Modernisation spree to boost growth of NTC Mills
National Textile Corporation (NTC) was incorporated in 1968 with the main objectives of managing the affairs of 16 sick textile mills taken over by the Government. NTC took over more sick textile mills under 3 Nationalization/I D&R)Acts, (1974, 1986 & 1995), raising its number up to 125 mills in 1995.
In 2002, NTC was managing 119 mills. According to the modified revival scheme of March, 2006, BIFR approved revival of 52 mills and closure of 67 unviable mils. 67 unviable mills have so far been closed under the I.D. Act after offering attractive VRS to 59,252 employees and paid MVRS compensation of Rs.2132.48 crores.
Two Mills have been transferred to State Government of Pondicherry. Now, NTC has 50 Mills and 100 Showrooms. 22 Mills are under revival by NTC itself. 19 mills are proposed to be modernized through Joint Venture Route and balance 9 mills, where most of the employees have opted for V.R.S., are proposed to be closed.
NTC expects to complete modernization of its 22 mills by itself up to spinning activity by March, 2009. Purchase Orders for new machinery have been placed. So far, an amount of Rs.430.00 crores have been spent on purchase of new machinery and renovation of existing working machines, buildings, humidification and electrification etc.
Amongst 22 mills, 4 mills will be modernized by relocation and as a Green Field Project including Udaipur Cotton Mills proposed to be modernized to produce technical textiles (Geo-textiles)
After modernization, NTC is projected to produce 600 lakh Kgs. of yarn and 250 lakh Mtrs of cloth annually with a turnover of more than Rs.931 crores in the year 2009-10.
Status of Implementation of Rehabilitation Schemes:
•The total cost of the revised scheme is Rs. 5267.56 Crores duly approved by BIFR in the year 2006.
•BIFR has approved merger of its nine subsidiary companies with NTC Holding Company with effect from 1.4.2006.
•An amount of Rs.322.35 Crores has been paid to clear the P.F. & E.S.I. and creditors outstanding dues.
•Paid attractive V.R.S. compensation amounting to Rs.2132.48 Crores to 59,252 employees.
•Old & obsolete Plant / Machinery of closed mills & surplus machinery of viable mills have been sold for a total amount of Rs.304.84 Crores.
•Material of old Buildings have been sold for Rs.77.10 Crores.
•Land sold for a total amount of Rs.3652.14 Crores through Open Tender System.
The funds amounting to Rs.8018.21 crores will be arranged through various sources and the utilization of Rs.7134.12 crores is on various heads of expenditure i.e modernization, redemption of bonds payment of MVRS compensation, payment for working capital and payment of PF, ESI & creditors dues as on 01.12.2008.
As per the 2nd modified scheme approved by BIFR on 05.09.2008 the Spindle capacity will be increased from 6 lakhs to 9 lakhs spindles. Accordingly, the total cost of modernization would be Rs.1155.00 Crores instead of Rs.530 Crores in 1st revised scheme and the total cost of Revised Rehabilitation Scheme would be Rs.9103.00 crores(effective cost of Rs.7075.00 crores) after adjusting the cost of Bonds Redemption.