Government to revive three closed jute mills to revitalise NJMC
19 March 2010
The government proposes to revive and expand capacity of three jute mills and close three others under a revival plan for the National Jute Manufactures Corporation (NJMC) Ltd.
The union cabinet today approved a proposal for reopening of three mills of NJMC out of total six closed mills under the corporation. This will lead to an additional production of jute products and value addition, a government release said.
The mills proposed to be revived are the Kinnison and Khardah mills in West Bengal and the Rai Bahadur Hadrut Mill in Katihar, Bihar. The remaining three mills - National, Union and Alexendra - will be closed, the release said.
Post revival the three mills together would have an annual capacity of 82,500 tonnes of packaging material. This will meet about 8 per cent of the total demand of the jute packaging material by government agencies, the release said, adding that these mills would be operated as model modernised mills.
The revival schemes provide for additional budgetary support in the form of interest-free loan for implementation of revival scheme. NJMC can use internal accruals as also proceeds from the sale of the three closed mills to repay the government loan.
The government will soon move the Board of Industrial and Financial Reconstruction (BIFR) with a revival plan for NJMC.
The government said its loan would have the first charge on the receipts from sale of NJMC's assets. Government, the release said, has already spent about Rs1,067.66 crore on giving VRS to about 17,000 workmen and 930 clerical staff apart from settling various statutory dues etc.
The revival plan also includes a provision for voluntary retirement scheme (VRS) for officers and staff.