FACT staff demand relief package

Employees go on hunger strike demanding its implementation

The FACT Employees Association, representing the Save FACT Action Committee, started an indefinite hunger strike demanding the immediate implementation of the Rs 992 crore financial relief package for the company.

The Bureau of Restructuring of Public Sector Enterprises had already approved the Rs 992 crore relief package, said the association.

The office-bearers of the Save FACT Action Committee said the indefinite hunger strike was due the fact that the agitations over the past 100 days did not lead to any outcome. Left Democratic Front state convenor Vaikam Viswan inaugurated the strike on Tuesday.

George Thomas, convener of the committee, told Business Standard the tax burden for FACT due to VAT on LNG alone was more than Rs 150 crore. The action committee also demanded the price of LNG supplied to FACT must be priced on a par with other fertiliser companies in the country.

He said, in a recent conference convened by the chief minister it was assured the VAT on LNG would be exempted. However, it was not reflected in the recently presented state Budget. In 2011-12 and '12-13, VAT on naphtha for fertiliser production was 4.5 per cent and 5.5 per cent respectively. In the case of LNG, it was fixed at 14.5 per cent.

According to him, the policy was detrimental not only to the interest of FACT but also for the users of LNG. He said the Centre should withdraw the additional 5.15 per cent customs duty it was currently levying on LNG.

FACT had switched over to LNG from naphtha feedstock in September, 2013, by spending around Rs 60 crore. The company stopped producing ammonia by using LNG as fuel as it would incur a huge loss. Instead, it decided to import ammonia as it is cheaper and essential for the production of all its products.

Meanwhile, chairman of action committee, K Muraleedharan, MLA, urged the government to re-start the production of urea at FACT by setting up a urea-ammonia complex with an annual capacity of 1.2 million tonnes.

Besides this, he wanted the caprolactum division of the company to be re-opened. The plant stopped production 16 months ago due to huge import of caprolactum. India imports roughly 9 mt of urea every year. South India alone requires 6.1 million tonne per annum, as against a production of 1.5 million tonne here.

FACT recorded a net loss of Rs 354 crore during 2012-13.