The public sector Fertilizers and Chemicals Travancore (FACT) is learnt to have reported a loss of over Rs.300 crore, some indicators putting it around Rs. 330 crore, during the last financial year, which was marked by reduced production, comparatively poor off-take and spiralling prices of raw materials.
Shortage of capital
The company, overwhelmed by a severe shortage of working capital and high cost of naphtha, is yet to officially announce its financial results even as the Results Framework Document of the Union Department of Fertilizers for 2013-14 targets getting the Board for Reconstruction of Public Sector Enterprises (BRPSE) recommendations for the company’s financial restructuring by the end of 2013 or early next year.
Sources said that out of the over Rs. 300 crore of the estimated losses, about Rs. 185 crore is being accounted for by interest outgo on account of a severe shortage of working capital.
The working capital shortage continues despite a study by Deloitte Touche Tohmatsu India recommending a working capital support of Rs. 450 crore in 2009 for the company, which was expected to make profits of over Rs. 100 crore a year with such a support.
FACT, one of the earliest fertilizer plants in South India, has had mixed fortunes over the past six years.
The company recorded a profit of nearly Rs. 20 crore during 2011-12. The two years preceding this period were marked by heavy losses.
Meanwhile, FACT is readying to venture into large-scale commercial sale of carbon dioxide from its 900-tonne per day ammonia plant at the Udyogamandal division of the company.
The firm is set to invite expression of interest from potential buyers for its daily carbon dioxide production of 960 tonnes a day or roughly three lakh tonnes a year.
Currently, the company sells the bulk of the carbon dioxide from the ammonia plant to local buyers and vents the rest of it.