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Vanaja Textiles to shutdown due to insufficient capital

16
Jan '07
Kerala's oldest textile firm Vanaja Textiles Ltd will be shutting down permanently. Main reason for closure is the deficit of working capital.

Mill is situated at Kurichikkara in Thrissur district and it has a labour strength of 500. Decision to sell the mill was taken at a meeting called by Regional Joint Labour Commissioner in Ernakulam.

Vanaja became operational in August 1951. Owing to less cotton demand and rise in wage costs, raw material prices and electricity charges, mill took redundancy measures in April 2003.

It was also decided in the meeting that if a worker submits resignation, he will be given gratuity and compensation at the rate of 13 days a year. Once all compensation is paid, company's sheds and machinery will be disassembled.

Proposal of a revival package put forward by some employees was turned down by the mill. If wages were frozen and liabilities restricted, then this package could help achieve net profit of 10.6 percent according to them.


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