Kochi, May 3: In order to boost indigenous production of fertilisers, the Centre will soon announce a subsidy on sulphur and Ammonium Sulphate and also a new Investment policy for the fertiliser sector, Union Minister for Fertilisers and Chemicals Ramvilas Paswan said today.
The inclusion of sulphur and Ammonium Sulphate in the subsidy regime will help to boost production of sulphur-based fertilisers, which improve agricultural productivity, Mr Paswan said while laying the foundation stone of the 'FACT-RCF Building Products Plant' here. Observing that the country was largely dependent on imported fertilisers, the minister said in order to promote indigenous production, a new policy for investment in the fertilizer sector will be announced shortly.
A decision had also been taken to revive the eight closed units of Fertilizer Corporation of India and Hindustan Fertiliser Corporation and the work in these units was expected to start in the next few months, he added.
Referring to the joint venture between Kochi-based Fertilisers and Chemicals Travancore (FACT) and Mumbai-based Rashtriya Chemicals and Fertilisers (RCF), Mr Paswan said an investment of about Rs 91 crore will be made in the plant, which will use gypsum to make fiber reinforced building panels with the use of an Australian technology.
He noted that FACT had 60 lakh metric tonnes of Gypsum, which was sufficient to construct one million houses.
He also observed that inclusion of sulphur and Ammonium Sulphate under the subsidy regime will make the production of both these products remunerative, ensuring that FACT's operations remain profitable.
Also, in order to ensure that FACT does not have working capital problem, the company was tying up with Indian Potash Ltd. (IPL) for raw material. As per an MoU to be signed soon between the two companies, IPL will supply raw materials worth Rs 400 crore in a quarter to FACT.
Noting that FACT had slipped into the red, with losses worth Rs 195 crore in 2007-08 before the Centre gave it Rs 200 crore assistance in March, 2008, Mr Paswan said it was necessary for the company to switch from the costly naphtha to gas as raw material.
Apart from the LNG terminal in Kochi, which is expected to become operational by 2012-13, there was also a plan to connect Kochi to the national gas grid at the earliest. If gas could be procured at a reasonable rate, it should be possible to set up a million tonne urea plant in FACT at an investment of Rs 4000 crore to Rs 5,000 crore, he said.
Observing that the Centre was deeply concerned about the well being of farmers, Mr Paswan said the government's subsidy bill on fertilisers had touched Rs one lakh crore. ''We feel this is essential to ensure the food security of the country,'' he added.