English Indian Clays enters dire phase in Covid’s wake

Our Bureau Thiruvananthapuram | Updated on August 13, 2021

Ban on mining clay exacerbates situation

English Indian Clays Ltd (EICL), which has plants here engaged in mining, refining and processing of China clay, has entered what sources described as a phase of grave uncertainty under the double whammy of the Covid-19 crisis and a ban on mining clay, a critical raw material.

The company has suffered a substantial drop in market share and sales inflicting upon a ‘huge financial loss,’ a senior official said. It is apprehensive of potential for future investments in Kerala and has directed incremental funds to Gujarat, where operations have already started.

Operations were already on a downturn for the last couple of years on account of raw material shortage. This led to the closure of factories at Thonnakkal and Kochu Veli in August last year, leaving employees in disarray.

Resumed operations

Despite the loss, the company chose to resume operations partially at Thonnakkal after the State government intervened, solely for protecting the interests of workers, the official said.

EICL is part of the erstwhile Thapar Group. It was incorporated in 1963 in technical and financial collaboration with English China Clays (ECC) of the UK, pioneer and the then world leader in kaolin processing. This collaboration with the ECC ceased in the year 1992.

‘Bleak’ future

EICL has two key divisions, viz., clay and starch divisions. The clay division has three manufacturing locations in Kerala, specialising in mining and processing of high-end kaolins. The starch division has two units in Yamuna Nagar, Haryana, and Shivamogga in Karnataka.

The senior official said here that the company’s future in Kerala has become bleak since permission to mine needed raw materials is not available. This has led to a loss both in terms of financial and market share and substantially drained its confidence in committing further investments in Kerala.

Closure of plant

If things don’t improve, operations at its Thonnakkal factory here might also go down along the lines of the unit at Kochu Veli. Clay mined from Thonnakkal has been found wanting both in terms of quality and quantity thanks to the restricted permit for mining activities.

The drop in market has had a cascading effect, worsening the situation further, the official said. “Unfortunately, the state of affairs is stressful for our workers for whom we have our deepest sympathies. The issues had already been taken up at various levels of the government,” he said.

Published on August 13, 2021

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