The government provided a Rs 1,000 crore package to the state-run fertiliser firm FACT for its revival and expansion of production capacity to one million tonnes during the next fiscal.
The loan assistance of Rs 1,000 crore to the Kochi-based Fertilisers and Chemicals Travancore Ltd (FACT) would help boost fertiliser supply in Kerala and entire South India.
FACT, which is facing liquidity crunch, currently produces about 6 lakh tonnes of NPK fertilisers such as aluminium sulphate with an annual turnover of about Rs 2,000 crore.
An agreement to release Rs 1,000 crore to the FACT for its revival was signed today between the Department of Fertiliser and FACT in the presence of Fertiliser Minister Ananth Kumar.
"Today is the big day for farmers of Kerala and South India. With this Rs 1,000 crore loan assistance to FACT by the government of India, I think the revival of FACT is on," Kumar said at the event.
"Today this Rs 1,000 crore has been released to the FACT," he said, adding that the financial package would help about 2,740 employees (direct-indirect) of FACT and another 30,000 families of dealers as well as lakhs of farmers.
As per the agreement, FACT Chairman and Managing Director Jaiveer Srivastava said the loan amount alongwith interest, has to be rapaid in five years, with a moratorium of one year.
"As on today, FACT's annual production is 6 lakh tonnes.
Within one year, because of this loan assistance, the total production will become one million tonnes of fertilisers," the minister said, adding that the company's turnover would increase to Rs 3,000 crore from the current Rs 2,000 crore.
Stating that the FACT is oldest fertiliser plant in the country, Kumar said the revival of FACT was lingering for last 19 years.
Through this assistance, the minister said, the government not only intends to revive but stabilise FACT as well as increase its production, turnover and reach.
Kumar said the government has big plans for FACT in the coming years and that includes setting up of urea plant with a 1.3 million tonnes of capacity at an estimated cost of over Rs 5,000 crore.
FACT, which has been facing severe financial crunch for more than a decade, has now got a breather in the form of this loan, which will ease its liquidity crisis.
The loan would be used for working capital requirement, clearing its pending dues and maximising capacity utilisation.
Minister of State for Chemicals and Fertilisers Hansraj Gangaram Ahir and Fertiliser secretary A K Bishnoi were also present on the occasion.
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