Garware Nylons Plant Close To A Standstill

The company, which employs over 1,200 workers, has slashed its peak production of 40 tonnes of PFY per day to just 3 tonnes per day. The meagre production level is being maintained to avoid a complete shutdown since reviving PFY production will entail a one-month warm-up exercise and additional costs.

Seventy per cent of Garware Nylons' income comes from PFY. The company also manufactures 210 denier for fish nets. Sources in the industry say Garware is the eighth company to shut down its PFY production following "dumping by foreign firms and cut-throat competition in the domestic market".

Garware Nylons has been referred to the Board for Industrial & Financial Recons- truction (BIFR) after incurring losses of Rs 211 crore in addition to more than Rs 50 crore owed to banks.

 

"As no bank was willing to give us the badly needed working capital, we were not able to make use of our optimum capacity that forced us to almost shut down production," a top official of the company told Business Standard.

Besides, cheap imports from South Korea had made production of PFY a non-viable business, he said.

From Rs 160 a kg of PFY three months ago, prices have dropped to Rs 90 a kg in the domestic market now. But the prices of inputs for PFY, PTA and DMT have come down by only 10 per cent, thereby squeezing margins, the official said.

The company this month failed to pay its workers their full salaries. Workers have been given a salary advance of Rs 500 each. Supervisory and other managerial staff were offered a higher advance of Rs 1,000 each.