The uncertainty over resumption of caprolactam production at Fertilisers and Chemicals Travancore Limited (FACT) has ended with the company’s Board of Directors taking a decision to resume the production, at its meeting here last week. Though the exact date for resuming the production has not been announced, the employees of the public sector company were told on Independence Day that the Board had taken a decision to this effect.
With a capacity to produce 50,000 tonnes of the organic compound, FACT stands to boost its financial performance substantially. The financially-troubled PSU expects caprolactam sales to significantly help its turnaround even as the company had made operational profits for the past two months.
With the price of LNG around US$8.5 per mmBtu, FACT should be in a position to substantially improve its performance for the remaining part of the financial year, said sources in Save FACT Action Committee, which has been pressing the management for restarting caporlactam production.
The resumption of production comes at a time when there is increased demand for the compound in India. Sources said that even though FACT would get LNG at a price slightly higher than Gujarat State Fertilizers, FACT stood to gain because of the subsidy available for ammonium sulphate.
Even the combined production from FACT and Gujarat Fertilizers would not be enough to meet the demand for the compound in the domestic market, trade union sources said.
It is nearly four years since caprolactam production was stopped at FACT. The time is right for the resumption of production as demand for the product has gone up in the country.