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FACT to rope in private firms for expansionqrcode

Jun. 8, 2012

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Jun. 8, 2012

After failing to elicit a satisfactory response from public sector units (PSUs) to partner in its Rs 6,000-crore expansion plan, public sector undertaking Fertilizer and Chemicals Travancore Ltd (FACT) has invited expressions of interest (EoIs) from both public and private companies for a joint venture or through alternative business models.

"Due to the poor response from PSUs to the joint venture plan a few months ago, we are also inviting joint venture EoIs from the private sector. We are expecting a good response this time round," said a FACT official. The business model proposed is a 50:50 JV between FACT and the participating company for a specific or combination of projects.

The expansion and diversification plans of FACT, which has interests in fertilisers and petrochemical production, is intended to sustain its productivity levels and improve profitability, the official said.

"The Rs 6,000-crore outlay decided earlier for the entire project pipeline remains unchanged. In addition, we are looking at setting up a Gypsum Park which has diverse applications in the construction field," the official said. Kochi-based FACT currently has a stock of approximately 60-70 lakh tonnes of phospho gypsum in store at its production facility at Ambalamedu in Cochin. This gypsum is being sold to cement companies. "We sell 6-7 lakh tonnes of gypsum annually, and also produce the same quantity. Hence, our stock remains largely intact throughout the year," the official said.

The gypsum park will help FACT reach a wider range of parties interested in utilizing products like gypsum boards, gypsum plaster, decorative cornices, fly ash and gypsum bricks which have a wide range of applications in the construction industry. FACT has said that it will provide all assistance to develop the park with the available infrastructural facilities.

Besides the gypsum park, key components of the expansion plan include a new sulphuric acid plant, a urea plant, Nitrogen-Phosphate (NP) complex fertiliser plant, Single Super Phosphate (SSP) plant and an ammonia-urea complex. Almost all the projects will be set up at the FACT Cochin and Udyogamandal divisions. FACT is also considering the possibility of combining the 2,000 Tonnes Per Day (TPD) sulphuric acid plant and the 1,000 TPD NP plant as a single block and the urea plants as a separate block. Further, the company is looking to set up an integrated ammonia-urea complex which will have a production capacity of 2,800 TPD of ammonia and 3,500 TPD of urea, involving capital expenditure of Rs 4,600 crore.

At a project outlay of Rs 210 crore, FACT will set up an integrated complex fertiliser production facility at the company's Kochi divison capable of manufacturing multiple NP grades. This will help FACT increase its complex fertilizer production to 10 lakh MTPA annually. The company will also set up a urea plant with production capacity of 1,500 TPD at its Udyogamandal division on an outlay of Rs 858 crore.

The sulphuric acid plant will be set up at an investment of Rs 318 crore and have production capacity of 2,000 TPD. At the Udyogamandal division, FACT will set up a 500 TPD plant to manufacture SSP on investments of Rs 60 crore.

FACT had proposed to invite EoIs a second time for its expansion plan a few months ago, but this had been delayed. It is looking at the proposed LNG terminal in Kochi to serve as a gas link for both feedstock and fuel in place of naphtha and furnace oil.

Shares of FACT on the Bombay Stock Exchange closed up 1.62% at Rs 28.20 on Thursday. The stock was trading 41% below its 52-week high of Rs 47.65 on August 3 last year.

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