The public sector Fertilizers and Chemicals Travancore expects to ride out a steep rise in the price of raw materials as well as feedstock natural gas and remain in profit during the current financial year.
The price spiral has largely been triggered by COVID-19 pandemic but “FACT does not want to pass on the entire burden of the price-rise to the farmers,” said chairman and managing director Kishor Rungta on Monday.
At the same time, the public sector company is optimistic about a good performance during the current year, having emerged with flying colours during the last three financial years.
FACT recorded an operational surplus of ₹352 crore during 2020-21, a record achievement by the company. It also notched up a total business turnover of ₹3,259 crore during the year against ₹2,770 crore in the previous year.
The second wave of COVID 19 did not prevent the company from achieving a profit of ₹136 crore during the third quarter of 2020-21. Mr. Rungta said FACT’s was ‘outstanding performance’ for the year 2020-21, creating new records in production and sales of Factamfos (complex fertilizer) and ammonium sulphate and showing excellent results in the financial performance.
The entire FACT team is enthused by the results but the price of some of raw materials had even tripled while most had doubled. The price of natural gas, which was being drawn at $6 last year has also seen a steep rise.
The price has doubled now but “we are unable to say at what price we will get the fuel; we are still negotiating,” he added. The key raw materials imported directly by FACT include ammonia, sulphuric acid, phosphoric acid, sulphur and rock phosphate. The gas supplier is Petronet LNG.
FACT’s fortunes have been looking up and one of the reasons is the buoyant stock market, which has seen the company's share price reaching around ₹140. The CMD said that with the share prices going up, FACT's market capitalization too had risen significantly.
Mr. Rungta said that the State government had refunded ₹40 crore against K-VAT on LNG drawn during 2017-18 and it had reacted positively to FACT appeal for release of more money from the pending K-VAT refund.
Meanwhile, secretary general of FACT Workers’ Organisation George Thomas T. has appealed to the government to ease the K-VAT burden on the company in view of the fuel price-rise.
