Taskforce recommends shutting down two mills

05 Mar '09

2 min read

A task force was set up last month to suggest and recommend measures on whether to resume operations of the closed Butwal Spinning Mills and Biratnagar Jute Mills, to which the task force has opined to shutting them down completely as one of the first options.

The government has a 56 percent stake in Butwal Mills and 47 percent in Biratnagar Jute Mills, which have closed down since the last few months and the Biratnagar Mill used to employ around 3,500 workers not so long ago.

The task force has advised to lay-off workers temporarily, till a final decision on the matter of revival is taken by the government. Biratnagar Mills has already laid-off half its employee strength by paying them fifty percent of their salaries.

The task force advised closure, as the mills are saddled with very old machinery and carry very high operational and labour costs, leading to losing their competitiveness. An average Nepali jute worker earns Rs 190 per day compared to an Indian worker earning Rs 125 per day.
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The government will have to spend Rs 720 million to revamp and restart the two mills and alternatively Rs 830 million if they are taken in to liquidation, to pay all pending salaries, benefits and outstanding of the two mills, added the members of the task force
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Fibre2fashion News Desk - India

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