Kochi: The public sector Fertilisers and Chemicals Travancore (FACT) has shut down all its plants at Udyogamandal and Cochin divisions owing to severe financial crisis.

The non-availability of adequate working capital, coupled with credit squeeze by major hydrocarbon raw material suppliers, especially Kochi Refineries (KRL), has forced the company to shut down operations till further notice, say officials.

A statement issued by the fertiliser major here said the adverse seasonal condition in South India has affected sales of fertilisers, and around Rs 350-crore worth fertilisers have been accumulated as inventory.

FACT has been facing financial strain for some time now after the international prices of naphtha shot up to Rs 18,000 per tonne. FACT chairman and managing director P R Balasubramanian had told domain-b earlier that the company can only feasibly function if the naphtha prices are at Rs 11,000 per tonne.

FACT''s ammonia plant is based on the feedstock naphtha, while benzene is used in the caprolactum unit. The benzene prices have also been on the rise, touching Rs 36,000 per tonne from Rs 20,000 per tonne.

The communiqué said the company is using the opportunity “to advance the routine annual maintenance shutdown.” The officials, however, refused to give any specific time frame for the completion of the “maintenance shutdown.”

Already FACT has an outstanding debt of Rs 90 crore due to KRL and the latter has been threatening to stop the supplies for some time now. Recently, KRL stopped the supply of naphtha, furnace oil and benzene for non-payments, but was later forced to resume supply after an agreement between the ministry of petroleum and the ministry of fertilisers.

With bids invited by the central ministry of disinvestment for selling 51-per cent stake in FACT, the shutting down of Udyogamandal and Cochin divisions is likely to act as a dampener for the prospective bidders.

FACT had reported over Rs 200-crore losses up to December 2002.