Letter to Union Minister of Chemicals and Fertilizers

Dear Sri. Ananth Kumarji,

Fertilizers and Chemicals Travancore Ltd (FACT), Udyogamandal, a pioneer fertilizer and chemical industry in Kerala,was operating profitably till 1999, but slipped into loss on account of usage of costly Naphtha as feedstock and also for want of adequate technology upgradation and diversification. Currently this major industry in Kerala is surviving with a temporary relief of Rs.1000 crores sanctioned by the Department of Fertilizers, Government of India to maintain its operations. Over the years, the turnover and employment potential of the company declined drastically.

India is importing close to 90 Lakh Tonnes of Urea every year from China and the Arabian Gulf countries.In 2010 , on account of massive increase in the import of urea , the Government of India decided to modernize and reopen most of the closed down Urea plants with the support of cash rich Central Public Sector Undertakings.FACT Ltd was not included in this revival scheme.

Urea is available in our market at a lower price than the indigenous one as the other countries have started producing urea from natural gas. FACTs 3.3 lakh TPY Urea plant at Ambalamedu based on Naptha was closed down in 2002 due to lack of financial viability. The long term revival and sustainability of the operations of FACT Ltd depends on construction of a world class Urea plant having a capacity of 12 lakh tonnes per year at Ambalamedu , Kochi using natural gas as feed stock. Now that the Kochi LNG Terminal has become operative, natural gas is readily available at the site. The vast infrastructure and utilities catering to the old plant are available in good order at Ambalamedu.

In view of the above the main ammonia and urea plants alone need to be built with the support of the above infrastructure for which the order of magnitude of investment would be around Rs.4000 Crores. It is suggested that the Government of India may take an immediate initiative to put up Urea plant as stated above. This diversification scheme may please be taken up as a joint sector initiative as in the case of other Urea Plants by bringing in profit making Central PSUs, particularly in the Petroleum/Natural Gas sector, as stakeholders like GAIL/ONGC.

With warm regards
Yours sincerely,

PINARAYI VIJAYAN

Shri. Ananth Kumar
Minister of Chemicals & Fertilizers
Government of India
315-A, SB A-wing, 3rd floor,
Shastri Bhawan,
New Delhi-110001