The Hindu : Kerala / Kochi News : FACT aims for Rs.50 crore profit this year

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Kerala - Kochi

FACT aims for Rs.50 crore profit this year

Staff Reporter

Registered a profit of Rs.9 crore last year
The proposed electricity tariff hike may affect FACT adversely

KOCHI: The Fertilisers and Chemicals Travancore Limited (FACT), facing the difficult task of finding a balance between the spiralling price of raw materials and maintaining profitability, has cut out a task for itself for the current financial year — a profit of Rs.50 crore.

In a personal appeal to each employee of the company on Thursday, George Sleeba, Chairman and Managing Director of Kerala’s largest public sector unit, said that they should resolve to attain the goal despite the serious challenges posed by the high price of raw materials, uncertain market conditions and higher cost of electricity.

FACT which registered a profit of Rs.9 crore last year began the current year on a positive note with a hard-earned Rs.1.12 crore operating profit. This is no mean achievement considering that even during the years when FACT’s annual profits hovered around Rs.90 crore, the first quarter figures used to be in the red, company sources pointed out.

First quarters are characteristically off colour because of the annual maintenance shutdowns and the poor offtake of major products like Factamfos before the onset of the monsoon.

The first quarter achievement has been made possible by the substantial increase in sales, worth around Rs.400 crore, during the period.

The FACT resolve to post a profit of Rs.50 crore during the year has got a big boost with the production of Factamfos, the sales driver for the fertiliser company, being normalised. For nearly a month now, FACT has been producing an average 2,000 tonnes of Factamfos daily.

Mr. Sleeba appealed to the employees to cut cost, to end irresponsible use of resources and to come out with suggestions on cost-cutting. Every suggestion for cost-cutting will be considered on a monthly basis by a high-power committee constituted for the purpose. If found practical, the suggestions will be implemented with the active participation of those coming up with the suggestion, the Chairman’s message said.

The communication also pointed to the challenge posed by the move of the Kerala State Electricity Board, backed by the Kerala State Electricity Regulatory Commission, to hike electricity charges. It is learnt that FACT will have to bear an additional burden to the tune of Rs.2 crore a month when the proposed hike is in place.

Raw materials

Meanwhile, it is learnt that FACT’s purchasing committee will take a decision within a day or two on going in for intermediate products to overcome the scarcity and high price of key raw materials like rock phosphate and phosphoric acid.

The caprolactam and ammonium sulphate units of FACT are still shut after production was brought to a halt early this June.

The shutdown was forced by the high price and scarcity of raw materials like rock phosphate.

Cost of inputs like benzene has gone up to Rs.66,000 a tonne from the previous Rs.42,000 a tonne.

In the face of these developments, buying intermediate products will help FACT bypass the first three stages and cut costs substantially, the bulk of it coming in energy savings.

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