FACT Udyogamandal

George Joseph
Roll No: 17
MBA F T
Fourth Semester

Business Policy & Strategic
Management
Assignment NO: 2


2

CONTENTS
1. Introduction 2
2. Global economic context and agricultural situation5
3. Indian Industry.....7
4. Company profile........12
5. Vision and mission of FACT16
6. Products..21
7. SWOT Analysis.....27











3

INTRODUCTION
Fertilizer is generally defined as "any material, organic or inorganic, natural or synthetic,
which supplies one or more of the chemical elements required for the plant growth.
Chemical fertilizers have played a vital role in the success of India's green revolution and
consequent self-reliance in food-grain production. The increase in fertilizer consumption
has contributed significantly to sustainable production of food grains in the country. The
Government of India has been consistently pursuing policies conducive to increased
availability and consumption of fertilizers in the country.
The Indian Fertilizer industry had a very humble beginning in 1906, when the first
manufacturing unit of Single Super Phosphate (SSP) was set up in Ranipet near Chennai
with an annual capacity of 6000 MT. The Fertilizer & Chemicals Travancore of India
Ltd. (FACT) at Cochin in Kerala and the Fertilizers Corporation of India (FCI) in Sindri
in Bihar were the first large sized -fertilizer plants set up in the forties and fifties with a
view to establish an industrial base to achieve self-sufficiency in food grains.
Subsequently, green revolution in the late sixties gave an impetus to the growth of
fertilizer industry in India. The seventies and eighties then witnessed a significant
addition to the fertilizer production capacity.
Fertilizer is a key ingredient in ensuring the food security of the country by increasing the
production and productivity of the soil. The domestic food grain production target has
been set at 320 million tonnes by 2011-12 from the present production of 210 million
tonnes. This target could be achieved by higher productivity through improved farming
practices, expansion of irrigation, better seeds and extensive and balanced use of
fertilizers. Towards this end, the Department is planning to raise the production of urea
from the present installed capacity of 197 LMT to 300 LMT by the end of 11th Five Year
Plan i.e., 2011-12 by taking concrete steps to boost production and productivity,
removing regional imbalances in production and distribution, securing long term tie-ups
for supply of feedstock and raw material etc.
4

The problem of the industry is the seasonal demand for its product, large working capital
requirements. It is unfortunate that fertilizer industry has been a victim in the recent past
under the controlled piercing subsidy regime of the Government.

















5

GLOBAL ECONOMIC CONTEXT AND AGRICULTURAL
SITUATION
Global Context: The financial and economic downturn drives the outlook. After several
years of extraordinary growth, the world economy is entering a depressed period. The
situation deteriorated quickly during the third quarter of 2008. World GDP growth is seen
as dropping from 5% in 2007 to 3.7% in 2008 and 2.2% in 2009, according to the
International Monetary Fund (IMF).

Prices of oil and non-fuel commodities are declining quickly. Over a few months, crude
oil prices dropped from more than US$ 140 per barrel to US$ 52 in mid-November. The
current financial crisis has also had a strong impact on the US$ exchange rate. The value
of the dollar is growing rapidly vis--vis many other currencies. The present economic
situation impacts world agriculture and fertilizer demand in several ways:
Current fast-changing prices of agricultural commodities and fertilizers make it risky for
farmers to invest in fertilizers. As a consequence, they tend to await an improvement in
the cost-benefit ratio and a more predictable environment before investing in fertilizers.
The cost-benefit ratio is also strongly influenced by the fast-evolving US$ exchange rate.
6

In many countries, it is anticipated that distributors and farmers will experience
difficulties in accessing credit to purchase agricultural inputs, including fertilizers. This is
expected to result in import difficulties and smaller sales. Where there are sufficient
phosphorus and potassium reserves in soils, farmers are likely to rely temporarily on the
reserves and to purchase smaller amounts of these two nutrients. Nitrogen should not be
as greatly affected. If yields are impacted by less intensive farming practices, grain prices
could very well rebound in 2009. With the decline in confidence and purchasing power,
consumers might come back to more basic diets, with more grain vs. meat, fish, fruits
and vegetables. Such a reversal of trend would impact fertilizer demand.
If crude oil prices further contract, the economics of biofuels might be threatened unless
the sector is heavily subsidized or feedstock prices drop proportionally to crude oil
futures.
Weather conditions in 2007/08 have been quite favrable overall, making it possible to
achieve high yields in the main agricultural regions. Conditions during the autumn in the
northern hemisphere have led to satisfactory emergence of winter crops, offering good
prospects for the 2009 harvest. On the policy side, implementation of the new
US Farm Bill has had little impact on the agricultural sector as it mainly represents a
prolongation of the previous agricultural policy. In the EU, the Common Agricultural
Policy is under scrutiny. The abolition of the 10% mandatory set aside is likely to become
permanent. Food security is an outstanding issue for many low income and food-deficit
countries. In order to ensure food security and limit reliance on food imports, many
developing countries are implementing measures to boost agricultural production, restrict
exports or make inputs more affordable.


7

INDIAN INDUSTRY
Fertilizer sector is a very crucial for Indian economy because it provides a very important
input to agriculture. The fertilizer industry in India has played a pivotal role in achieving
self sufficiency in food grains as well as in rapid and sustained agriculture growth.
India is the third largest producer and consumer of fertilizers in the world after China and
the United States. The growth of the Indian fertilizer industry has been largely
determined by the policies pursued by the government. The government exercised
extensive controls on the pricing, distribution and movement of fertilizers. The industry is
capital intensive and the production process energy intensive with the combined cost of
feedstock and fuel accounting for anywhere between 55 and 80 per cent of cost of
production, depending on the type of fertilizers.

DETERMINANTS OF FERTILIZER DEMAND
Rainfall and irrigation facilities:
Adequate and well diversified rainfall gives the farmers confidence to invest in
fertilizers along with well equipped irrigation facilities.
Relative prices of fertilizers:
Indian agriculture is characterized by small holdings and demand for fertilizers tends to
be price sensitive. If there is significant price differentiation between fertilizers,
demand will move in the favour of the cheaper fertilizers, even if its not the most
appropriate one.
Cropping pattern:
This determines the need and timing of fertilizers purchases.

8

Government policy:
Government policies and framework influences pricing, production and distribution of
fertilizers.
RISING DEMAND
There has been significant growth in the consumption of fertilizers in last three years due
to overall good monsoon. The growth in NPK consumption was 9.50% in 2004-05, 10.60
% in 2005-06 and 8.40% per cent in 2006-07. It is expected to grow by at least by eight
per cent during 2007-08 in anticipation of good monsoon. Against the robust growth in
consumption, domestic fertilizer production has remained range bound in the last
decades. Fertilizers output grew by a modest 6.50 per cent during 2006-07. The surge in
fertilizers demand and stagnant to modest increase in production has widened the gap
between consumption and production causing larger dependence on imports. Therefore,
the rising demand for fertilizers is providing ample scope for the companies in this sector
to increase their production capacity and volumes thereby, driving the growth of fertilizer
sector.
Huge CAPEX lined up
The capital expenditure in the fertilizer sector is finding new ways. The total outstanding
investment in the fertilizer sector more than doubled to Rs 20,677 crore during the
September 2007 quarter as compared to the corresponding quarter a year ago. However,
out of 28 projects, only seven are under implementation stage. The reason is most of the
de bottlenecking/ revamp/ modernization projects of the urea companies still awaiting
clearance of the Department of Fertilizers (DoF) to get implemented. Also, change in
policy parameters once in every three years is hampering new investments in the sector.
Once the clearance of projects is done from Department of Fertilizers (DoF) and new
policies get struck than the sector will find new highs in the future. Therefore, the
9

companies in this sector would increase their production through capital expenditure and
would formulate the new growth story of this sector.
Indias production in terms of nutrients (N & P) reached a level of 155 lakh MT in 2005-
06 from 0.39 lakh MT in 1951-52. Similarly, consumption of fertilizers in terms of
nutrients (NPK) has also grown from about 0.66 lakh MT in 1951-52 to nearly 184 lakh
MT in 2004-05. The Indian Fertilizer industry, given its strategic importance in ensuring
self sufficiency of food grain production in the country, has for decades, been under
Government control. The Government has over the years, provided subsidies/concessions
through the fertilizer companies to farmers and the manufacturers have been
compensated through various schemes. Though the Government control helped in
meeting the objective of ensuring creation of capacities and ultimately achieving self-
sufficiency in food grain production, it did not encourage improving efficiencies in the
sector. With the burgeoning subsidy bill and the need to focus on fiscal prudence,
Government polices in recent times are aimed at encouraging efficiencies in the sector.
Policy measures like the new pricing scheme have made the operations of less efficient
players unviable. The Government polices today are oriented towards achieving the
stated objective of total deregulation in the sector. However, the uncertainty over exact
policy parameters and absence of a comprehensive long term policy has not augured well
for the industry. . The uncertain policy environment has also not encouraged any major
investments in domestic capacity. Another important issue confronting the sector is with
respect to the feedstock. Natural gas which is the main feedstock for production of
nitrogenous fertilizers is available in limited quantities and the industry competes with
the power sector for its share. With the Government policy favouring conversion to gas
based units, the demand for gas is only expected to go up in the future, which may in turn
lead to further shortages. Similarly, in the case of phosphates, on account of the limited
availability of phosphoric acid and rock phosphate in the country, domestic units are
dependent to a large extent on imports. In view of the limited availability of the main
feedstock within the country, fertilizer companies today are exploring the possibility of
10

setting up joint ventures abroad to tie up their feedstock requirements. Though a few joint
venture agreements have been signed with respect to supply of phosphoric acid, only a
couple of joint ventures have been established with respect to urea. Domestic players
have also not been able to enter into long term gas supply agreements primarily due to
differences over pricing.











1. Government is contemplating complete decontrol in phased manner
2. Quantitative restrictions on fertilizer imports have been removed since April 1,
2001.
11

3. The implication of present policy environment for fertilizer sector in India is not
promising. There are possibilities that domestic production and consumption of
fertilizers may decline.
4. The policy considerations which are likely to be implemented may result in
making the domestic production of fertilizers unviable.
5. At present there is no demand-supply gap in urea.
6. A switch over in feed stock from naphtha to LNG for urea is envisaged depending
on its availability and price.
7. High energy cost do not permit further expansion in urea capacity within the
country, joint ventures abroad are likely to be developed.
8. For phosphate/potash also, joint ventures abroad are likely to be developed as
there is no potential reserve within the country.












12

COMPANY PROFILE
The FERTILISER AND CHEMICALS TRAVANCORE LIMITED-popularly known as
FACT-was indeed a revolution when it was established as the first large scale fertilizer
factory in the country. Since then, it has played a major role in creating fertilizer
consciousness among our farmers, and giving a positive direction to the modernization of
agriculture in India. And that, of course is an interesting story-a story of never ending
challenges and constructive responses.
The 1940,s were a time of critical food shortage in our country. The traditional approach
to cultivation was not of much help in finding a solution to this problem. And nitrogenous
fertilizer had not yet arrived on the agriculture scene in sufficient quantities to make any
perceptible impact. A revolution was indeed necessary to change the status quo. And
when it came, it did through the vision of Dr. C.P. Ramaswamy Aiyar, the Dewan of the
former Travancore State, who mooted the idea of increasing food production by
application of fertilizer as a long term solution to food problem. To give concrete shape
to his idea, he sought the help of Seshayee Brothers Ltd. Industrialist known for their
pioneering work. And Indias first large-scale fertilizer plant was set up in 1944 at
Udyogamandal on the banks of the river Periyar in Kerala State.
The new venture of course had to go through many teething troubles. For instance, the
raw materials necessary for the production of ammonium salts were not available in the
state. But this deficiency was overcome by adopting a revolutionary method known as the
FIREWOOD GASIFICATION PROCESS. However, initial difficulties notwithstanding,
the plant at Udyogamandal went into commercial production in 1947, with the slated
capacity to manufacture 50,000 tonnes of Ammonium Sulphate (10,000 tonnes of N).
This was followed by the production of SUPERPHOSPHATE in a new plant with a
capacity of 44,000 tonnes. A sulphuric acid plant of 75 tonnes per day was also installed
which was considered large going by the standard at that point of time. Meanwhile the
inner dynamics of FACT was finding another expression in the formation of new unit
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with the help of the State Government and Methur Chemical & Industrial Corporation
Ltd., for the production of caustic soda which later became todays Travancore-Cochin
Chemical Ltd., a Kerala Government undertaking. This indeed was a big leap forward as
it replaced all the imports of that product, saving a considerable amount of foreign
exchange. FACT was the first to use its by-product- chlorine as hydrochloric acid to
produce Ammonium Chloride. The by-products produced by FACT paved the way for
setting up of other industrial units around the FACT complex viz. Hindustan Insecticide
Ltd., Indian Rare Earth Ltd., etc.
In the late 50s, the Udyogamandal Division launched its first expansion with an outlay of
Rs. 3 crores. Highlights of the period were the installation of two plants to produce
Phosphoric Acid and Ammonium Phosphate (16:20 Grade). The second stage of
expansion involving Rs. 2 crores saw the replacement of the Firewood Gasification
Process and the Electrolytic Process by the Texaco Oil Gasification Process for which a
new plant was set up. FACT became a Kerala State Public Sector Enterprise on 15th
August 1960 .On 21st November 1962, the Government of India became the major
shareholder.
The 2nd stage of expansion of FACT was completed in 1962. The 3rd stage of expansion
of FACT was completed in 1965 with setting up of a new Ammonium Sulphate Plant.
FACT has been a pace-setter in marketing evolving a continuous and comprehensive
package of effective communication with farmers and promotional programmes to
increase the fertilizer consciousness among our farmers. In fact, FACT was the first
fertilizer manufacturer in India to introduce the village adoption concept since 1968 to
improve agricultural productivity and enhance the overall socio-economic status of
farmers. FACT has a well organized marking network, capable of distributing over a
million tones of fertilizers.
Technical Divisions
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FACT Engineering and Design Organization (FEDO) was established in 1965 to meet the
emerging need for indigenous capabilities in vital areas of engineering, design and
consultancy for establishing large and modern fertilizer plants. FEDO has since then
diversified into Petrochemicals and other areas also. It offers multifarious services from
project identification and evaluation stage to plant design, procurement project
management, site supervision, commissioning and operating new plants as well as
revamping and modernization of old plants. FEDO received international accreditation
ISO 9001 2004 for quality system standards covering areas of consultancy, design &
engineering services for construction of large fertilizer, petrochemicals, chemicals and
related projects including purchasing, construction, supervisor, inspection and expediting
services.
FACT Engineering Works (FEW) was established on 13
th
April 1966 as a unit to
fabricate and install equipment for fertilizer plants. FACT Engineering works (FEW) was
originally conceived as a unit to fabricate and install equipment for FACTS own plants.
Over the year it developed capabilities in the manufacture of class I pressure vessels, heat
exchangers, rail mounted LPG tank wagons etc. It has a well equipped workshop
approved by Lloyds Register of Shipping.Further; this division has excelled in laying
cross country piping fabrication and installation of large penstocks for hydel units in
Kerala.
The Cochin Division of FACT, the 2
nd
production unit was set up at Ambalamedu and the
1st phase was commissioned in 1973. The 2nd phase of FACT Cochin Division was
commissioned in 1976. The project was designed to produce Ammonia which would be
converted to Urea This division comprises of a number of large capacity plants to
produce Ammonia, Urea, Sulphuric Acid, Phosphoric Acid and Fertilizers like
FACTAMPHOS 20-20 and DAP 18-46.
FACT has also a Research & development department which carries out research related
to fertilizers. This Division is also capable of doing fundamental research in areas of
15

fertilizers and chemicals technology so far FACT R & D has taken 17 patents in areas
like Sodium Fluoride, Sulphuric Acid, Ammonium Phosphate etc.
FACT took a major breakthrough, when its 50,000 TPA plant of Caprolactum was
commissioned in 1990 as a major diversification plan from the traditional field of
fertilizers and allied chemicals. The plant with a cost outlay of Rs. 368 crores utilized the
most modern technology and the product is acknowledged as one of the best in the world.
It also produces 2, 25,000 tonnes per annum of Ammonium Sulphate as co-product.
Presently FACT is in the process of setting up a 900 TPD Ammonia Plant at
Udyogamandal with an investment of Rs 618 crores. This will replace the old Ammonia
Plant of Udyogamandal Division. It is expected to be completed by August 1997.
FACT has been entering into a Memorandum of Understanding with the Ministry of
Chemicals and Fertilizers every year since 1992-93. This is as per the guidelines of DPE,
Ministry of finance GOI. The objective of FACT is to achieve excellence in performance
as per the MOU agreement.













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VISION & MISSION OF FACT
Mission of FACT
To function as a dependable and globally competitive producer of fertilizer and other
allied products and to develop self reliance in the field of engineering and technology,
especially in the field of fertilizers, chemicals, petrochemical, oil & gas industries.
Vision of FACT
To emerge as a leading company in the business of providing quality agriculture and
industrial inputs and providing engineering services for industrial and infrastructural
facilities.
CORPORATE OBJECTIVES
1. To be of service to the nation and to contribute effectively to its economic well
being and growth through the production and marketing of fertilizers and
chemicals and through the acquisitions/development and dissemination of
engineering technology know-how and skills.
2. To sustain and improve its pioneering role in the development of indigenous
engineering and technology through research and development.
3. To improve productivity and maintain high standards of quality and adopt
effective measures for controlling cost and minimizing dependence on imports.
4. To ensure for its customers the availability of its products and services on
reasonable terms, for its shareholders a fair return on capital invested and, for
itself, development of adequate internal resources for continual growth and
expansion.
5. To actively work for rural up liftment through guidance, advice and service to the
farmers in co-operation with all other agencies working for agriculture
development and allied activities.
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6. To develop, train and maintain a team of motivated and disciplined personnel with
required skills and abilities, and to encourage innovation and to create a condition
for their functioning and career development so as to improve their overall
quality of life
7. To project a favorable image of the company and its operations, in the society in
which it operates, amongst its customers and suppliers and amongst the public in
general.
8. To continuously plan its future operations for sustained growth and stability for
meeting the needs of the country.

CORPORATE GOALS
1. To achieve a net profit of 200 crore per year with a turnover of Rs.2100 crore by
the year of 2010
2. To focus on cost reduction and technology up gradation in order to become
competitive in each line of business.
3. To constantly innovate and develop new products and services to satisfy customer
requirements.
4. To invest in new business lines, where profit can be made on sustainable basis
over the long term.
5. To compete through speed, agility and flexibility in recognizing and capturing
opportunities in existing markets.
6. To invest sufficiently to stay in the game but avoid premature commitments.

LEGAL FRAME WORK OF THE COMPANY
FACT is a public limited company registered under the Companies act 1956.As a major
industrial organization, FACT complies with all laws and statutes which governs
industries in general:
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1. Factories Act, 1948
2. Excise Act, 1944
3. Sales tax Act, 1959
4. Industrial Disputes Act, 1947
5. Employee Staff welfare Act, 1948
6. Workmen Compensation Act, 1923
7. The Payment of Gratuity Act, 1972
8. The Payment of Wages Act, 1936
9. Trade Unions Act, 1926
10. Payment of Gratuity Act, 1972

OWNERSHIP PATTERN
The Fertilizers and Chemicals Travancore Ltd (FACT) is a Schedule A category
Government of India enterprise, under the administrative control of department of
fertilizers in the Ministry of Chemicals and Fertilizers. FACT was incorporated in
22/09/1943 and in the1960s the Government of India became the major shareholder.
Board of Directors manage the Organization. The chairman of the Board of Directors is
the Managing Director. FACT has a full time Finance Director, a Technical Director and
a Marketing Director. There are also six part time Directors on the Board, nominees of
Central and State Government.
Shares of the company are listed at National stock exchange of India (N.S.E)






19

PERFORMANCE OF SHARES AT NSE

Month High (Rs) Low (Rs)
April 24.00 20.40
May 27.25 22.00
June 24.40 22.40
July 26.80 22.90
August 26.95 21.75
September 29.90 24.40
October 29.65 23.75
November 48.30 26.00
December 46.90 40.40
January 57.86 31.55
February 41.40 30.00
March 37.80 21.80
Source: Annual Report 2007-08 Table-1








20

BRIEF PICTURE OF FACT

Name
Fertilizers And Chemicals Travancore Ltd
(FACT)
Slogan Pioneers in progress
Established in the year 1944
Location Udyogamandal, Cochin, Kerala
Promoters Government of India
Production units
Fertilizers

Udyogamandal & Ambalamedu
Caprolactum Udyogamandal
Fabrication
Division ,FEW
Palluruthy, cochin
Consultancy Division, FEDO Udyogamandal
Marketing Division
Head office

Udyogamandal
Area offices Trivandrum,Chennai, Bangalore and
Hydrabad
Liaison Offices Trivandrum, Chennai, Mumbai, New Delhi
Marketing Territory South India: Kerala, TamilNadu,
Karnataka, Andhra Pradesh
Table-3






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PRODUCTS & PRODUCT MIX
PRODUCTS
I. Finished products
Ammonium Sulphate - Udyogamandal Division
Ammonium Phosphate / Complex fertilizers / Factamphos - Udyogamandal Division &
Cochin Division
Caprolactum - Petrochemical Division
Biofertilizers - Research & Development Division
II. Exported Products
Caprolactum - Petrochemical Division
Ammonium Sulphate - Udyogamandal Division
III. Byproducts
Nitric Acid & Soda Ash - Petrochemical Division
Gypsum - Udyogamandal Division & Cochin Division
Carbon Dioxide Gas - Udyogamandal
IV. Intermediary Products
Ammonia - Udyogamandal & Cochin Division
Synthesis Gas - Udyogamandal Division
Sulphuric Acid - Udyogamandal & Cochin Division
Oleum - Udyogamandal Division
SO
2
Gas - Udyogamandal Division
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Phosphoric Acid - Udyogamandal & Cochin Division
PRODUCTMIX
Straight Fertilizers
Ammonium Sulphate - Containing 20.6% N in Ammonical form and 24% sulphur, an
important secondary nutrient.
Ultraphos - FACT markets imported Rock Phosphate containing 32% P2O5 under the
brand name -Ultraphos This high analysis fertilizer is found suitable for application
especially in Coconut/ Rubber/ Oil Plam/ Tea Plantation.
I. Complex Fertilizers
Factamphos 20:20:0:15 - NPK complex fertilizer - Factamphos or Ammonium Phosphate
contains 20% N in ammonical form, 20% P in water soluble form and 15% sulphur; a
secondary plant nutrient, which is now attaining great importance in agriculture.
Factamphos also can be used for foliar spraying.
II. NPK Mixtures
NPK Mixtures - FACT prepares crop specific standard mixtures for all crops in Kerala
and also special NPK mixtures for plantation crops like Tea, Coffee, Cardamom, Rubber
etc.
Rose Mixture - A fertilizer tonic for Roses, Vegetable Mixture - A special blend
exclusively prepared for vegetable., Garden Mixture-A special nutrient combination for
both flowering and foliage ornamental plants.
Imported/ Traded products - FACT has entered into direct import of MOP and also
trading of Imported Urea.
Bio fertilizer - FACT produces and markets 'N' fixing Bio fertilizers - Rhizobium,
Azospirillium and 'P' solubilising bio fertilizer - Phosphobactor.
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Competitors of FACT
Some of the competitors are:
SPIC-Southern Petrol Industrial Chemicals (Products-Urea, Di-Ammonium Phosphate
and intermediaries)
MFL- Madras Fertilizer Ltd. (products-NPK 17:17:17 and variants Vijay urea,
Biofertilizers, Agro Chemicals).
NFL -Nagarjuna Fertilizer Ltd. (Products-Urea)
MFL -Manglore Fertilizer Ltd. (Products-Urea, Complex Fertilizers)
RCF- Rashtria Chemicals Fertilizers Ltd. (Products-Urea, Di-ammonium phosphate,
MOP, Complex fertilizers)
IFFCO- Indian Farmers Fertilizer Co-operative. (Products-Urea, Ammonium phosphate
and complex fertilizer).








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DIVISIONS OF FACT
I. Udyogamandal Division
FACT commenced operation at Udyogamandal with the commissioning of a 50,000
tonnes per annum Ammonium Sulphate Plant in 1947.
In the decades that followed multi stage expansion programs were undertaken bringing in
the latest technologies of the day which were quickly mastered and successfully
implemented. Today the division is a mix of 40 year old small capacity plants and 12
year old state of the art technology plants.
The latest addition to this unit was a 900 tonnes per day Ammonia Complex set up with
an investment of Rs. 642 crores. FACT Udyogamandal division is certified to ISO 14001,
the environmental system standard.
II. Cochin Division
FACT Cochin Division was set up in the 1970's at Ambalamedu 30 km from
Udyogamandal and adjacent to the Cochin Refineries. Phase-I of the division saw the
setting up of an integrated Ammonia urea complex utilizing Indian Engineering skills. A
large scale complex fertilizer plant of 485,000 TPA was set up as phase-II Sulphuric acid
and phosphoric acid plant of economy scale were also set up.
III. Petrochemical Division
FACT diversified into petrochemicals in 1990 with the production of Caprolactum. This
versatile petrochemical product is the raw material for the manufacture of nylone-6,
which finds extensive application in textiles, tyre cord and engineering products. Thanks
to its high quality the products have been acknowledge as among the best in the world.
The division is located adjacent to the Udyogamandal division. Co-product Ammonium
Sulphate is transferred for processing to the fertilizer plant of Udyogamandal division.


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FACT Engineering & Design Organization (FEDO)
FACT Engineering & Design Organization (FEDO) was established in 1965 for utilizing
the considerable indigenous plant building expertise accumulated by FACT in its process
of nurturing the nascent chemical fertilizer industry.
FEDO is today one of India's premier project engineering organization, catering to a wide
spectrum of industries like petrochemicals, refining, pharmaceuticals, hydrometallurgy
etc as well as petroleum storage, environmental engineering, offsite facilities etc.
The division undertakes project execution on consultancy and turnkey basis, handling the
intricacies of the technology sourcing, design and engineering, hardware procurement
and construction with practical ease. FEDO is certified to ISO 9001:2004 system
standard.
FACT Engineering Works (FEW)
Established in 1966, FACT Engineering Works was originally conceived as a unit to
fabricate and erect equipment for fertilizer plants. Over the years, it developed
capabilities in the manufacture of Class I Pressure Vessels, Heat Exchangers, Columns,
Towers etc. required for the fertilizer, petrochemical and petroleum industries. FEW
received ISO 9002 Certification in 1998







26

MILESTONES OF F.A.C.T



















Table-4





22/09/1943 Incorporation
26/06/1947 Production started
1959-60 UD-1
st
stage expansion completed
15/08/1960 FACT came under public sector
21/11/1962 Govt. of India became major shareholder
1962 UD-2
nd
stage expansion completed
24/07/1965 FACT Engineering & Design Organization
13/04/1966 FACT Engineering works
07/06/1966 CD-Phase I License issued
15/10/1966 UD 3
rd
stage expansion completed
01/10/1971 UD 4
th
stage expansion completed
27/04/1973 CD I, Urea plant commissioned
01/10/1973 UD 4
th
stage 150 TPD Ammonium phosphate
10/11/1976 CD-II, Sulphuric acid plant commissioned
10/12/1976 CD-II, Phosphoric acid plant commissioned
10/01/1977 CD-II, NPK trial run started
01/04/1979 CD-II NPK Commercialized
1981 450 TPD Sulphuric acid plant modified to DCDA process
18/05/1984 PD-Caprolactum technical collaboration agreement
14/09/1984 PD-Zero date of ASCL project
06/08/1985 PD-Caprolactum license issued
09/11/1988 SO2 Acid plant Commissioned
26/07/1989 Award for excellence in performance
13/12/1989 FEW shifted to Palluruthy
21/09/1990 Oleum production commenced
20/12/1990 CD-12 MW captive power plant
01/03/1991 PD-Caprolactum commercial production started
01/03/1991 UD-New Ammonium Sulphate Commercial production started
25/09/1993 Foundation stone-900 TPD Ammonia plant
22/03/1998 900 TPD Ammonia plant commercial production started
03/11/1998-09/11/1998 900 TPD Ammonia plant guarantee test run





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SWOT ANALYSIS
STRENGTH
1. High capacity utilization.
2. High quality products. FACTAMPHOS is a premium product in complex fertilizer
containing sulphur.
3. Sustain operating parameters of the plant at good level and productivity of plant at
good level.
4. Well-qualified and technically skilled manpower.
5. Very large asset base.
6. Good support with farmers/end segment.
7. One of the producers of Caprolactum in India is of world-class quality.
8. ISO Certification to most of the divisions.
9. Strong dealer network in South India.
10. Good engineering and consultancy design, perhaps one among the best in Indian
Fertilizer segment.
11. FEDO has own process know-how for hydrogen, Sulphuric Acid, Ammonium
Sulphate, DAP and complex fertilizers
12. FEDO has worked in association with many international process licenses, and has
acquired the capacity of customizing and designing projects to the requirements of
the Indian consumers.
13. FEDO is an approved center of surveyors and audit for portliness, installation,
non-destructive testing energy audits, ISO audits and so on.
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WEAKNESS
1. The government controls the prices of finished goods, but the prices of raw
materials are uncontrolled. So it is forced to operate in an uneconomic situation.
2. The average age of employee is very high. The number of younger professionals is
decreasing and some managerial personals are force to handle more than one
position due to freeze on recruitment.
3. The company doesnt have any significant market reach outside Kerala state
compared to competitors.
4. Lack of product line diversification.
5. Lack of working capital resources.
6. Several unskilled jobs, which could be sub contracted are undertaken by the
permanent employees at high cost.
OPPORTUNITIES
1. Alternatives less expensive sources of energy and other inputs.
2. Acquiring technology to utilize possible input resources.
3. Expanding production capacity to drive benefits of scale.
4. FACT ammonium Sulphate has greater demand in foreign countries.
5. Opportunities for product diversification.
THREATS
1. Unfavorable Government of India policy.
2. Diminishing market for Caprolactum.
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3. Infiltration of more fertilizer products to the southern markets from other
producers.
4. Inherent bottlenecks in infrastructure facilities.
5. Lack of product differentiation.
6. Severe liquidity crunch leading to non-operation plant at higher capacity.