Hindustan Organic Chemicals Limited (HOCL) has been cleared by the Union Finance Ministry on Wednesday to raise Rs.150 crore through government-backed bonds towards working capital.
Sources in HOC’s Kochi unit said it was a big relief for the former Mini Ratna company, now in the midst of a serious financial crisis with employees and officers not getting their salaries for the last three months.
Save HOC Action Council, a combine of trade unions, which has been spearheading a protest action to draw the attention of the authorities to the plight of the company, has called of the protest following the development in New Delhi.
The employees and officers had been on the path of protest for the last 126 days and had planned to send a delegation to New Delhi to meet Finance Minister Arun Jaitley and Minister of Chemicals and Fertilizers Ananth Kumar early next month.
It is now expected that the HOC would be able to raise the money through bonds backed by the government and production can be resumed within a fortnight.
The once-profit-making unit at Kochi plunged into a crisis after the import of its key products phenol and acetone were liberalised in March 2012. The employees had since then appealed to the Union government to stop what they described as “dumping” of these products in the Indian market by foreign manufacturers.
The unit, established in 1987, has accumulated a profit of over Rs.800 crore over these years. But it sustained a loss of Rs.5 crore during 2001-02. The following years had been bright and rosy for the unit until the financial year 2012-13 when it sustained losses to the tune of Rs.37 crore. The last financial year saw the situation slipping further with the unit incurring a loss of Rs.69 crore.
The HOC unit has an installed capacity of 40,000 tonnes a year for phenol and 24,00 tonnes a year for acetone. The unit has 440 permanent employees and officers and 75 workers on regular contract.
