Kribhco, Iffco likely to take over sick fertiliser units

Kribhco, Iffco likely to take over sick fertiliser units

(WILL THIS UNFINISHED TASK WILL BE ACCOMPLISHED SOME DAY??)

K Giriprakash / BSCAL January 21,1997

The fertiliser ministry has decided to rope in Krishak Bharati Cooperative Ltd (Kribhco) and Indian Farmers Fertiliser Cooperative Ltd (Iffco) to revive some of the sick fertiliser units in the country.


Minister of state for fertiliser Sis Ram Ola said Kribhco has agreed to set up a new unit at Gorakhpur by utilising the infrastructure of the existing sick unit of the Fertiliser Corporation of India Ltd (FCI).



The proposed unit is expected to cost about Rs 900 crore. The old unit was closed down in June 1990 due to a fire accident. Ola said both Kribhco and Iffco will be asked to help out with the revival of the sick units. Both the cash-rich fertiliser giants had earlier refused to take over the sick units on the pretext they were saddled with ongoing expansion projects and joint ventures. Kribhco earned a net profit of Rs 202 crore in 1995-96 and Iffco netted Rs 132 crore for the same period.



The ministry has requested Board of Industrial & Financial Reconstruction (BIFR) to extend the deadline for submitting the revival package of certain units of FCI and Hindustan Fertiliser Corporation (HFC) to March 31.



Formulation of the revival package was delayed as Industrial Credit & Investment Corporation of India and Industrial Development Bank of India, which are part of an expert group constituted for this purpose, had insisted upon an independent appraisal of the package.



The group is expected to submit its full report by mid-February. It consists of representatives from the two financial institutions. Fertiliser Corporation of India and HFC were asked to reformulate the revival packages, indicating specific reliefs. The packages envisaged revamp of Fertiliser Corporation of Indias Sindri, Ramagundam and Talcher units and HFCs Durgapur, Barauni and Namrup units, involving a fresh investment of Rs 2,201.13 crore at 1994 price levels. These units are expected to produce 23 million tonnes per year after revamp.



ICICI had, however, expressed certain reservations on the viability of the packages in October 1995 and, hence, the group of ministers referred the case to the committee of secretaries which, in turn, constituted an expert group.



Fertiliser Corporation of India incurred a net loss of Rs 426.62 crore in 1995-96 against Rs 336.13 crore in 1994-95. HFC incurred a net loss of Rs 466.52 crore, including interest on government loan of Rs 318.65 crore. Accumulated loss of the company is about Rs 3,090 crore. During 1995-96, Fertiliser Corporation of India produced 2.08 lakh tonnes of nitrogen at 35 per cent capacity utilisation.



The Fertiliser Corporation of India units were plagued with acute liquidity problems, prolonged power cuts from state grids in Andhra Pradesh and Orissa and strike in the mines of Singareni coal fields at Ramagundam.

The fertiliser ministry has decided to rope in Krishak Bharati Cooperative Ltd (Kribhco) and Indian Farmers Fertiliser Cooperative Ltd (Iffco) to revive some of the sick fertiliser units in the country.


Minister of state for fertiliser Sis Ram Ola said Kribhco has agreed to set up a new unit at Gorakhpur by utilising the infrastructure of the existing sick unit of the Fertiliser Corporation of India Ltd (FCI).



The proposed unit is expected to cost about Rs 900 crore. The old unit was closed down in June 1990 due to a fire accident. Ola said both Kribhco and Iffco will be asked to help out with the revival of the sick units. Both the cash-rich fertiliser giants had earlier refused to take over the sick units on the pretext they were saddled with ongoing expansion projects and joint ventures. Kribhco earned a net profit of Rs 202 crore in 1995-96 and Iffco netted Rs 132 crore for the same period.



The ministry has requested Board of Industrial & Financial Reconstruction (BIFR) to extend the deadline for submitting the revival package of certain units of FCI and Hindustan Fertiliser Corporation (HFC) to March 31.



Formulation of the revival package was delayed as Industrial Credit & Investment Corporation of India and Industrial Development Bank of India, which are part of an expert group constituted for this purpose, had insisted upon an independent appraisal of the package.



The group is expected to submit its full report by mid-February. It consists of representatives from the two financial institutions. Fertiliser Corporation of India and HFC were asked to reformulate the revival packages, indicating specific reliefs. The packages envisaged revamp of Fertiliser Corporation of Indias Sindri, Ramagundam and Talcher units and HFCs Durgapur, Barauni and Namrup units, involving a fresh investment of Rs 2,201.13 crore at 1994 price levels. These units are expected to produce 23 million tonnes per year after revamp.



ICICI had, however, expressed certain reservations on the viability of the packages in October 1995 and, hence, the group of ministers referred the case to the committee of secretaries which, in turn, constituted an expert group.



Fertiliser Corporation of India incurred a net loss of Rs 426.62 crore in 1995-96 against Rs 336.13 crore in 1994-95. HFC incurred a net loss of Rs 466.52 crore, including interest on government loan of Rs 318.65 crore. Accumulated loss of the company is about Rs 3,090 crore. During 1995-96, Fertiliser Corporation of India produced 2.08 lakh tonnes of nitrogen at 35 per cent capacity utilisation.



The Fertiliser Corporation of India units were plagued with acute liquidity problems, prolonged power cuts from state grids in Andhra Pradesh and Orissa and strike in the mines of Singareni coal fields at Ramagundam