PROFILE OF THE FERTILIZER AND CHEMICAL INDUSTRY India is the second biggest consumer of fertilizer in the world next

only to China. The Indian fertilizer industry provides a vital input for agriculture sector; it ensures self reliance in food grain product and food security of nation. Growth and development of fertilizer industry is playing an important role in the growth of the economy as a whole. However, the total availability was short of demand and was met through imports. Of total fertiliser production, urea output increased to 23.3 million tonnes in FY12-13 from 21.8 million tonnes in FY11-12 due to better capacity utilization. While production of di-ammonium phosphate (DAP) may touch 4.3 million tonne from 3.6 million tonnes this year, output of NPK (nitrogen, phosphate and potassium) could rise to 10 million tonnes from 9.2 million tonnes in the current period.

The entire requirement of around five million tonnes of potash fertilisers would be met through imports as India does not have commercially viable sources of potash. With a view to make the nation self-sufficient in urea fertiliser, the Fertiliser Ministry has moved a proposal to boost investment in the sector. The fertilizer subsidy bill for FY 2012-13 is expected to increase by Rs 10,000 crore in respect of the budgeted estimates. In current financial year FY 2012-13 the subsidy bill would reach to Rs 70,974 crore while it was estimated as Rs 60,974 crore in the budget. The government planned to contain subsidy within 2% of the GDP in FY 2012-13 but due to international conditions like depreciating Rupee and oil prices subsidies rose to 2.6 % of GDP. The Kelkar Committee has proposed certain initiatives to whittle down subsidies to 2 per cent in FY 2013-14 and 1.8 % in FY 2014-15.

INTERNATIONAL SCENARIO When there are large areas of unused frontier land in the world it was often more economical for farmers to move on to new uncultivated land than to invest additional money in fertilizers. This practice continued till the 2nd half of the 20th century in some under developed areas of the world. The use of manure and compost is probably as old as agriculture itself and many other materials such as ground bones, wood ash from burning the fallen trees, dried blood and fish were employed long before the chemistry of soil and crops was understood. The disappearance of frontiers combined with improvements in the technology of fertilizers manufacture and more effective transportation led to a growing role of fertilizers for producing the needed fiber. Worlds leading producers are China, India, Russia, US, Canada and France. The fertilizer industry in US is organized into separate segments for producing and marketing products. Industry in the European Union is governed by a wide number of manufacturing regulations. All fertilizer manufacturers in European Union strive to minimize the environmental impact of their manufacturing processes, both by improving the efficiency of those processes and by abating emissions. NATIONAL SCENARIO India is primarily an agriculture based economy. The agricultural sector and its other associated spheres provide employment to a large section of the country's population and contribute about 25% to the GDP. National Scenario The Indian Fertilizer companies produced around 37.6 million tonnes of fertilizer in the year 2012-13 with a 9% rise in comparison to 34.6 million tonnes of last year ( 2011-12 ) production.

Agriculture productivity is dependent upon various factors like soil properties, climate conditions, irrigation facilities, seed quality and variety, cropping pattern, techniques of farming, prevention from pests etc, but more importantly usage of optimum primary ,secondary and micro nutrients. Thus, the role of Government becomes more significant in making available all types of nutrient at affordable prices to farmers at appropriate time. The Indian Fertilizer Industry is one of the allied sectors of the agricultural sphere. India has emerged as the third largest producer of nitrogenous fertilizers. The adoption of back to back Five Year plans has paved the way for self sufficiency in the production of food grains. In fact production has gone up to an extent that there is scope for the export of food grains. This surplus has been facilitated by the use of chemical fertilizers. The large scale use of chemical fertilizers has been instrumental in bringing about the green revolution in India. The fertilizer industry in India began its journey way back in 1906. During this period the first Single Super Phosphate (SSP) factory was established in Ranipet in Chennai. It had a capacity of producing 6000 MT annually. In the pre and post independence era a couple of large scale fertilizer units were established namely the Fertilizer Corporation of India in Sindri, Bihar and the Fertilizer & Chemicals Travancore of India Ltd in Cochin, Kerala. The Indian government has devised policies conducive to the manufacture and consumption of fertilizers. Numerous committees have been formed by the Indian government to formulate and determine fertilizer policies. The dramatic development of the fertilizer industry and the rise in its production capacity has largely been attributed to the favourable policies. This has resulted in large scale investments in all three sectors viz. public, private and co-operative.

At present there are 57 large scale fertilizer units. These manufacture an extensive range of phosphoric, nitrogenous and complex fertilizers. 29 of these 57 units are engaged in the manufacturing of urea, while 13 of them produce Calcium Ammonium Nitrate and Ammonium Sulphate. The remaining 20 fertilizer plants manufacture complex fertilizers and DAP. There are also a number of medium and small scale industries in operation, about 72 of them. Fertilizer and chemical industries in India are undergoing major transformations and these industries are gradually being decontrolled. Administered pricing is also being replaced by market determined pricing. Besides recession and consequent decline in the prices of certain inputs and finished products in the international market has made its domestic products costly and un-competitive. Fertilizer production in India has been growing at an accelerating rate from the very low levels. Currently India produces various kinds of nitrogenous fertilizers (urea and ammonia), straight phosphate fertilizer (single super phosphate) and complex fertilizers like di-ammonium phosphate. STATE SCENARIO Kerala has high degree of land use and cropping intensity. The states agricultural productivity is decreasing year by year. The production and cultivation of rice is decreasing as the farmers more attached to commercial crops like rubber and coconut. Due to the decrease in the cultivation of rice the consumption of nitrate and potash has come down. The per hectare consumption of fertilizers in different states in India, the position of Kerala is as one of the low ranking states.

PRESENT SCENARIO Indian agriculture has witnessed a low rate of growth of around 1.5% in the recent years. Low and unbalanced use of fertilizer could be major reason for this. Adoption of new improved technology and utilisation of alternative cheaper source of stock coupled with educational awareness can help the farmers to use the fertilizers in correct manner. In India only about 76% of farmers are currently using fertilizers during the kharif season and 54% of the farmers using it in rabi season. Therefore special efforts are needed for bringing the rest of the farmers to use fertilizers and thereby increase in the consumption of fertilizers Fertilizer industry in India is undergoing a major transformation .this industry is gradually being decontrolled in the backdrop of liberalized policy and globalization .fertilizer industry in India at present is at crossroads. The spiralling prices of hydrocarbon and non-availability of required products and decreasing prices of finished goods like sulphur are the main problem being faced by this industry in India and this industry mainly depends on imported raw materials like rock phosphate, sulphur and intermediate products like phosphoric acid for production of complex fertilizers. This over dependence of feed stock is another major issue confronting this industry. In short, adverse climate conditions, continuous increase in the input cost, unremunerative selling prices has seriously affected the operations of the fertilizer plant in all over the country. For the development of fertilizer industry in India, Indian fertilizer industry has to adjust with global environment where reductions, energy efficiency, economies of cost are crucial. To meet these challenges, Indian fertilizer industry has to evolve clear-cut strategies.

COMPANY PROFILE FACT a Government of India Enterprise has business interests in manufacturing and marketing of fertilizers, caprolactam, engineering consultancy and fabrication of equipments. Units of FACT include the two manufacturing divisions Udyogamandal Complex-UC and Cochin Division-CD, the

consultancy unit FACT Engineering and Design Organization-FEDO, the fabrication division FACT Engineering Works-FEW and the Marketing Division. The Company has also interests in petrochemicals,

hydrometallurgy,chemicals and pharmaceuticals. INDUSTRY STRUCTURE AND DEVELOPMENT FACT, India's first large scale fertiliser unit was set up in 1943. In 1947, FACT Udyogamandal started production of Ammonium Sulphate with an installed capacity of 10,000 MT Nitrogen. FACT became a Kerala State Public Sector Enterprise on 15th August 1960 and 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 Engineering and Design Organisation was set up on 24th July 1965 to meet the emerging need for indigenous capabilities in vital areas of Engineering, Design and Consultancy for establishing large and modern fertiliser plants. FEDO has since then diversified into Chemicals,

Petrochemicals, Hydrometallurgy, Pharmaceutical and other areas. FEDO offers services from project identification and evaluation stage to plant design, procurement, project management, site supervision and commissioning of new

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FACT Engineering Works was established on 13th April 1966 as a unit to fabricate and install equipments for fertiliser plants. Over the years FEW developed capabilities in the fabrication of pressure vessels and heat exchangers. FEW has also undertaken laying of cross country piping and fabrication and installation of large penstocks of hydel projects.

The Cochin Division of FACT, the 2nd 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.

As a diversification plans from the traditional field of Fertilisers and Chemicals, 50000 TPA Caprolactam Plant at Udyogamandal was commissioned in 1990.

FACT set up 900 TPD Ammonia Plant at Udyogamandal at a cost of 638 Crores following an order of the High Court of Kerala in February 1994 on a Public Interest Litigation, to decommission the existing imported Ammonia storage and handling facility at Willington Island (Cochin Port). The Ammonia plant was commissioned in 1998.

The company's main business is manufacture and marketing of (a) Fertilisers (b) Caprolactam and Engineering Consultancy and Fabrication of Equipment. The Second World War which cut of traditional sources of imports of food grains aggravated our problem and the famine conditions that prevailed. For this the production of fertilizers was found to be an ultimate solution. It was then that a daring and farsighted administrator of Travancore (Kerala) Dr. C.P. Ramaswamy Iyer had overcome the obstacle and paved the way for setting

up a chemical fertilizer factory, FACT (Fertilizer And Chemical Travancore Ltd.) in 1943. It was then the first large scale fertiliser factory in the entire country. VISION & MISSION OF FACT 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.

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

CORPORATE OBJECTIVES 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. To sustain and improve its pioneering role in the development of indigenous anddevelopment. engineering and technology through research

 To improve productivity and maintain high standards of quality and adopt effective measures for controlling cost and minimizing dependence onimports. 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. To actively work for rural uplift through guidance, advice and service to the farmers in co-operation with all other agencies working for agriculture development and allied activities. 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. To project a favourable 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. To continuously plan its future operations for sustained growth and stability for meeting the needs of the country.

CORPORATE GOALS To focus on cost reduction and technology up gradation in order to become competitive in each line of business. To constantly innovate and develop new products and services to satisfy customer requirements. To invest in new business lines, where profit can be made on sustainable basis over the long term. To ensure corporate growth by expansion and diversification To care for the community around

MILESTONES 22-09-1943 - Incorporation 26-06-1947 - Production started 15-08-1960 - FACT came under Public Sector 21-11-1962 - Govt. of India major share holder 1959-1960 - UD 1st stage expansion completed 1962 - UD 2nd stage expansion completed

16-03-1964 - ICMA Award for utilizing byproduct gypsum 15-10-1966 - UD 3rd stage expansion completed 1971 - ICMA Award for technology transfer

01-10-1971 - UD 4th stage Ammonia Plant 01-10-1973 - UD 4th stage 150TPD Ammonium Phosphate 24-07-1965 - FACT Engineering and Design Organisation 13-04-1966 - FACT Engineering Works 07-06-1966 - CD Phase-I License issued 27-04-1973 - CD I Urea Plant commissioned 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 01-04-1976 - CD II NPK commercial production started 18-05-1984 - PD Caprolactam technical collaboration agreement 14-09-1984 - PD Zero date of ASCL Project

06-08-1985 - PD Caprolactam License issued 13-12-1989 - FEW shifted to Palluruthy

26-07-1989 - Award for excellence in performance 1986/7 from the Prime Minister of In 20-12-1990 - CD-12MW Captive Power Plant 01-03-1991 - PD Caprolactam commercial production started 01-03-1991 - UD New Ammonium Sulphate commercial production started 25-09-1993 - Foundation stone - 900 TPD Ammonia Plant 23-03-1998 - 900 TPD Ammonia plant commercial production started

DIVISIONS OF F.A.C.T 1.MANUFACTURING DIVISION Udyogamandal Division FACT commenced operation at Udyogamandal with the commissioning of 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 40 year old small capacity plants and 10 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 618 crores. FACT Udyogamandal division is certified to ISO 14001, the environmental system standards.

 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. 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 product has been acknowledged as among the best in the world. The division is located adjacent to the Udyogamandal division. Co-product Ammonium Sulphate is transferred to the fertilizer plant of Udyogamandal division for processing. 2.MARKETING DIVISION FACT Engineering & Design Organization (FEDO) FACT Engineering & Design Organization (FEDO) was established in 1965for 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

petroleumstorage, 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 practiced ease. FEDO is ISO9001 certified. 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 9002Certification in 1998.

SUB DIVISIONS 1.RESEARCH AND DEVELOPMENTS FACT has a well occupied laboratory for research bodies by a team of highly motivated research personnel. 2.COMPUTER SERVICE CENTRE(CSC) FACT was amongst the companies to install computers as early as in the 60s.in order to meet the gowing needs for management information ,for engineering and commercial application,multi system computer service centre is constantly updating its hardware and software resources . The online intergrated information system that links all the functional areas of the entrprise had been jointly developed and independent by M/S Tata Consultancy Services and CSC.Major software systems in the organisation are developed and maintained in skilled workforce.

PRODUCTS PROFILE

COMPANY PRODUCTS

FACT manufactures straight fertilizers,complex fertilizers,fertilizers mixture and chemicals straight fertilizers ammonium sulphate urea

COMPLEX MIXTURES FACTAMFOS Ammonium phosphate FERTILIZER MIXTURES Rose mix Vegetable mix Garden mixture CHEMICALS Anhydrous ammonia Sulphuric acid Caprolactum Nitric acid and soda ash