Wednesday, November 30, 2011

Largest paper mill closing

CHITWAN, Nov 30: Bhrikuti Paper and Pulp Limited, the largest paper mill in the country based in Gaindakot of Nawalparasi district, will be shut down permanently.

The paper mill is owned by the Golcha Organization. The company was established in 1985 with the support of China. It was privatized in 1992 and Golchha Organization has been operating the factory ever since.

The annual general meeting of the company held on October 24 endorsed the special proposal of the management to close down the factory. Following the approval, its management has filed an application with the government through the Department of Labor (DoL) asking permission to lay off all its staff.

Workers, meanwhile, vented ire against the government and the factory promoters for showing little seriousness in continuing the factory operations. Some of the workers even claimed that the promoter of the factory is planning to develop its land into housing.

The paper factory halted productions in March this year, citing shortage of raw materials, over 16 hours of power-cut, and decline in demand of paper it produced, among others.

The management said the factory was operating undercpacity for years. The factory had an installed capacity of producing 80 tons of paper a day.

The factory is employing 485 workers, including 333 permanent employees. However, after the management realized that there was little chance of reviving the business, it laid off around 150 temporary workers hired on contract.

Following the AGM decision on October 24 that allowed the promoter to permanently shut down the factory after clearing all loans liability, the management on October 30 lodged an application at the DoL, seeking its permission to lay off all remaining staff members.

On November 22, the management further issued a notice that the factory would not be able to pay salary to 333 permanent staff for the period of eight months when it remained out of operation. The announcement, however, has drawn serious protests from the workers.

"The denial of the management to pay salary from the day the machines were turned off is against the existing law," said Ram Sharma, coordinator of Workers´ Protest Committee. The committee has requested the Labor Office to freeze the land owned by the industry until it pays staff´s salary dues.

Prior to the closure, the industry was producing as much as 1,530 tons of paper a month. It was selling paper at around Rs 60,000 per ton.

"The closure of the factory has forced the country to import an additional Rs 90 million worth of paper every month," said an official at the factory, requesting not to be named. Its permanent shut-down would increase the country´s dependence on import to fulfill local demand for paper.

There were altogether six paper mills, including Bhrikuti Paper and Pulp, operating in the country and together they were producing 150 tons of paper every day. The productions, however, was sufficient only to meet half of the demand, which is estimated to be around 300 tons a day.

Published on 2011-11-30 02:10:30

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