The Hindu Business Line : National Fert to invest Rs 7,520 cr in revival of 2 closed units

National Fertilisers Ltd (NFL), the second largest producer of nitrogenous fertilisers in the country, will be investing around Rs 3,760 crore each on the revival of the closed units of Hindustan Fertiliser Corporation Ltd's (HFCL) Brauni plant and Fertiliser Corporation of India Ltd's Ramagundam plant.

"Going by the Government's policy on the revival of sick fertiliser units we have been given the task of reviving two closed urea units, at Brauni in Bihar and Ramagundam in Andhra Pradesh.

The techno-economic feasibility report (TEFR) has been submitted to the Government and we are awaiting the approval from the Cabinet," Mr G.S. Mangat, Chairman and Managing Director, National Fertilisers Ltd, told Business Line.

FUNDING

The company is looking at a grant of Rs 1,000 to Rs 1,500 crore from the Government for each of the plants while the rest of the investment would be raised from financial institutions.

Mr Mangat also said that they might look at an equity stake in the plants, provided they get the approval from the Government.

According to industry sources, each of the plants has an accumulated loss of around Rs 3,500 crore each and Cabinet approval is required for the waiver of the dues.

CAPACITY

"Both the plants put together will have an installed capacity of two million tonnes and we hope to have them operational by the end of the current five year Plan," he said. The company has five urea manufacturing units located in Nangal, Panipat and Bhatinda.

While Nangal, Panipat and Bhatinda are fuel-oil based, one unit at Vijaipur is on natural gas and the other at the same location has a provision of using natural gas or naphtha.

"The total annual installed capacity of these plants is 32.31 lakh tonnes. And in 2006-07 financial year, the capacity utilisation was at 103.71 per cent," Mr Mangat said. NFL during the current fiscal expects the production to touch 32.87 lakh tonnes.

Feedstock conversion

"We are also in the process of converting the three fuel-based plants to natural gas. The TEFRs have already been conducted and the bids have been issued. At the current estimates, the capital cost of the feedstock conversion of the projects will come to around Rs 635 crore each," he said.

NFL expects 80 per cent of the investment in the form of capital subsidy from the Government, while the rest of the 20 per cent will be generated from internal accruals.

The company recently presented a dividend cheque of Rs 51.58 crore to the Government for 2006-07. The cheque was handed over to Mr Ram Vilas Paswan, Minister of Chemicals, Fertilisers and Steel.

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