Hibi Eden, MP, has sought the intervention of the Union Fertilizer Ministry to protect and modernize FACT (Fertilisers and Chemicals Travancore Ltd), warning that the company faces an unprecedented financial crisis due to escalating raw material costs, mounting financial liabilities and severe market pressures, according to a report by The Hindu BusinessLine published on August 2, 2026. In a letter to Jagat Prakash Nadda, Union Minister for Chemicals and Fertilizers, Eden requested the policy and financial support required for FACT's revival, modernization and long-term growth.
Financial Crisis at FACT
The report said Eden's letter described FACT as facing an unprecedented financial crisis driven by escalating raw material costs, mounting financial liabilities and severe market pressures. The sharp increase in raw material prices has substantially raised the production cost of phosphatic fertilizers and ammonium sulphate, undermining the company's financial viability. According to the report, Eden described the financial stress as extraordinary and sought a special revival package for FACT.
Production and Employment Footprint
During the last financial year, FACT produced over 1.14 million tonnes of fertilizers and marketed more than 1.1 million tonnes, according to the report. The company directly and indirectly supports the livelihoods of over 3,000 employees and workers. Eden said FACT's continued survival and growth are crucial not only for Kerala but also for India's agricultural and industrial economy, the report added.
Modernization Projects Worth ₹6,350 Crore
The FACT Board has approved expansion and modernization projects worth about ₹6,350 crore, the report stated. These projects would significantly enhance domestic fertilizer production, reduce import dependence, improve operational efficiency, generate employment and strengthen India's fertilizer security. Eden requested the Ministry to expedite the necessary approvals and extend all possible support for their early implementation.
Key Demands Before the Centre
Eden's letter to the Union Minister contained a set of specific fiscal and policy demands, the report said:
| Demand area | Specific ask |
|---|---|
| Loan restructuring | Restructure the ₹1,000-crore loans extended by the Centre and reduce interest burden |
| Modernization approvals | Expedite approvals for ₹6,350 crore expansion and modernization projects |
| Special revival package | Provide a special revival package given the extraordinary financial stress |
| Subsidy rates | Enhance fertilizer subsidy rates in line with rising raw material costs |
| Subsidy arrears | Ensure immediate release of all pending subsidy arrears |
| K-VAT on LNG | Take up with the Kerala government the issue of granting a complete exemption from K-VAT on LNG supplied to FACT |
Subsidy and Tax Relief Push
Eden urged the Centre to enhance fertilizer subsidy rates in line with rising raw material costs and to ensure the immediate release of all pending subsidy arrears, the report said. He also asked the Union Ministry to take up with the Kerala government the issue of granting a complete exemption from K-VAT on LNG supplied to FACT.
Implications for Fertilizer Supply
For India's fertilizer market, FACT's annual output of more than 1.14 million tonnes represents a substantive domestic supply source, and the financial restructuring and modernization requests outlined in the letter are central to sustaining that supply, according to the report. Eden highlighted that restructuring the ₹1,000-crore loans and reducing the interest burden would enable the company to channel more resources towards modernization and production instead of debt servicing. Early implementation of the ₹6,350 crore projects would, as per the source, enhance domestic production, reduce import dependence and improve operational efficiency, making FACT's trajectory a closely watched indicator for fertilizer procurement in India.
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