Buoyed by demand during the just-concluded kharif, Kochi-based fertiliser major FACT hopes to make a rich harvest of the upcoming rabi season as well, since the bountiful South West monsoon and the Covid-19 situation have combined to boost fertilizer sales.

The public sector manufacturer has notched up an all-time record sale of 6.53 lakh tonnes in the first half of 2020, compared to 4.86 lakh tonnes during the corresponding period of the previous year, a growth of 134 per cent. “Given this encouraging trend, we expect production to maintain at the same level of 5.5 lakh tonnes, and sales to turn good in the current fiscal,” Kishor Rungta, Chairman and Managing Director, told BusinessLine .

Besides its flagship products of ammonium sulphate and complex fertilizer NPS, the company that caters mainly to the southern markets, has imported 57,000 tonnes of MoP from Russia and 27,000 tonnes of complex fertilizer, thanks to healthy demand.

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Steps have already been taken for a pan-India presence by expanding its reach to West Bengal, Odisha, and Maharasthra by taking to more coastal shipping. “We are planning an additional five lakh tonnes production capacity from the current 10 lakh tonnes to make our presence felt in these markets,” he said.

FACT is in the midst of a ₹700-crore expansion to add another five lakh tonnes capacity. Despite floating tenders, no foreign firms or their representatives could visit the production facility in Kochi due to lockdown restrictions. “We have initiated steps for refloating the tender,” he said, adding that the company in the last fiscal has netted a profit of ₹976 crore on a turnover ₹2,750 crore.

According to him, raw material prices in international markets are slightly up since October 6. It was down due to coronoavirus. “The company is trying to maintain prices at the current level. If it goes beyond a certain limit, we will be forced to hike the price, depending on the demand and supply situation in the domestic market,” the CMD said.

FACT, which operates on RLNG as feedstock, has insulated itself from the price volatility of natural gas in the market. It has tied up with oil companies for one year of gas supply at negotiated prices. So, any price fluctuation in the natural gas market will not have any impact on the company, he said.

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However, the delay in getting approval for manpower recruitment is affecting the petrochemicals division. The commencement of the caprolactam plant would bring another ₹500 crore into the company’s kitty. There is no need for further investment and the company is only re-starting the plant. The trial runs are over and the plant is ready for operations. “This is an Atma Nirbhar Bharat initiative to stop the country’s dependence on imports of caprolactam,” Rungta said.

The Kerala government has assured a refund of ₹152 crore KVAT on gas, which has been outstanding for the last two years. This will further ease the company’s working capital constraints, he said.

Rungta, who is also the chairman of the Fertilisers Association of India-Southern region, said that the delay in getting subsidies from the government is the main concern of all fertilizer companies. The dues are to the extent of ₹40,000 crore.

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