MH Mills to reduce manpower for saving production costs
April 22, 2008 - India
Textile companies in Gujarat are heading for cost cutting measures to reduce the impact of rupee appreciation and rising prices of oil and cotton.
One of the most opted measures includes rationalization and reduction of manpower to bring down the cost of production.
In an exclusive interview with Fibre2fashion
, Mr Biren Parikh, Managing Director of Ahmedabad based MH Mills stated, “We are planning to offer VRS to 200- 250 employees and purchase cost-effective power equipments that can save as much as 25 percent of the power costs. This will be done after ensuring proper planning and following legal practice like giving notice to the employee and arranging for the funds. The company will shell out about Rs5 crore in all for the purpose.”
Mr Biren affirmed that the some of the major cost cutting measures on the priority list of the company includes reducing wage bills, cutting down on excessive power and purchasing raw materials in bulk when offered at a low price. He also added saying, “Raw materials we purchase from outside are mainly color chemical, polyester and staple fiber and all these require oil for their production. So, if the overall oil price goes up, it is bound to affect us indirectly.”
Mr Parikh confirmed that the company is taking up the task of creating a young team by bringing down the average age of the workforce from 54-55 to 48 in the next one year’s time.