Fertiliser major is on a turnaround path
KOCHI, October 8: The resumption of the Caprolactam plant after an interval of eight years could ramp up the revenue of Fertilisers and Chemicals Travancore Ltd (FACT) by Rs500 crore annually, according to the company chairman.
Addressing the shareholders at the general meeting convened to consider the financials of FY20, the chairman and managing director (CMD) of the company, Kishor Rungta, said the company could do the trial run of the plant successfully after having remained shut down for eight years.
“The company expects to restart Caprolactam operation during the financial year 2020-21, which may add Rs500 crore annually to the topline,” Rungta added.
In fact, though there was an attempt to resume the operation of the plant during 2016, after four years being in suspended animation, it somehow couldn’t reach full fruition.
FACT is putting in all efforts to bring the company back into the past glory. It has started using coastal shipping as a new mode of transport for the movement of fertilisers to the East and West coasts of the country.
And as a result, a total of 20 containers of Ammonium Sulphate has been despatched to Haldia Port to distribute to the farmers of West Bengal.
The fertiliser major has finalised CAPEX worth Rs608 crore for sustainable operations of the company in the long-run and to consolidate the existing business.
These projects include 1650 MT per day fertiliser project, setting up of new Ammonia, Sulphuric Acid/Phosphoric Acid tanks, barges for transportation of Ammonia etc.
Environmental clearance has already been obtained for the major projects and the company expects to complete the projects by the year 2022.
Though with the backing of an extraordinary income of Rs972.17 crore from the sale of land, FACT could report a profit of Rs975.52 crore for the financial year 2019-2020, which is an all-time record.
But the company closed the first half of the current year ending June end, 2020 with a loss of Rs80.24 crore
Commenting on the industry, the CMD expressed optimism that the demand for fertilisers will remain buoyant during the financial year 2020-21 and the industry is expected to meet the requirements of farmers.
However, he added that liquidity crisis and volatility in input prices are likely to continue as the major constraints being faced by fertiliser industry in India.
Sale of land
During the financial year, FACT has sold 481.79 acres of land to Government of Kerala/KINFRA. As per the decision of the Centre, the sale proceeds will be utilised for the expansion projects of the company after meeting immediate working capital requirements as per the approval of the Union Cabinet.
The financial year 2019-20 has been a special year for FACT as it registered several production records. The highlights of performance include all-time high Income at Rs3,773 crore; all-time high profit at Rs976 crore; highest turnover in 9 years at Rs2,770 crore and highest sale of Factamfos in 19 years at 8.35 lakh MT.