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A matter of FACT: plant to reopen with govt help, cheap fuel

A matter of FACT: plant to reopen with govt help, cheap fuel
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First Published: Fri, May 11 2007. 12 05 AM IST

Revival man: Chemicals and fertilizers minister Paswan hopes the Rs22,000-crore package will make India self-reliant in fertilizers.
Revival man: Chemicals and fertilizers minister Paswan hopes the Rs22,000-crore package will make India self-reliant in fertilizers.
Updated: Fri, May 11 2007. 12 05 AM IST
Kochi: The fertilizer ministry is to consider a Rs2,200 crore revival package for the ailing public-sector unit, the Fertilisers and Chemicals Travancore Ltd (FACT). The proposal would soon be placed before the cabinet, said chemicals and fertilizers minister Ram Vilas Paswan.
One of the main points of the revival package is to re-open FACT’s urea plant by 2010 at an estimated cost of Rs1,500 crore. This would help raise production to 7.2 lakh tonnes per annum from the 2.5 lakh tonnes the unit produced before it was shut down in 2003 owing to the high price of naphtha, the fuel for running the plant. The revival plan focuses on switching to cheaper liquefied natural gas (LNG).
Another proposal is to step up production of caprolactam—a compound that is an intermediate in nylon manufacture—to 1.5 lakh tonnes from 50,000 tonnes currently, with technical assistance from a Netherlands-based company. This would involve an expenditure of Rs400 crore. A downstream project to manufacture nylon, utilizing 25% of the expanded caprolactam facility at an investment of Rs300 crore is the third proposal submitted for consideration, Paswan said after a company visit.
Revival man: Chemicals and fertilizers minister Paswan hopes the Rs22,000-crore package will make India self-reliant in fertilizers.
FACT, which has been in the red since 1998 and has posted a net loss of Rs135 crore for the fiscal ended 31 March 2007, was also expected to be turned around by 2010, when the proposed Petronet LNG gas plant in Kochi is commissioned, Paswan said.
The minister said demand for fertilizers in the country was around 25 million tonnes (mt) and production was 20mt, forcing India to go in for imports. It was in this backdrop that his ministry proposed reviving seven plants in the public sector, including Fertilizer Corp. of India and Hindustan Fertilizer Corp., under a Rs22,000-crore package that has already got government approval.
Paswan said the units at Barauni, Durgapur, Haldia, Sindri, Gorakhpur, Talcher and Ramagudam were shut by 2002 as they, like FACT, had become unviable owing to the high cost of naphtha. The feedstock of these plants would be shifted from naphtha to LNG, considering that there will be greater availability of natural gas by 2010. With the revival of these plants, the minister expected production to reach 30mt in the next five years, which should make the country self-reliant in fertilizers.
About payment of subsidy to fertilizer companies, Paswan said the total subsidy amount for the last fiscal was Rs54,000 crore, of which half had been paid. The remainder was expected to be paid by June.
FACT chairman and managing director G.S. Mangat said that as part of its diversification, the company—in coordination with the Kerala government—has submitted a proposal for an IT park called Fact Knowledge Zone on 500 acres of its own land, a food park and a defence park to manufacture defence ancillary equipment. These proposals would not only improve FACT’s profitability, but also help in generating employment, Mangat added.
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First Published: Fri, May 11 2007. 12 05 AM IST
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