Kochi: Debt-ridden Fertilizers and Chemicals Travancore Ltd (FACT) is turning to residue and by-products from its factories to expand business and profits. The state-run firm has formed joint ventures (JV) to make building panels and ships using material from its fertilizer and chemical plants.
FACT had taken a Rs600 crore loan in 1998 from the Union government for an ammonia plant. In 2006-07, the government wrote off Rs292 crore and converted an equal amount into equity, said chairman and managing director George Sleeba. The company returned to profitability in 2007-08, with net profit of Rs9 crore as it gained from a Rs100 crore government grant. FACT now expects a Rs50 crore profit for 2008-09, largely from subsidies and cheaper raw material, but needs to venture into other businesses to sustain the momentum, said Sleeba.
FACT has entered into a Rs100 crore JV with state-owned Rashtriya Chemicals and Fertilizers Ltd (RCF) and Australia-based Rapid Buildings System Pty Ltd to use its gypsum—a by-product from the manufacture of phosphoric acid used in making fertilizers—to make building panels and other products.
FACT, which generates about 500,000 tonnes of gypsum every year, will provide the land, factory and gypsum for the venture, FACT-RCF Building Products Ltd, while Rapid Buildings System will contribute the technology and RCF will market the products.
“The acidic nature of gypsum makes it unfit for land-filling. We knew that natural gypsum was being used for its quality to control cement setting,” said Sleeba.
FACT has also formed two JVs to set up container freight stations. The company has entered into a Rs100 crore JV with the Central Warehousing Corporation for a freight station, and has given its land on lease to the project. It has another Rs50 crore JV with the Container Corp. of India Ltd for a container freight station.