(Translated by Beatriz Vejarano, a CSN Volunteer Translator)
Barrancabermeja, June 12, 2013.
Doctor
RICHARD AGUILAR VILLA
Governor of Santander
Bucaramanga
Dear Sir,
As is publicly known, on June 26th the meeting of the creditor assembly will be held for the corporate restructuring of Ferticol, agreed upon and signed on July 31st and August 1st 2003 in Bogotá and Barrancabermeja respectively, in the framework of Law 550 of 1999. Knowing that during the 10 years that the agreement has been in force, the full extent of its arbitration clauses has not been complied with – the exception being the Ecopetrol debt, with the transfer of shares to the Santander Governor’s Office in 2007 for an amount estimated at 23,000 million pesos, with the aggravating circumstance that the liabilities amount to 44,000 million pesos – it is obvious that at this point the meeting will lead to the liquidation of Ferticol.
In spite of the will expressed by your administration as well as by the previous one to save Ferticol through investments amounting to more than 4,500 million pesos, neither the company’s production nor its cash flow have improved. Today, it is producing only 43% of its installed capacity of 65 tons of ammonia per day; 80% of the capacity to produce nitric acid; and no urea is being produced because there is no surplus of ammonia. This shows an inverse correlation between production and liabilities that puts the company in a dire situation, as was expressed by Flavio Mayorca, president of the SINTRAINQUIGAS union, in a letter addressed to you on May 18th of this year.
Aware of the conversations you have been holding with the national Government and with the management of the Colombian Petroleum Company, Ecopetrol, and of contacts with several investors interested in Ferticol, I am led to ask you to take into consideration the following factors: the country’s need for agricultural inputs in view of the costly and growing imports of fertilizers; the need to guarantee payment of salaries and social benefits owed to the workers and monthly pension to retired workers; payment of claims; and the establishment of an enterprise with an installed capacity that would allow economies of scale, that is, a plant capable of producing 120 daily tons if ammonia, the raw material for the production of nitric acid, ammonium nitrate and urea.
An alternative to the situation described above is possible, considering that the grounds where Ferticol is located are valued at about 127,000 million pesos, which is sufficient to pay back debts and provide capital for the acquisition of a modern plant with greater capacity.
This process could be carried out through founding a new Ferticol while the original one is gradually being replaced within a given timeframe, without sacrificing the workers or the pensioners or the company brand itself, which has attained a position in the market.
The Ministry of Agriculture, Ecopetrol, the Governor’s Office, the Barrancabermeja Mayor’s Office and national entrepreneurs must back this alternative. It must be presented before the organs that make up the national royalties system in order to set up the project with funds from that system, a way of recognizing part of the resources withheld under Law 1530 or National Royalties System.
As has been pointed out, the present circumstances warrant priority and decisive attention by the Governor, keeping in mind that the department inherited this situation when it accepted the company in such condition.
Respectfully yours,
LUIS ROBERTO SCHMALBACH CRUZ
Congressman from Santander