The Hindu Business Line : NTC mills report Rs 672-crore loss in Oct-Dec period

EVEN as eight out of the nine subsidiaries of the National Textile Corporation (NTC) mills are currently in the midst of a revival package, the net loss sustained by the operating mills during the quarter October to December 2003 amounted to Rs 672.68 crore.

The net loss has increased by Rs 441.17 crore over the previous quarter as per the latest performance review meeting of the holding company NTC held in the Capital recently, official sources told Business Line here.

The NTC is the largest PSU with 119 mills managed by nine subsidiaries, out of which eight subsidiaries were referred to the Board for Industrial and Financial Reconstruction for revival package

The production of own yarn for the October-December 2003 period was at 98.57 lakh kg and that of own cloth at 82.35 lakh metres.

Sales value of own yarn was at Rs 91.72 crore and that of own cloth was at Rs 17.51 crore.

There has been a slight improvement in the sales of showrooms for the period under review at Rs 9.63 crore, while exports from subsidiaries such as NTC (Mumbai North), NTC (Mumbai South), NTC (Andhra Pradesh, Karnataka & Kerala) and NTC (Tamil Nadu and Pondicherry) were at Rs 3.12 crore.

The net contribution towards wages was Rs 13.32 crore during the third quarter of the current fiscal.

The sources said that as the revival package rests with the success in sale of surplus lands vested with the various mills of NTC, the status of sale of lands was studied at the review meeting.

In the case of NTC (Gujarat), as per the Gujarat Development Control Regulations, decision was taken to surrender 20 per cent of the land to civic authorities in Ahmedabad. The matter was taken up with the State Government to allow the subsidiary to surrender land equivalent to 20 per cent at some other place so that better prices could be fetched. The State Government has agreed in principle, they said.

In the case of NTC (Madhya Pradesh), the initial response for sale of surplus/entire land of KM Mills, ST Mills, Indore; Hira Mills, Ujjain; NBT Mills, Bhopal; and BT Mills, Burhanpur, was tepid and hence the subsidiary is in the process of re-tendering. In the case of NTC (Uttar Pradesh), tender is likely to be issued before the end of this month for sale of land in Swadeshi Bagh, Kanpur.

In the case of Mumbai North, tender notice would be issued for sale of land of upcountry mills shortly. But the approval for Integrated Development Scheme by Bombay Municipal Corporation for the sale of surplus land of Mumbai mills is awaited.

The sources said that all the pending cases of upcountry mills land in the case of Mumbai South have been reviewed and the action is being taken for early sale.

At the review meeting, it was pointed out that the extant wage cost of the viable mills is very high at 18-22 per cent of the total value of production as against the industry average of 8-10 per cent in view of the "high complement of permanent labourers being employed in NTC mills and low assignments compared to the industry standards," the sources noted.

Even with the improved work assignments, NTC wage cost is expected to be around 15 per cent only.

Private sector mills in this region employ about 30 to 40 per cent of the permanent labourers only with the rest of manpower requirements (about 60 to70 per cent) being met through employment of casual labourers.

It is in this context that the review meeting reminded of the decision taken at the High Power Committee meeting held on December 31, 2003 that the permanent labour mix should not be more than 60 per cent.

Hence, the sources said, the review meeting thought it fit to "consider offering voluntary retirements for the willing workers of the revival mills and employ casual labourers in their place."

This would help to reduce the permanent labour complement in the revival mills and considerably improve the financial viability of these mills, the sources said, adding that the VRS grant funds required for this would be around Rs 40 crore.

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