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"In Gujarat, we are going to start a new mill and here in Mumbai we will take out all the machinery. Ultimately, we will sell the land and the buildings or we will build our own buildings."

Mr B.K. Birla

The Chairman of the BK Birla Group, Mr B.K. Birla, says that they are looking to shift base to Gujarat or other areas in Maharashtra. The company's Mumbai operations will be closed in the next 2-3 years, he informs.

He adds that they might go in for development or selling of their Mumbai land.

The company is also looking at expanding its cement business.

Excerpts from CNBC-TV18's exclusive interview with Mr B.K. Birla:

The decision to cut down 1,200 to 1,500 looms in Century Textiles and Industries, is it a beginning of a phase out from your Mumbai facilities?

We are examining the matter and perhaps it will take two-three years.

Is this the first step of phased plan to take your textiles operations out from Mumbai?

Ultimately, we will have to take it out. But at present we have some problems of workers also. So gradually in the course of two-three years, we should be able to take it out.

Is that a plan that you will relocate your textile facilities to Gujarat and may look at developing this real estate, which is in Mumbai in a phased manner?

Not real estate, but we are thinking that our industry should be in Gujarat or Maharashtra.

If indeed you shift your industry to Gujarat or Maharashtra, what do you plan to do with that land? You will sell it off or you will use it for development?

It depends, we are examining all the alternatives. Either we will sell it off or perhaps we will make our own buildings.

Have you thought about how you want to deal with the current workforce at Century Textiles. Will you be relocating or compensating them in these two-three years' phase plan?

In Gujarat, we are going to start a new mill and here in Mumbai we will take out all the machinery. Ultimately, we will sell the land and the buildings or we will build our own buildings.

You touched upon some expansion plans as well. This is for cement, textile or for both?

It is correct that we are expanding on the cement front. At the end of the year, we will have about eight million tonnes of cement. In textiles, we are going to start a new textile mill in Gujarat.

What is the nature of the differences with workers at this point of time? Is it a compensation issue, or will you look at transferring some of these jobs and indeed this working population to Gujarat when you set up a mill there?

Transfer is almost impossible. The workers from Mumbai will not go to Gujarat or rest of Maharashtra. But even in case if they agree to go there, their wages would be extremely high, since the wages in Mumbai are the highest as compared to the rest of India.

Could you tell us what is happening on the cement business front because there has been talk that the government wants to cool down cement prices a little bit and it is talking to cement manufacturers? What do you think is the situation, and how it will progress from here?

Cement is a very important industry and everyone is trying to expand their cement industry. In our own case by the end of the year, we should be manufacturing about eight million in Century alone. After that we will expand further.

Can you tell us about Century Enka because market was a bit disappointed with the results that Century Enka posted? Is there any reason why the operating margins got squeezed and your operating profits failed in Century Enka this time?

Century Enka depends on the imports from China and it is exporting to New York. So the future of Century Enka depends mainly on China. From the angle of efficiency it is good, we have got an excellent team. The problem is that we are going to compete with China and China is exporting at very low prices. We have applied for the import duties and perhaps within few years, we should be able to obtain some help.

More Stories on : Interview | Textiles | Cement

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