The Hindu Business Line : Birla Corp to relocate jute biz operations

The company has decided to close down its Soorah Jute Mill. The activities of this unit, located in the heart of the city, will be shifted to Birla Jute Mill, located at Birlapur in South 24 Parganas district.

According to company sources, a couple of days back the company issued a notice, stating that shifting activities would begin from March 29, this year.

The mill would be closed down, but all 2,000 workers have been assured of jobs in the other factory.

Repeated enquiries by Business Line at the company's corporate communications department did not elicit any response.

Sources said that representatives of the management have already held dialogues with the State Government and the workers' trade union, which is dominated by CITU.

It was also learnt that workers are against the proposed shifting.

Birla Corporation, which was earlier known as Birla Jute Manufacturing Company, used to own another jute unit by the name of Bally Jute Mill.

In 1997, this mill was sold off to the city-based Kankarias, another leading jute group.

With the latest move, the number of jute mills owned by Birla Corporation will come down to one.

The Soorah Jute Mill was set up in 1892. Birla Corporation took over the unit in 1947. Currently, the capacity of the unit is 40 tonnes per day. The plant produces jute hessian and sackings.

A few months back, the unit had received a warning from the West Bengal Pollution Control Board for alleged environmental pollution. Subsequently, company sources said, corrections were made.

Birla Corporation is a profitable company but its jute business is not faring well.

In 2002-03, turnover dropped to Rs 85.66 crore from Rs 114.87 crore in the previous year. Net loss increased to Rs 10.78 crore from Rs 4.07 crore.

The company sources said that the management had been contemplating centralising the jute business, mainly to cut losses.

Trade union sources said that the management cited shortage of space at the Soorah Jute Mill as the reason for shifting the unit.

"They want to expand the capacity from 40 tonnes per day to 80 tonnes per day, but this is a lame excuse. There is open space in the existing location for expansion," a CITU leader said.

The value of the Soorah Jute Mill, in terms of real estate, is huge. It is located on the North-Eastern fringes of the city, which have undergone tremendous development in recent years.

The other jute unit is located in Birlapur, the hub of Birla Corporation's activities.

Apart from jute, the plants of the auto trim, carbide and gases, synthetics and vinoleum divisions are located in this place.