Lok Sabha Question No. 2428 (UNSTARRED), answered on 2019-12-03
Subject: Functioning  of Chemical  and Fertilizer  Factories
Ministry: CHEMICALS AND FERTILIZERS
Asked by: Mitesh Rameshbhai (Bakabhai) Patel

## GOVERNMENT OF INDIA MINISTRY OF CHEMICALS AND FERTILIZERS DEPARTMENT OF CHEMICALS AND PETROCHEMICALS

LOK SABHA UNSTARRED QUESTION NO. 2428 TO BE ANSWERED ON 3.12.2019

## FUNCTIONING OF CHEMICAL AND FERTILIZER FACTORIES

*****

## 2428.  SHRI MITESH RAMESHBHAI PATEL (BAKABHAI) :

Will the Minister of CHEMICALS AND FERTILIZERS be pleased to state:

- (a) the details of the chemical and fertilizer factories functioning in the country; and
- (b)  the number of sick factories out of them along with the measures taken by the Government to revive them?

## ANSWER

## MINISTER FOR CHEMICALS AND FERTILIZERS (SHRI D. V. SADANANDA GOWDA)

Sir, Ministry of Chemicals & Fertilizers comprises three Departments namely; Department of  Chemicals  &  Petrochemicals,  Department  of  Pharmaceuticals  and  Department  of Fertilizers. The reply to parts of the question is as below:

(a): There  are  three  Chemical  PSUs  under  the  administrative  control  of  Department  of Chemicals and Petrochemicals (DCPC) viz. Hindustan Organic Chemicals Ltd. (HOCL), HIL (India) Ltd. (HIL) and Hindustan Fluorocarbons Ltd. (HFL; subsidiary company of HOCL).

HOCL has a unit located at Kochi, Kerala, for manufacturing Phenol, Acetone and Hydrogen Peroxide. HIL has three units located at Kochi (Kerala), Rasayani (Maharashtra) and Bathinda (Punjab)  and  seven  Regional  Sales  Office  across  India.  HIL  manufactures  public  health insecticides and agrochemicals and has also diversified into seeds and fertilizers business. HFL has  a  unit  located  at  Rudraram,  Telangana,  for  manufacturing  Poly  Tetra  Fluoro  Ethylene (PTFE) and Chloro Di Fluoro Methane (CFM-22).

Under the administrative control of the Department of Pharmaceuticals, Bengal Chemicals & Pharmaceuticals Ltd. (BCPL) is the only PSU engaged in chemical industries.

The details of the major fertilizers factories functioning in the country are at Annexure-A.

(b) Out of the 3 Chemical 3 PSUs under Department of Chemicals and Petrochemicals, HOCL  and  HFL  were  registered  with  the  erstwhile  Board  for  Industrial  and  Financial Reconstruction (BIFR) as sick companies. However, BIFR has been dissolved with effect from 01.12.2016 following which all proceedings before the Board have abated. Measures taken to revive HOCL and HFL are as follows:

(i)  HOCL: The Government of India on 17.05.2017 approved a restructuring plan for HOCL under which all the non-viable plants at Rasayani unit of HOCL have been closed down, except N2O4 plant that has been transferred to ISRO on 'as is where is' basis with about 20 acres of land and employees associated with the plant. After implementation of the restructuring plan, the  Phenol/Acetone  plant  (main  revenue  earning  product)  at  Kochi  unit  resumed  regular operations from July, 2017. This enabled HOCL to achieve turnover of Rs.471.99 crore and net profit of about Rs.22.47 crore from Kochi unit operations during preceding FY 2018-19.

(ii) HFL: For revival and growth of HFL, the company had taken steps to diversify into business of fluoro specialty chemicals and adopted the strategy of switching over from single product to multi-product facility. Plan loan of Rs.16.80 crore was also provided by the Government to HFL in 2014-15 for plant refurbishment schemes & new initiatives and for development of modified PTFE. However, due to commercial unviability of the products, mainly on account of small plant size/capacity, old technology and high overhead costs, HFL has not been able to turnaround the company's poor financial position. Further, the Government on 27.10.2016 accorded 'in principle' approval for strategic disinvestment of HFL with the parent company HOCL to exit the firm completely. However, in view of only one bid/offer received in response to the EoI, it was decided to terminate the strategic disinvestment process.

Under the Department of Pharmaceuticals, BCPL was declared sick in 1992 and is presently reporting net profit. Based on recommendation of Group of Ministers, the Union Cabinet in its meeting  held  on  28.12.2016,  has  decided  for  strategic  sale  of  Bengal  Chemicals  and Pharmaceuticals  Ltd.  (BCPL)  after  meeting  its  liabilities  from  the  sale  of  surplus  land  to Government agencies. As land sale could not materialize, the Department approached Cabinet again, which has decided, amongst others on 17.07.2019 that sale of surplus land be as per revised Department of Public Enterprises (DPE) guidelines dated 14.06.2018. Separately, the High Court of Calcutta vide its order dated 13.02.2018, passed in CWP No. 15560/2017 has set aside the decision to strategic sale of the company, indicating that the order would, however, not prevent the authorities from deciding on fate in BCPL, in accordance with the law. The order has been challenged before the Division Bench of High Court and its presently pending before the Court.

Under the Department of Fertilizers, at present, there are two sick companies viz., Madras Fertilizers  Limited  (MFL)  &  Fertilizers  and  Chemicals  Travancore  Limited  (FACT).    The following steps are being taken by the Government for revival of MFL and FACT:-

(i) Madras Fertilizers Limited (MFL):  MFL suggested for proposal for waiver of Government of India Loan & interest thereon. Based on submission of MFL, it was decided to explore the possibility of monetization of surplus land of MFL. Government of Tamil Nadu on 09.08.2018 has  accorded  No  Objection  Certificate  (NOC)  for  transfer  of  70  acres  of  land  to  Chennai Petroleum Corporation Limited (CPCL).However, the proposal for sale of 4.98 acres of land of MFL to CPCL is in advance stage. For, transfer of rest of the 65 acres of land, MFL is exploring other options.

(ii) Fertilizers and Chemicals Travancore Limited (FACT): Government of India sanctioned a Plan  loan  of  Rs.  1000  crore  to  sustain  operations  of  the  company.  Vide  DoF  letter dated 23.03.2018, approval for sale of 169.689 acres of land @ Rs 2.4758 crore per acres of FACT to Bharat Petroleum Corporation Limited (BPCL) has been accorded. Cabinet has also approved the proposal for sale of 481.79 acres of land held by FACT to the Govt. of Kerala on 24.07.2019.

Besides of  above two mentioned PSUs, Government of India is reviving 5 closed fertilizer plants of The Fertilizer Corporation of India Limited (FCIL)/ Hindustan Fertilizer Corporation Limited  (HFCL)  namely  Talcher,  Ramagundam,  Gorakhpur  and  Sindri  plants  of  FCIL  and Barauni plant of HFCL by setting up new Ammonia Urea plants of 12.7 lakh metric tone per annum capacity for each plant. These projects upon implementation/operationalization will help rejuvenate the fertilizer sector.

*****