THE MINISTER OF STATE IN THE MINISTRY OF CHEMICALS & FERTILIZERS (SHRI RAMESH BAIS)
(a) to (e) There are nine Fertilizer Public Sector Undertakings under the
administrative control of this Department, namely:
- Fertilizer Corporation Limited(FCI)
- Hindustan Fertilizer Corporation Limited(HFC)
- Paradeep Phosphates Ltd.(PPL)
- Madras Fertilizers Ltd.(MFL)
- Pyrites Phosphates & Chemicals Limited(PPCL)
- Fertilizers And Chemicals Travancore Limited(FACT)
- Projects & Development India Limited(PDIL)
- National Fertilizers Limited(NFL)
- Rashtriya Chemicals Limited(RCF)
Of the above, FCI, HFC, PDIL & PPCL have been declared sick by the Board for
Industrial and Financial Reconstruction(BIFR). The rehabilitation/restructuring
proposals of FCI, HFC and PPCL based on their unitwise techno-economic viability
are to be submitted to the competent authority in the Government and thereafter for
sanction of BIFR, keeping in view the Government’s declared policy towards Public
Sector, which is to restructure and revive potentially viable PSUs, close down PSUs
which cannot be revived, while fully protecting the interest of workers.
As regards PDIL, during the course of the review of the rehabilitation scheme
by BIFR approved in July’ 1997, BIFR has directed that a revised rehabilitation
scheme for PDIL be submitted to the competent authority in the Government and
thereafter for sanction of BIFR.
The location of the plants, profit earned/loss suffered and the reasons of
sickness of the fertiliser PSUs are given below:
(Rs./ Crore )
Profit / (loss)
Name of the PSU 1997-98 1998-99 1999-2000 Main reasons for Losses
FCI (735.69) (838.29) (813.84) Technological, design and equipment deficiencies, frequent
Ramagundam equipment breakdowns,
(A.P.), increase in the cost of liquid
Talchar(Orissa), petroleum products, power
Gorakhpur (U.P) & shortages, industrial relations
Sindri(Bihar) problems, and surplus manpower and resource constraints.
HFC (647.83) (514.49) (580.71) Technological, design and equipment deficiencies, frequent
Durgapur & Haldia equipment breakdowns,
Fertilizer increase in the cost of liquid
Project(W.B.), petroleum products, power
Barauni(Bihar) & shortages, industrial relations
Namrup (Assam) problems, and surplus manpower and resource constraints.
PPL (105.53) (57.95) (89.14) Depreciation of rupee leading to higher cost of inputs, heavy
Paradeep(Orissa) interest burden, inadequate working capital due to continuous cash losses, delay in disbursement of concession, low capacity utilisation of acid plants leading to higher imports of phosphoric acid, and inventory carrying cost on heavy build up of stocks.
MFL (55.35) (25.74) (24.98) Lower production due to extended shutdown of plants for
Manali(Chennai) revamp hook-up & longer period of stabilisation, under recovery in respect of complex fertilizer due to increase in prices of inputs and depreciation of the Rupee, reduction in adhoc concession on DAP and Complex fertilizers, delay in disbursement of ad- hoc concession.
PPCL (53.40) (87.49) (70.18) Decontrol of SSP and delays in disbursement of concession,
Dehradun(UP), withdrawal of the imports
Amjhore(Bihar) substitution incentives, intrinsic
And cost disadvantage of pyrites
Salidapura based sulphuric acid production,
(Rajasthan) increase in operating costs of pyrites mining at Amjhore, rising costs of deep underground mining at Mussoorie and increased transportation costs.
FACT 53.94 (48.26) (39.80) Interest burden on loans used for capital investment in the
Udyogamandal Ammonia Replacement Project,
(Kerala) unremunerative prices of complex / mix fertilizers, increase in cost of petroleum products.
PDIL 6.09 (15.85) (17.71) Low level of orders for catalysts and lack of job orders as the
Catalyst Unit, R&D new projects envisaged at the
Division, Sindri time of formulation of the revival
(Bihar), package got delayed.
Engineering &
Consultancy
Division, Noida
(Delhi), Baroda
(Gujarat).
NFL 189.01 41.5 34.89 It is a profit making company.
Nangal &
Bhatinda(Pb),
Panipat(Haryana) &
Vijaypur(MP)
RCF 189.37 105.64 35.08 It is a profit making company.
Trombay(Bombay,
Maharasthra),
Thal(Maharashtra)
(f) & (g) : Based on the recommendations of the Disinvestment Commission,
Government have decided to disinvest 51% of its equity in NFL out of its current
holding of 97.65% and 32.74% of its equity in MFL out of its current 58.74 % holding, through sale to a strategic buyer alongwith transfer of management control. In case
of both these companies, the process of selection of Global Advisor/ Merchant
Banker has been completed. Out of the other four fertilizer public sector companies,
namely, FACT, PPCL, PPL and RCF, which have been identified for disinvestment,
the decision in the case of FACT and RCF has been deferred, whereas in the case
of PPCL and PPL, the process is at an initial stage.
