South India Viscose to sell off properties

The Sirumugai-based South India Viscose (SIV) Industries Limited, known for not abiding by the environmental and ecological norms, has decided to sell off its wind farms and other properties.

The sale proceeds would be used to settle the debts it owes to the Tamil Nadu Electricity Board (TNEB) and to provide a rehabilitation package for its employees as well as the affected villagers, according to sources. The debts have crossed the Rs 10-crore mark.

The Madras High Court has appointed an official liquidator (OL) to sell off its properties. In the first phase, the company's two wind farms in Tirunelveli and Kanyakumari districts would be sold. A week ago, SIV placed advertisements in leading vernacular dailies inviting offers for the sale of the same.

As per the advertisement, the company's first wind farm at Aralvaimozhi in Kanyakumari district with an installed capacity of four machines of 250 kilo watt (KW) each, spread over 13.57 acres, is valued at Rs 1.50 crore.

While the second wind farm at Perungudi in Tirunelveli district with an installed capacity of 24 machines of 250 KW each spread over 37.47 acres, is valued at Rs 8.25 crore. The company is also selling its 76.29 acres land in Tirunelveli for Rs 35 lakh.

In the second phase, SIV would sell its six limestone mines at a combined 47.83 acres in Tiruchirapalli district for Rs 3.82 crore.

The company is also likely to sell its seven tea plantations situated in the hills of Nilgiris and Kodaikanal spread over 234.46 acres. The land is likely to fetch around Rs 2.88 crore.

Finally, it would sell its defunct pulp, rayon and fibre units (that are now under legacy) along with the machinery which are situated at Sirumugai village in Coimbatore for an estimated Rs 10.77 crore.

Established in 1964, SIV Industries was the only integrated viscose fibre manufacturing unit in the South till its closure in the early 2000"�01. The company ran into trouble in 1997 when it was pulled up by the Tamil Nadu Pollution Control Board (TNPCB) for letting untreated effluents into the river Bhavani at Sirumugai village.

The villagers living downstream who used the river water for drinking, irrigation and other household purposes complained of health problems and a decline in crop productivity due to contamination.

SIV was forced to shut down its pulp division. Its rayon and fibre divisions were also not functioning to optimum capacity, resulting in high production cost. The company has since invested over Rs 30 crore on an effluent treatment plant and purchased nearly 800 acres in and around Sirumugai for discharging its treated effluents.

Following large-scale protests by the locals as well as the directives of the TNPCB and the High Court, the mill invested substantially to upgrade its pollution control equipment. It imported technology from a Germany"�based agency for effluent treatment. The mill also started discharging its waste water into its own land to irrigate crops.

The pollution issue took its toll on the company rendering it inoperational. It also ran up huge losses amounting to Rs 460 crore due to sluggish market demand and steep fall in the price of viscose fibre.

At last, the Board for Industrial and Financial Reconstruction (BIFR) declared it as a sick unit in 2002 "� 03.

As per the court's directive, the company is planning to mobilise money through the sale of its properties to provide rehabilitation package for its staff. Earlier, in June 2006, it sold 'Viscose Towers', a multi-storied commercial complex at the busy Avinashi Road in Coimbatore. Real estate sources said that the sale fetched around Rs 25.75 crore.

The closure of SIV rendered as many as14,000 employees jobless, besides making a Rs 8"� 10 crore dent in the state's revenue, sources say.