Public-sector fertiliser company The Fertilisers And Chemicals Travancore Ltd (FACT) will approach the Union Government for an interest-free loan of Rs 550 crore. The company is facing heavy interest burden on loans availed from financial institutions to tide over a liquidity problem.

Delivering a keynote address at a seminar conducted at Udyogamandal Club here on Saturday, Mr Sham Lal Goyal, Chairman and Managing Director, pointed out that the company had paid Rs 140 crore as interest on loans last year. The company registered losses of about Rs 40 crore. This has been a pressing problem for FACT for several years now. Without the interest burden, the company could have easily achieved a profit of Rs 100 crore, he said.

FACT has also decided to go for joint-venture arrangements to implement some of the pending projects, such as a new urea plant, a phosphoric acid plant, capacity expansion of Factamfos production, container freight station, etc.

Replying to a query at the seminar, he said the company could not avoid increasing fertiliser prices after raw material costs increased sharply. Stressing the need for stepping up production of fertilisers in India, Mr Goyal pointed out that about 25 per cent of the country's urea requirement was met through imports. India imports eight million tonnes of its requirement of about 28 million tonnes while potash needs are met through imports only.

Dr M.P. Sukumaran Nair, former Managing Director of The Travancore-Cochin Chemicals Ltd, presented a paper on the world fertiliser scenario. Even though India is the second-largest producer of chemical fertilisers now, per-hectare consumption of fertilisers in the country is only 135 kg compared with China's 235 kg. He stressed the need for an effective policy for natural-gas pricing and subsidies for the fertiliser industry.

Mr P. Rajeev, Member of Parliament (MP), inaugurated the seminar. Mr K. Chandran Pillai, a former MP, presided over the function. Mr V.K. Anil, Director (Technical), FACT, also spoke.

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