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PSUS:
TEMPLES OF DOOM
SACKCLOTH
AND ASHES
Obsolete
machines, red tape and huge losses-it's a wonder that this dinosaur is
still alive
NATIONAL
JUTE MANUFACTURERS CORP
Incorporated: 1980; HQ: Calcutta; Product: Jute Textiles; Public investment:
Rs 935.80 cr; Net Worth:- Rs 1,098.65 cr; No. of Employees: 33,676
By
Labonita Ghosh
 |
| Litany
of Woes |
There's
a blackboard that hangs in the sacking unit of the National Jute Mill,
a member of the West Bengal-based National Jute Manufactures Corporation
(NJMC). It's actually a checklist. When a worker finds something wrong
with his machine, he puts his loom number on the board so that roaming
mechanics can come to his aid. It's practically impossible to shout out
to engineers over the clacking of hundreds of looms.
If someone
were to draw up a checklist of problems that plague NJMC, it might need
a few dozen blackboards. In 1980, its six mills (National, Kinnison, Alexandra,
Union and Khardah in West Bengal; Rai Bahadur Hurdut Motilal Mills, or
RBHM, in Bihar) were incorporated as a wholly-owned undertaking of the
Central government-taken over from owners as varied as the late media
baron Ramnath Goenka to Bihar landlord Rai Bahadur Hurdut Motilal and
British firms like Andrew Yule and Bird & Heilgers. NJMC was already
doddering. Two decades later, the public investment of Rs 935.80 crore
has gone down a bottomless pit, the company's net worth being Rs 1,098.65
crore in the negative. The total production (of all six mills) has dropped
from 78,514 metric tonnes in 1995-96, to 46,361 metric tonnes in 1999-2000.
In 1992,
in view of cash losses for successive years, the company was brought under
the BIFR, but not a single revival package has come through yet. Now officials
are lobbying for a Rs 250-crore rehabilitation (drawn up in 1996) that
might allow some of the loss-making units to be shut down, a part of the
total prime land of 340 acres sold, and at least a fraction of the 33,676
workers given voluntary retirement. "The money will then be ploughed
back into the remaining mills to put them back on their feet," says
Chairman and Managing Director P. Mahapatra.
What optimists
at the PSU slur over is the mills' inherited weakness. A combination of
factors, historical and circumstantial, have done NJMC in. Jute, a traditional
industry of undivided Bengal, was split down the middle by Partition in
1947. While the erstwhile East Pakistan got the lion's share of land under
jute, West Bengal was left holding a handful of mills (59, at last count),
in various stages of dereliction.
Most were
hamstrung by their limited access to a cheap and steady flow of raw material.
Post-Partition, the demand for Indian jute (80 per cent of which comes
from Bengal alone) has plummeted in the international market. The demand
for carpet-backing cloth (CBC) that peaked in the 1960s, has completely
died out. Jute in Bengal now runs on the sale of B-twill bags and hessian
sacks that are used to store foodgrains, fertilisers and vegetables. It
is only thanks to Central protectionism that organisations like the Food
Corporation of India are forced to buy jute from West Bengal.
But if history
and market fluctuations were factors, all mills should have been routinely
affected. Strangely, some of those under private ownership, like Champdani,
Ludlow and Arun Bajoria's Hooghly Mills, are doing booming business. Experts
ascribe the success of private mills to better manpower management, ready
inputs and the ability to take fast decisions. According to Devidas Dutta,
unit head at National, every hike in bale prices spells loads of paperwork
and meetings at NJMC. "By the time we get clearance to buy at the
enhanced rates, the prices have shot up again," says Dutta.
More
a Cause than a Business: Then there's the problem of overstaffing.
NJMC's workforce including permanent, semi-permanent and an army of casual
(or badli) labourers who step in when production-or absenteeism-is high.
At any given time, at least 1,500 workers are sitting idle at each mill.
They pull rickshaws and sell vegetables outside the factory after a mandatory
roll-call every morning. Yet with Rs 250 as daily wages (benefits included),
they are still the highest paid labourers in West Bengal.
The PSU's
greatest drawback is its consistent neglect of technology. The six mills
were all set up between 1897 and 1935. The machines are as old. Except
for some cosmetic upgrades (and cursory renovation of about 5 per cent
of the total machines after nationalisation), the technology is much the
same. At National, the obsolete breaker card and finishing machines were
replaced in 1984 with spanking new replicas that did exactly the same
amount of work. The Bihar-based RBHM had some notable technological revamps,
but the mill is not even fully electrified. In most NJMC mills, sorting
and grading of raw jute is done by the primitive hand-eye method.
This week,
the Indian Jute Research Association begins a three-month techno-economical
survey into the viability of most of NJMC's processes. But no turnaround
is expected until the PSU ceases to depend on the budgetary munificence
of the Central government, brings its cost structure back in line with
the best in the industry, and, most importantly, does not wait for the
ministry's nod for every management decision. Champdani Mills, for that
matter, has defied the state's dismal industrial climate by innovations
in decorative fabrics and blends, and bagging orders abroad-70 per cent
of its products are exported. Bajoria's Hooghly Mills is cash rich as
the group profitably trades in raw jute on the side. Jute Commissioner
(and former NJMC chairman and managing director) Debasish Gupta says,
"The jute industry is a business and must be run like one."
To the government, running the six ailing mills is evidently more a cause
than a business.
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