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FACT to benefit from A.P., Karnataka offer

KOCHI: Fertilisers and Chemicals Travancore (FACT) stands to gain significantly from the advance against Factamfos supply offer made by Andhra Pradesh and Karnataka governments.

The Karnataka Government has offered to pay Rs. 200 crore in advance to ensure that the State gets 16,000 tonne of Factamfos a month. The Andhra Pradesh Government is considering a similar offer, company sources said here. If the proposals materialise, FACT will overcome the working capital shortage stemming from unwarranted delay in subsidy payment by the Union Fertilizer Ministry.

According to the sources, Factamfos, the sales driver for the company, is sold at Rs. 6,000 plus a tonne as stipulated by the Government. Its actual production cost is Rs. 41,000, about Rs. 35,000 being the subsidy. As the subsidy payments are pending for about three months, the company faces a severe funds shortage for buying ingredients like sulphur and rock phosphate.

Factamfos (20:20:0:13 NPK mixture) is a big hit with farmers in the South, FACT being the traditional supplier to Tamil Nadu, Karnataka and AndhraPradesh besides Kerala. At current levels, the company can produce up to 60,000 tonnes of Factamfos a month and meeting the demands of Andhra Pradesh and Karnataka would not be a major problem, said a company spokesman.

Andhra Pradesh and Karnataka have been facing acute shortage of the fertilizer in the current season. Kerala requires about 15,000 tonnes of Factamfos and the demand in Tamil Nadu and Karnataka is at the similar level.

Besides Factamfos, the company had been meeting the requirement for urea and MoP in the States, the sources said. FACT sold more than Rs. 400 crore worth of Factamfos till June. Sales are expected to be substantially higher for the second half of the current financial year as the demand for the fertilizer was high.

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