Chennai, Sept 8: The India Cements group has reduced the workforce at Raasi Cements' (RCL) paper division--the erstwhile Telangana Paper Mills--as a first step towards shedding its non-core businesses.
According to an agreement reached with the workers' union, about 193 employees have been discharged, entailing an outflow of Rs 85 lakh. But no decision has been made as to the future of the unit.
Both Telangana Paper Mills and Raasi Ceramic Industry were merged with RCL on March 1997 as per the scheme sanctioned by the Appellate Authority for Industrial and Financial Reconstruction and the Board for Industrial and Financial Reconstruction (BIFR). The merger was intended to act as poison pill for those eyeing RCL but that did not happen as India Cements took control of the company.
The 10,000-tonne paper plant, situated at Naikangudan in Khammam district of Andhra Pradesh, has been performing at levels much lower than its rated capacity in the last few years. In 1996-97, it produced only 2,307 tonnes ofpaper, while during the last fiscal it was still lower at 423 tonnes. RCL had sold about 2,620 tonnes in 1996-97 realising Rs 4.85 crore and in 1997-98, sales were lower at 512 tonnes (Rs 1.10 crore).
As far as the ceramic division is concerned, EID Parry has reportedly evinced interest in taking over the unit. Moreover, a member of the Raju family too has evinced interest in running the unit. RCL has also commissioned consultants to work out a price at which the division can be put on the block.
India Cements plans VRS
India Cements plans to introduce a voluntary retirement scheme to reduce surplus manpower at its Shankar Nagar and Sankari Durg plants. A couple of years ago, a similar excercise was undertaken which saw its employee strength being reduced by 1,200, resulting in substantial savings owing to lower wage costs.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.