FACT will implement its proposed urea plant only after analysing the fluctuations in the market of urea. The decision is said to have been taken following the concerns over the downward trend in urea consumption.
According to a report in The New Indian Express, the public sector fertiliser company is now giving priority to the proposed Rs 300 crore Factamfos plant, which will augment production of the company’s flagship product Factamfos to one million tonnes a year from 7 lakh tonnes by 2020.
“It does not mean FACT has abandoned or shelved the project for urea plant. It will not be implemented immediately. Urea consumption is also showing a downward trend. The urea plant will be implemented as a long- term project,'” D Nandakumar, director of marketing, FACT, was quoted as saying.
Another concern for the company is the huge investment required to setup the plant. “The Factamfos plant is coming up utilising the fund mobilised through handing over of surplus land owned by FACT at its Cochin Division. With regard to the urea plant, there are two options before us – either convert existing ammonia plant as urea plant or construct a new one. While conversion is much cheaper, new plant requires a huge investment. A medium capacity urea plant requires investment of nearly Rs 5,000 crore. Besides, the proposal for the urea plant is still under consideration of the Union government,” Nandakumar added.
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