The government has formed a new company, Brahmaputra Valley Fertiliser Corporation Ltd, to take control of three fertiliser plants belonging to ailing Hindustan Fertiliser Corporation Ltd (HFC) in the Namrup complex (in Assam).

In the initial phase, the managing director and finance director of HFC will function as officers on special duty with the new company which has been registered in Shillong.

However, the company will eventually have its own chairman and managing director as well as its own board of directors.

While the revamped company is expected to hire several employees, the bulk of the jobs will be filled through lateral transfers from HFC.

The government has undertaken a Rs 509-crore revamp of the Namrup units.

This is expected to take the capacity of the fertiliser complex to 5.5 lakh tonne of urea.

Of the three plants there, Namrup I makes only ammonia while Namrup II and III (which are ammonia and urea plants) will both have a capacity to produce 1.9 lakh tonne and 3.9 lakh tonne of urea, respectively, after completion of the revamp.

The Namrup plants have been part of the HFC, which was referred to the Board of Industrial and Financial Reconstruction (BIFR) and declared sick in 1992. BIFR’s verdict was that the entire complex should be wound up. Even as the winding up procedures were on, the government had pumped in money to revamp the Namrup plants.

A petition was filed before BIFR for the demerger of HFC so that the Namrup plants could be spun off as a separate company. The demerger was later approved and the new company was registered.

Despite less than optimal production capacity, Namrup is considered a financially viable proposition because of the low cost of gas.

Gas is available to these plants at a discount and it does not attract transportation charges since the gas fields are located in close proximity to the complex.