Govt to soon decide on MMTC-STC merger

The government is going ahead with the merger of its two trading firms MMTC and STC, with the commerce ministry moving a note to seek Cabinet nod on the proposal, official sources said.
State Trading Corporation (STC), Project & Equipment Corporation of India (PEC) and Metals & Minerals Trading Corporation of India (MMTC) are under the administrative control of the ministry.
As per the proposal, the government would bear the expenses for VRS (voluntary retirement scheme) to be offered to about 600-700 employees of the STC, sources, who did not wish to be named, said.
Earlier, the commerce ministry had commissioned a study to work out a new structure for three state-owned trading firms MMTC, STC and PEC. The study was carried out by Crisil.

While the government wholly owns PEC, it has about 90 per cent stake in MMTC and STC.
The merger of MMTC and STC will result in synergy of operations.

"There is lot of overlapping of their functions," sources added.
MMTC and STC were created in 1963 and 1956, respectively. PEC Ltd was carved out of the STC in 1971-72.
According to industry observers, state trading companies like MMTC and STC have lost their relevance as well as business following liberalisation.
MMTC used to be a canalising agency for import and export of non-ferrous metals and fertilisers. Similarly, STC was a canalising agency for imports of essential items of mass consumption such as wheat, pulses, sugar and edible oils.

PEC was engaged in export and import of machinery and railway equipment.
In 2016-17, MMTC has incurred a loss of about Rs 30 crore. STC too reported a loss of Rs 16.5 crore in the last fiscal.