Firm had loss of Rs. 100 crore so far this year
Save FACT Action Council, a combine of trade union of officers and employees of the public sector Fertilizers and Chemicals Travancore, will begin a series of steps on Thursday to save the company, which has reportedly fallen on bad days.
A spokesman for the Council said that the theme of the series of action, that begins on Thursday with a dawn-to-dusk fast before the statue of founder chairman M. K. K. Nair at Udyogamandal will culminate in a delegation visiting New Delhi with a memorandum to the Union government.
The Council members will also march to the corporate office at 4 p. m. on Thursday as part of the actions being organised to press for demands that include drawing better compensation for use of naptha as feedstock.
The theme of the proposed programme of action is “Save FACT, Save Kerala”, said the spokesman as he pointed out that FACT had played a key role in ensuring the progress of agriculture in the State. The fertilizer company is the biggest public sector undertaking in the State and has contributed substantially to the arts and cultural scene in Kerala.
However, FACT is now plagued by constant shortage of working capital and anomalies in the way compensation is paid by the Union government for the use of naptha, the price of which is highly volatile in the international market.
The figures released by the Save FACT Action Council said that fertilizer companies in North India received Liquefied Natural Gas (LNG) at the rates between US$1.5 and 4 where as FACT was buying naptha for as high as US$ 26 per MMBTU.
This has led to a situation in which FACT incurs heavy expense on production compared to its North Indian counterparts.
FACT has also been boxed into a corner because of lack of direction for the future. There are no diversification and expansion projects as of now.
However, if LNG is made available and its old plants are replaced with more efficient ones, the company can enter a new growth trajectory.
The Save FACT Action Council has also alleged that there are a lot of anomalies in fixing subsidies and has blamed some of the troubles of the company on the unprecedented rise in the price of raw materials.
FACT recorded a profit of Rs. 19.8 crore during the last financial year though the current year has been a bad one with the first half of 2012-13 recording a loss of Rs. 100 crore.
The FACT workers and officers have said that naptha compensation for Factamfos should be Rs. 6,500 per tonne and Rs. 7,600 per tonne for ammonium sulphate.
The revised compensation should be paid from April 2010.
The Council has also demanded that the Union government must extend an interest-free loan of Rs. 450 crore towards the company’s working capital requirements.