NTC to modernize 22 mills at the cost of Rs 530 crore
14 Dec '05
2 min read
In a move to cut down wage expense, National Textile Corporation Limited (NTC) is to modernize its 22 mills at the cost of Rs 530 crore in two phases.
In its first phase, NTC would consider 15 mills at the cost of Rs 319 crore, said R K Pillai, CMD of NTC.
Pillai added that NTC could not bear 20 percent wage expense and introduced Voluntary Retirement Scheme (VRS) under which 51000 workers retired in the last two years.
At present, 27000 workers from nearly 40 mills have been offered VRS, but they wish to continue. Therefore, NTC has introduced such scheme to minimize workforce, stated Pillai.
Private mills have the wage expense of approximately four or five percent, but NTC expense is about 20 percent. Therefore, NTC is not able to compete with private sector, explained Pillai.
NTC has invited expression of interest from mills to form a Special Purpose Vehicle (SPV) under which 29 out of 52 mills would be leased for 15 years.
This SPV is going to be created at Ahmedabad New Textile Mill, Raipur, said Pillai.
Second phase comprises investment of Rs 211 crore in seven mills including Rajnagar mill in Ahmedabad, one in Rajasthan, West Bengal and two mills in Maharashtra and MP respectively, informed Pillai.
The Ahmedabad-based Rajnagar Mill at Asarwa is in a second phase with a cost of Rs 27.44 crore.
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