The government on Wednesday approved the closure of three Calcutta-based loss making state owned firms — National Jute Manufactures Corporation (NJMC), its subsidiary Birds Jute and Exports Ltd (BJEL) and Biecco Lawrie Limited (BLL) — as repeated attempts to revive them failed.
While the CCEA approved the proposal to offer a voluntary retirement scheme and a voluntary separation scheme to the employees of BLL, no such offer was made to the two other firms as they had no staff or workers on its rolls.
The government made a lot of effort in the past 25 years to keep these two companies NJMC and BJEL up and running. The private operators that came also left.
“The cabinet has decided to shut down these two companies,” Union law minister Ravi Shankar Prasad told reporters here after a cabinet meeting.
NJMC has been incurring losses for several years and was under reference to the Board for Industrial and Financial Reconstruction since 1993, said a statement from the nodal ministry of textiles.
The Telegraph
The company’s primary product was hessian jute bags, used for the packaging of food grains. Over the years, the demand for hessian bags has shrunk. Therefore, it is no longer commercially viable to run NJMC.
“Looking at its past performance, market conditions and the competition from plastics and the capacity of private jute mills, it was noted that NJMC would not be in a position to recoup its negative net worth through operational profits. Also, NJMC has no staff or workers on its rolls. Hence, the closure,” the statement said.
BJEL, too, has no staff and as the factory is not in operation, a closure does not have any adverse implications, the ministry said.
“The proposal will help in closing down loss-making companies and ensuring release of valuable assets for productive use, or for generating financial resources for developmental progress,” it said.
The land available with both the companies will be put to public use or other government use, it said.
Biecco Lawrie Limited, set up in 1919 as British India Electric Construction Co Ltd, ran four business operations — switchgear manufacturing, electrical repair, projects division, and lube blending and filling facility.
