subject to government sanction. The financing mix – debt, equity, or internal accruals – and execution efficiency will be critical. Past delays and feedstock disruptions underline operational risks.
Even with the new plants, fertiliser operations remain sensitive to global phosphate, sulphur, and acid intermediate prices. Domestic sourcing will help, but availability and costs will remain key factors in profitability.
Bottom line
FACT’s Rs6,350 crore expansion is a bold step to strengthen its manufacturing backbone and address structural vulnerabilities. If executed successfully, it could be a game-changer for the company and the Kerala industrial ecosystem. Delays or execution challenges, however, could add to the pressures the company is already navigating.
