Iibi Asked To Update Njmc Deal

The Board of Industrial and Financial Reconstruction (BIFR) has asked the Industrial Investment Bank of India (IIBI) to update the Rs 253.92-crore rehabilitation package for National Jute Manufacturers Corporation (NJMC) within a month taking into account the fall in prices of raw jute and finished goods.

"BIFR wants the package to be updated, taking December 31 as the cut-off date," said L K Tripathy, chairman-cum-managing director, NJMC.

While the prices of raw jute fell from Rs 18,000 per tonne to the current level of Rs 7,000 per tonne during this period, the prices of finished goods came down by Rs 3,500 per tonne, he said.

 

The revival package of the company, which had earlier been updated from Rs 182 crore to Rs 253.92 crore, although scheduled to come up for hearing before the BIFR, is being continuously deferred.

After IIBI, the operating agency, updates the package, it will have to await government approval before the BIFR can take up the case.

The present revival package, which is going to be updated, seeks a daily production of 392 tonnes in 1998-99 and cut in manpower from 21,851 to 18,411 through voluntary retirement scheme.

It proposes details of funding the project and changes in the company's product mix with carpet-backing 15 per cent (10 per cent), hessian 20 per cent (19 per cent), sacking 60 per cent (70 per cent) and export yarn 5 per cent (1 per cent).

NJMC, which runs six sick nationalised jute mills namely, National, Kinnison, Khardah, Alexandra, Union and Rai Bahadur Hurduttroy Mills, incurred losses worth Rs 83 crore in 1996-97 against Rs 87 crore the previous year.

Its turnover increased to Rs 187.40 crore (Rs 173.94 crore). According to Tripathy, the machineries in the mills being obsolete need to be renovated.

NJMC accounts for 15 per cent of total workforce of the jute industry and 10 per cent of the industrial production.

Some other reasons for loss in the company are delayed implementation of the earlier revival scheme, uneconomic product mix, uneven increase in costs without commensurate increase in selling prices and power problem.