Kishor Rungta, the Chairman and Managing Director of The Fertilisers and Chemicals Travancore Limited (FACT) has achieved remarkable success in revitalising the public sector fertiliser firm. Over the past four years, FACT has consistently delivered impressive profits under his leadership. Rungta assumed his role at FACT in 2019, and in an interview with TNIE, he shares insights into the company’s future strategies, its contributions to the revival of arts and culture in Kerala, and more.
What went through your mind when you were appointed to head FACT? It was a struggling company.
When I was appointed, I knew that there was a big challenge ahead of me. Still, I decided to take up this challenge because if I could revive the fortunes, it would be a feather in my cap. When I came here, I realised there were other challenges as well, which is to motivate the staff. Because, when there is a prolonged sickness, the morale of the staff is very low. There is no fire in the belly. The system was very slow, the decision-making was slow, and on top of it, there was no money, no working capital.
How did you manage to turn around the sick PSU?
The money (about Rs 980 crore) we received from the Kerala government following the land sale was the turning point. I have earmarked Rs 780 crore for capex, and the extra Rs 200 crore gave me breathing time to rotate the working capital.
With that breathing time, we thought it was the right time to turn around the company. We took the SWOT analysis, and whatever weakness was there, we tried to overcome them. Then, we decided that our decision-making should be very fast. So, we started producing, selling, and getting the money back to the system. The rotation of the working capital became very fast. That’s how we turned around the company. And the result is there in front of you.
How did you manage the trade unions?
Initially, I also thought that there would be a lot of resistance from the trade unions. But to my surprise, when I sat down with the union leaders, because we were transparent in our decision-making, transparent in what we said, then the people started believing us. We put before them the challenges the company was facing. And we also told them about the roadmap that we are preparing. To my utter surprise, they gave a lot of support to the management. The unions know that if they don’t work or if the management does not make the right decision, then there is no future for the company. A loss-making company cannot be sustained for a long time. Either you deliver or you perish. That was a clear message.
What is the status of the expansion?
We are going to set up a new NP (nitrogen, phosphorus) plant with state-of-the-art technology. My production capacity will increase by almost 60%. Right now, we are producing 10 lakh tonnes. With this new plant, I’ll be producing 15.5 lakh tonnes. We are expecting the plant will be commissioned by September-October 2024. To support the plant, we need a lot of other infrastructure. And by the time this plant begins operation, by September-October, all other infrastructure will be in place.
FACT was one of the top recruiters in Kerala, and highly respected in all aspects. Given that you are on a growth path, do we see recruitment happening again?
We have 1,550 regular employees and almost 400-500 on a contract basis. Contract workers are mostly involved in loading, unloading and packing of our products. We are almost dispatching 3,500 tonnes every day. We have done a lot of manpower study, and have frozen the number. That number is approved by the board of directors and the government of India.
We hire 200 people every year. So, the people of Kerala will get a big opportunity to work in FACT. If you look at the average age profile of my employees, it’s below 45.
How many trade unions are there in FACT? How did you deal with strikes?
Even now, we have 7-8 trade unions at FACT. Demonstrations will always be there. I will always stand for the employee’s rights. My priority is my employees. But if they want something extra and they know that I am not going to approve it, they will demonstrate. I am not empowered to approve everything.
Can you explain your strategy for expanding the market to north India?
Our sales are dependent on climatic conditions. If there is more rain, we are in danger; if there is a shortfall in rain too, we face the danger. That’s why we decided to eliminate the risk by expanding pan-India. And, we have received a very good response in those markets. My market is in south India, and my freight costs are minimal here. I would not like to go in a big way to other markets. But, in case of any eventuality here, I should have other markets, where I can penetrate. I cater to 25% of the South Indian market share. This I do not want to lose.
Can you give a forecast of your revenues?
The new plants will be commissioned in 2024. We are expecting a turnover of Rs 8,000 crore in the 2024-25 financial year.
The stock price of FACT has gone up substantially. How do you see it?
We are the best-performing stock.We have 5-6 fertiliser PSUs. But, from September beginning, we were the best-performing stock among all fertiliser companies, including the private sector including Coromandel, Chambal, etc. My market capitalisation is Rs 37,000 crore, whereas for Coromandel, it is Rs 35,000-36,000 crore.
FACT was a candidate for disinvestment. Now, do you see a chance for a follow on public offer (FPO)?
That (FPO) we will discuss with the government of India. We will take a call on that. There is no disinvestment proposal right now.
How is the support from the state government?
The support of the state government is important. I get support from the state government while dealing with issues. Luckily, the industries minister is from Kalamassery. It is an advantage for me.
FACT was once very active in the cultural, social, and sports fields in Kerala. Any plans to revive that area, given that you are back in profits?
We are active in the CSR space. During the COVID period, we gave four oxygen plants to the state of Kerala. As far as sports and culture are concerned, we are doing the Seshasayee tournament, which is one of the best badminton tournaments in Kerala. Football and cricket too we have started. The Kathakali was the pet project of MKK Nayar. At that time, Kathakali was high in demand. That is definitively what we are looking into. But, we also have to look into the tastes of the youngsters.
You have been in Kerala for the last four and a half years. What is your impression?
After living in Kerala, you will not feel comfortable in any other place. Kerala is pollution-free and has disciplined and law-abiding people. But I miss Rajasthani food and a good social life.