State-owned Fertilisers and Chemicals Travancore (FACT) is set to resume caprolactam production after a gap of four years, Jaiveer Srivastava, chairman and managing director, said on Thursday.
Caprolactam is produced in FACT using the available intermediate products, namely, Hyam and Anone. Phase 1 start-up of caprolactam has begun and production of other petro-plants associated with it will commence in due course, he added.
Addressing a press conference, Srivastava said that the caprolactam plant has the capacity to produce 50,000 tonne and the revenues from it would help improve the company’s financials and achieve operating profits by the end of this fiscal.Currently, the caprolactam demand in the country is 1,30,000 tonne and the supply gap is met from Chinese imports.
Caprolactam is an intermediate primarily used in the production of nylon 6 fibres, tyre cord, textile fibres and resins. There are also plans to go for value addition in the plant to produce nylon chips, which is in huge demand for textile units. Gujarat State Fertilizer Company is the other company, which produces caprolactam in the country with a production capacity of 70,000 tonne.
FACT could tide over its serious working capital constraints largely through the R1,000 crore loan extended by the Centre and could resume fertilizer production to full capacity with all the eight plants of the company working to full capacity, he said.
The PSU recorded a loss of R452 crore in the last financial year against a loss of nearly R400 crore during 2014-15. Company sources said that the heavy losses were due to high finance charges, low production due to the shortage of working capital, interruption in the production of ammonia and the stoppage of caprolactam production.
Srivastava said that the excellent physical performance is not an indication that FACT has overcome all its
“There are issues to be sorted out regarding the relief package as the loan from the government has to be repaid. Fund has to be mobilised for expansion of capacity which is crucial for long term survival of the company. A new production stream of FACTAMFOS at Cochin Division, with 1,000 tonne per day capacity, is the immediate expansion project of the company which is at an advanced stage of consideration, “ he said.
FACT has benefited from the sharp fall in feedstock LNG prices in the global market. The company had converted to LNG instead of naphtha as feedstock some years back, but the high landed cost of the fuel had lead the company to shut down its plants.