Guwahati, Monday, October 14, 2002
| APOL faces crisis due to lack of finances, raw materials By A Staff Reporter GUWAHATI, Oct 13 — The Assam Polyester Cooperative Society Ltd (APOL) is in a quagmire. It has not been able to pay salaries to its employees for the past three months. Due to shortage of raw materials resulting from the lack of working capital, the APOL textile mill at Tulasibari, Rangiya has also been only about one-fifth of its capacity since July last. Meanwhile, efforts are on the part of the APOL management as well as the State Government to settle the issue of loan repayment with the financial institutions like the IDBI, ICICI and the NCDC. The State Government has already settled the issue of loan repayment with the Industrial Finance Corporation of India (IFCI), on behalf of the APOL. The State Government has also declared the APOL as a relief undertaking in order to implementing a rehabilitation package as per the provisions of the Assam State Industrial Relief Undertakings (Special Provisions) Act 29 1984. But, the entire amount was spent on paying salaries to the employees of the enterprise for the month of June, 2002. The APOL, after the revision of pay-scales of its employees with effect from April, 2000, now requires between Rs 38 lakh and Rs 40 lakh in a month to pay salaries to its about 1,000 regular and about 300 casual employees. The decision to spend the said loan amount on salaries, led to serious differences of opinion among the APOL directors and the differences reached such a state that one of the directors tendered his resignation in protest. In fact the APOL has been facing a shortage of working capital since its inception. This is due to the lack of commitment of the nationalised banks towards industrial development of the NE region. The State Government also is responsible, as it has not shown sincerity to assess the situation and to come forward with a supportive approach, said sources in the APOL. Shortage of working capital resulted in the underutilisation of capacity in both the spinning and weaving units of the enterprise. But till 1997, the enterprise was running without any cash loss, and gradually it was overcoming the hurdles of shortage of raw materials, power, skilled manpower and an adverse atmosphere in the market. Initially, the demand for APOL products was only for a short period of four months in a year in the market. But product diversification and consistent effort on the part of its management, gave APOL an extended market of eight months annually, which is at par with other such enterprises of the country. The State Government on July 4 last appointed a three-member high-power committee with Sri RC Barua, promoter director of the APOL, as its chairman, to look into the problems facing the enterprise and to suggest remedies for its rejuvenation. The committee, in its interim report on July 16, suggested, among others, that the State Government should “consider release an amount of Rs 40 lakh immediately”, to the APOL against its receivables from the Government “as a loan to be utilised for purchase of raw materials only” and the APOL should “submit documents to prove such expenditure to the committee”. The APOL Board of Directors (adhoc) was reconstituted by the State Government in the same month with Sri Barua as the chairman. The BoD met at the AIDC conference hall on August 6 last. In the meeting, one of the directors pointed out to the fact that the APOL was on the threshold of closure with no raw materials, with over Rs 900 lakh of current dues. He wanted to find out ways and means of meeting the upcoming salary burden with 20 per cent to 25 per cent production. But with practically no discussion on these points, the BoD meeting came to an end, said the minutes of the meeting. To bail out the enterprise of its present crisis, some circles suggest that the State Government should release the budgeted amounted of Rs 45 lakh to APOL in a speedy manner for procuring raw materials. According to sources, APOL still has the viability to earn cash profit of around Rs 20 lakh per month at 75 per cent of capacity utilisation under normal market condition. If this state can be achieved, APOL will be able to take care of its liabilities over a period of three to four years, the sources said. But APOL today needs the support of a sound rehabilitation package from the financial institutions and the State Government also should come forward to facilitate it, said the sources. Meanwhile, possibilities of deriving benefit from a Union Government policy for revitalisation of the textile sector in NE region are also being explored through an agency of the Union Government, the sources said. The employees of the enterprise have also agreed to revert to the pre-revised pay-scales, while efforts are also on to reduce the load on APOL resources, the sources said. |
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