Fertilizer Corporation of India
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|Owner||Government of India|
Fertilizer Corporation of India Limited is a public sector undertaking in India under the administrative control of the Department of Fertilizers, Ministry of Chemicals and Fertilizers. The company began in 1961 when Indian government consolidated several state run fertiliser companies into a single SBU. FCI has manufacturing units in 5 states: Sindri complex (Jharkhand), Gorakhpur complex (Uttar Pradesh), Ramagundam complex (Telangana), Talcher complex (Odisha) and an un-commissioned project in Korba (Chhattisgarh). The organisation was declared "sick" in 1992 and in 2002 Government of India initiated actions to close the company. The company has been seeking to restart operations and as of May 2010 had received initial approvals of a government loan forgiveness plan which would allow operations to restart in five of its units.
In 1978, FCIL was re-organised and 5 separate entities were formed – FCIL, National Fertilizers Limited (NFL) , Hindustan Fertilizer Corporation Limited (HFCL), Rashtriya Chemicals & Fertilizers (RCF) and Projects and Development India Limited (PDIL) – (earlier the technology & development wing known as P & D). In the mid 1990s, FCI employed around 28,000 people and was one of the largest public sector companies in India.
Apart from these manufacturing units, there were 9 gypsum producing units under Fertilizer Corporation of India Limited operating through another division known as the Jodhpur Mining Organization – now renamed FCI Aravali Gypsum and Minerals India Limited (FAGMIL). Under the Sick Industrial Companies (Special Provisions) Act 1985, the Board for Industrial and Financial Reconstruction (BIFR) declared the Fertilizer Corporation of India Limited sick in 1992. Within the next decade the Indian government concluded that all fertiliser production units of FCIL except Jodhpur Mining Organization were incurring heavy losses & decided to wind up FCIL. However the main reasons for the loss incurred by FCIL were higher incidence of interest, higher input costs especially the power tariffs by the concerned State Electricity Boards & the associated raw materials,and higher consumption which was not reimbursed by the FICC.
The main products of Fertilizer Corporation of India Limited were Ammonia, Urea, Nitric Acid, Ammonium Bicarbonate, Gypsum, and Ammonium Nitrate in varied forms such as Prill, Flake, and Melt.
Revival of the Company
Considering the shortage of domestic production of Urea in meeting the overall domestic demand of Urea, the Cabinet decided in April 2007 to consider the feasibility of reviving Fertilizer Corporation of India. Subsequently, Cabinet constituted an Empowered Committee of Secretaries (ECOS) on 30 October 2008 to consider various options of revival and further approved 'in principle' to consider waiver of GOI Loan & Interest, in case of availability of viable fully tied up revival proposal. After detailed study and recommendations for a revival option, ECOS on 24 August 2009 selected a suitable Revival Model and recommended the same for seeking the approval of GoI.
Following PSUs & Co-operative have shown interest in the revival of some Units of the Company:
Considering the above, ECOS in their 3rd meeting held on 4 August 2010 recommended permitting revival by these PSUs & Co- operative on nomination basis at reserve values of the bid parameters of the 'revenue sharing' model, subject to approval of CCEA.
FCIL & DOF are in the process of finalising a Draft Rehabilitation Scheme (DRS) with the assistance of the Project Advisor, M/s sought on the DRS.
The case came up for hearing before the BIFR on 12 November 2010 and on deliberations of the progress made, the Bench advised as under:
(i) Appointed State Bank of India as the Operating Agency;
(ii) Advised the Company/DoF to obtain the approval of the Cabinet for the proposed Revival Scheme and suggested that the waiver of liabilities of FCIL towards CPSUs and Government agencies through One Time Settlement (OTS) also be taken up.
(iii) The next hearing is scheduled for 3 March 2011 for consideration of Revival Scheme approved by the Government.
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