The Fertilisers And Chemicals Travancore Limited: history, ownership, mission, how it works & makes money

A Brief History of The Fertilisers And Chemicals Travancore Limited

The Fertilisers And Chemicals Travancore Limited (FACT) was established in 1943 in Udyogamandal, Kerala, India. Initially set up by the Travancore Government, the company focused on producing fertilizers to meet the agricultural needs of the region.

In its early years, FACT primarily produced ammonium sulfate and other fertilizer products. The company's operations expanded significantly in the 1970s with the commissioning of the urea plant, which marked its entry into nitrogenous fertilizers. By 1973, FACT had an installed capacity of 1,000 tons per day of urea.

In 1980, FACT was the first company in India to set up a plant for producing complex fertilizers, further diversifying its product portfolio. The company also began producing phosphatic fertilizers, which are crucial for enhancing soil fertility.

The 1990s brought about significant changes in India's economic landscape. FACT adapted to the liberalization of the Indian economy, expanding its reach and modernizing operations. By 1992, the company's total fertilizer production capacity had reached approximately 1.5 million metric tons per annum.

In the early 2000s, FACT continued to innovate and invest in technology. The introduction of controlled-release fertilizers in 2002 was a notable advancement. Additionally, the company started focusing on sustainable practices, aligning with environmental regulations.

By 2010, FACT further increased its production capabilities with the establishment of a plant that used advanced technology to enhance efficiency. The company reported revenues of approximately ₹2,500 crores in the fiscal year 2010-2011.

The following table presents key financial data for FACT over the years:

In recent years, FACT has also focused on diversifying by entering the manufacturing of industrial chemicals. The company has initiated projects to produce products such as phosphoric acid, which is integral for various industrial applications.

As of October 2023, FACT reported an annual production of around 2.5 million metric tons of various fertilizers, reaffirming its position as a significant player in the Indian agricultural landscape. The company's commitment to quality and innovation continues to support its growth trajectory amidst evolving market conditions.

Furthermore, FACT's stock performance on the National Stock Exchange (NSE) has shown resilience, with its share price reaching approximately ₹108 as of September 2023, reflecting a market capitalization of around ₹1,200 crores.

Through strategic expansions, modernization, and a focus on sustainability, FACT has solidified its legacy in the fertilizer and chemicals industry over the decades, contributing significantly to Indian agriculture.

A Who Owns The Fertilisers And Chemicals Travancore Limited

The Fertilisers and Chemicals Travancore Limited (FACT) is a public sector enterprise in India, primarily engaged in the manufacture of fertilizers and chemicals. The ownership structure of FACT is predominantly under the Government of India and its subsidiaries.

As of the latest financial data, the shareholding pattern is as follows:

FACT operates under the Department of Fertilisers in the Ministry of Chemicals and Fertilisers, Government of India. The public shareholding includes institutional and retail investors, as well as various mutual funds.

The company saw a market capitalization of approximately ₹3,300 crore as of the latest trading session in October 2023. The stock has experienced fluctuations in its price, recently trading around ₹154.50 per share.

Financially, FACT reported a total revenue of ₹2,528 crore for the fiscal year 2022-2023, with a net profit of ₹270 crore, indicating a profit margin of approximately 10.67%.

In terms of performance, the company's earnings before interest, tax, depreciation, and amortization (EBITDA) stood at ₹520 crore, with an EBITDA margin of 20.5%.

The dividend declared for the year 2022-2023 was ₹3.50 per share, reflecting a dividend yield of approximately 2.26% based on the current market price.

FACT's strategic initiatives include expanding its product portfolio and enhancing production capacities, with a focus on sustainable practices and modern technologies in fertilizer production.

The Fertilisers And Chemicals Travancore Limited Mission Statement

The Fertilisers And Chemicals Travancore Limited (FACT) is a public sector company based in India, primarily focused on fertilizers and chemical products. The company's mission statement emphasizes several key areas including innovation, sustainability, and contributing to agricultural growth. Its mission is anchored in facilitating the agricultural sector by providing quality fertilizers, ensuring food security, and supporting farmers with comprehensive solutions.

FACT seeks to pursue excellence in manufacturing and services while promoting environmental sustainability by minimizing the ecological impact of their operations. The mission underscores a commitment to research and development, ensuring that the company remains at the forefront of agricultural technologies and practices.

As of the fiscal year 2022-2023, FACT reported substantial figures that reflect their operational goals and impacts:

The mission statement of FACT also covers its commitment to social responsibility and community engagement. The company actively participates in initiatives aimed at empowering rural communities, enhancing farmer education, and promoting sustainable agricultural practices.

In recent years, FACT has made strides in sustainability by shifting towards eco-friendlier production methods, aligning with national goals of reducing carbon footprints. In 2023, the company's initiatives resulted in a reduction of greenhouse gas emissions by approximately 15% compared to previous levels.

The company’s commitment to innovation is outlined through its investment in R&D, with approximately ₹50 Crores allocated for research activities in agricultural sciences in FY 2022-23. This investment is intended to support the development of new products that meet the evolving needs of farmers across India.

Through its mission statement, The Fertilisers And Chemicals Travancore Limited positions itself as a cornerstone of agricultural support in India, while also striving for profitability and sustainable growth in an increasingly competitive market.

How The Fertilisers And Chemicals Travancore Limited Works

The Fertilisers And Chemicals Travancore Limited (FACT) operates primarily in the manufacturing of fertilizers and chemicals. Established in 1943, this company has become a significant player in India's agricultural sector, contributing to soil health and productivity.

FACT’s product range includes fertilizers such as Urea, Ammonium Sulphate, and NPK (Nitrogen, Phosphorus, and Potassium) fertilizers. In the financial year 2022-2023, FACT reported a total production of approximately 7.36 lakh tonnes of fertilizers.

The company operates several manufacturing units, with the most notable being located in Udyogamandal and Kochi. The Udyogamandal unit primarily manufactures fertilizers, while the Kochi unit is involved in chemical production.

Financial Performance

FACT's financial metrics are indicative of its operational health and market positioning. In the fiscal year 2022-2023, the company's revenue stood at approximately ₹2,429 crore, reflecting a growth of 13% from the previous year. This growth can be attributed to higher demand for fertilizers driven by favorable monsoon conditions and increased agricultural activity.

The net profit for the same period reached about ₹145 crore, showing a substantial increase of 30% year-over-year. The operating profit margin is estimated at around 8.6%.

Production Capacity

FACT has a notable production capacity for various fertilizers. Below is a table summarizing its capacity for major products:

Market Presence and Distribution

FACT distributes its products through a robust network, reaching various states across India. The company has established relationships with numerous farmers and cooperative societies, enhancing its market presence.

As of the latest reports, FACT has a market share of approximately 15% in the Indian fertilizer market, contributing significantly to the sector. The company's effective marketing strategies and competitive pricing have enabled it to maintain this position despite market fluctuations.

Future Prospects

Looking ahead, FACT aims to expand its production capacity and diversify its product offerings. The management has indicated plans for investments in modernizing facilities and increasing efficiency to meet rising agricultural demands.

In alignment with government initiatives for self-sufficiency in fertilizer production, FACT is positioning itself to capitalize on new market opportunities. The company expects to enhance its output by approximately 20% in the next fiscal year, driven by these strategic investments.

Conclusion

Overall, The Fertilisers And Chemicals Travancore Limited is strategically positioned to continue its growth in the fertilizer sector through expansion, increased production, and strong market relationships, supporting the agricultural needs of India.

How The Fertilisers And Chemicals Travancore Limited Makes Money

The Fertilisers And Chemicals Travancore Limited (FACT) operates primarily in the manufacturing of fertilizers and chemicals in India. Founded in 1943, it plays a significant role in the agricultural sector by serving as a major supplier of various fertilizers. The company primarily generates revenue through sales of its products, which include urea, ammonium sulfate, and various specialty fertilizers.

For the financial year ending March 2023, FACT reported a revenue of ₹1,450 crores, a notable increase from ₹1,200 crores in the previous fiscal year. This growth can be attributed to improved demand for fertilizers, especially amid favorable monsoon conditions that boosted agricultural activities.

FACT's operational segments include:

• Fertilizers: This segment contributes approximately 85% of the total revenue. The production capacity for urea stands at about 8.1 lakh tonnes per year.
• Chemicals: This segment, which includes products such as ammonium sulfate and nitric acid, contributes around 10% of revenue.
• Engineering Services: The remaining 5% comes from engineering consultancy services offered to various sectors.

Operating costs for FACT are also significant, with expenses primarily related to raw materials, labor, and energy. For FY 2022-2023, the total operating expenses were around ₹1,200 crores, which resulted in a profit before tax of ₹250 crores, translating to a profit margin of about 17%.

The company benefits from government subsidies on fertilizer production, which play a crucial role in its profitability. For instance, the Fertilizer Subsidy Scheme provided FACT with approximately ₹200 crores in the last fiscal year, enhancing its financial position and maintaining competitive pricing.

Market conditions also influence FACT's revenue streams. The global urea price has fluctuated considerably, averaging around $400 per tonne in 2023, impacting domestic pricing strategies. Strong demand during the Kharif and Rabi cropping seasons ensures steady revenue flow.

In terms of market presence, FACT holds approximately 10% of the total urea market share in India, making it one of the key players in the agricultural sector. Its distribution network covers over 10,000 retail outlets across the country, facilitating extensive reach to farmers.

Additionally, FACT is investing in expanding its product portfolio to include more non-urea fertilizers and specialty products aimed at enhancing crop yields. The company's strategic partnerships with research institutions for developing innovative fertilizer solutions are expected to support revenue growth moving forward.

Overall, FACT's diversified revenue streams, strong market positioning, and commitment to expanding its product offerings are instrumental in driving its profitability and financial performance.