Anglo-French Textiles mills yet to come out of severe crisis

In a shambles: The prestigious Anglo-French Textiles mills was closed in 2013 as it incurred losses for many years.   | Photo Credit: S. S. KUMAR

It was in 2013 that the management of the government-run Anglo French Textiles (AFT) mills declared a 45-day layoff causing concern among its hundreds of labourers. More than five-and-a-half years after the mill stopped operations in its A, B and C units except spinning unit, more than a century-old textile mill is now in the throes of a severe crisis with its net worth on the downward spiral.

Two expert committees constituted by the Puducherry Government in 2017 and 2018 to go into the causes of sickness of the mill and to look into its rehabilitation had submitted their recommendations. However, the government had not taken steps to modernise the mill, offer jobs to the workers and revamp the undertaking, which is in a critical condition, said a trade union leader.

One of the few surviving industrial vestiges from the colonial era, the Anglo-French Textiles, once known as Rodier Mill, was established in 1898 by a firm with its headquarters in London. In 1899, the mill was even provided with a railway branch line connecting the Puducherry-Villupuram railway mainline to facilitate freight movement and went on to become a major exporter of cotton fabrics to the U.S., the U.K., France, Italy, Germany, Australia and Belgium.

The government of Puducherry took over the company in 1986. However, in recent years, it had been downhill journey for the company, thanks to huge losses.

Its negative net worth had aggregated to ₹207.13 crore and funds were not available to meet even the day-to-day expenses.

Sale of land

The mill has remained closed since 2013 following mounting losses, rapid erosion of net worth of the company, and prevailing labour unrest because of non-payment of statutory dues to employees.

A top government official said while the Madras High Court had allowed the sale of land to help the management pay gratuity to the workers, the Union Home Ministry had not given its clearance. As against the strength of 4,000 employees in the past, the manpower had been reduced to 700 workers.

An employee of AFT said the cost of production had increased manifold and was now six times that of competition.

“Most machineries in the AFT Mill are outdated and the newest machine was 20 years old.

Most buildings situated in ‘A’ unit have been declared unsafe by the Inspector of Factories for employees to work. Although the government decided to sell the timber and other material in the dilapidated buildings, the move was dropped following strong resistance from the workers,” he said.

From 1985-86 to 1992-93, the Pondicherry Textile Corporation had earned marginal profits. Subsequently, it had started incurring losses.

The government had released ₹367.35 crore as share capital and ₹275.60 crore as grant-in-aid till September 30, 2018.

The public sector undertaking, which earned marginal profits from 1985-86 to 1992-93, started incurring heavy losses over the years.

This resulted in drastic reduction of grant-in-aid and share capital and the present assistance was used for payment of compensation for lay-off only and not adequate to run the mill.

The machineries were old and without modernisation, it was very difficult to run the mill effectively.

Blatant administrative transgressions committed by non-political chairmen and senior IAS officers who had held the reigns of the mill in the past had led to its present status, sources added.

“Around 55 acres of land in Pattanur in Villupuram district, quarter of an acre in Thengaithittu and 1.5 acres of land at Thirubhuvanai in Puducherry were all estimated at ₹73.38 crore. The total liability to be settled by the mill is ₹166 crore. But the move to dispose of over 55 acres of land belonging to the mill in Puducherry and neighbouring Tamil Nadu by way of public auction would only fetch ₹80 crore which will be insufficient to settle all the dues,” said an official.

According to R. Viswanathan, former MLA of the Communist Party of India, “decades of mismanagement and poor policy of successive governments had led to the present condition. AFT is a composite mill and the machines including copper bearings which are in perfect working condition were sold for a meagre price and are now being used by textile manufacturers in Tirupur and Coimbatore in Tamil Nadu.

“The government should take steps on a war footing to sell 59 acres of land at Pattanur, which was bought with the profit earned by the mill in 1990. The unions had already submitted in writing to sell the land to settle VRS dues, pending salary and others,” he said.

Deep financial crisis

The mill suffered serious damages following the Thane cyclone in 2011. Despite steps taken to renovate the mill, the management had to face continuous loss and financial crunch.

The Employment Provident Fund Organisation classified the bank accounts of the mill as non-performing accounts as the mill failed to pay the provident fund of workers.

The management had not settled the gratuity with interest to the tune of ₹43.83 crore for 990 employees as on June 30, 2018.

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Printable version | Mar 4, 2021 10:44:47 PM | https://www.thehindu.com/news/cities/puducherry/anglo-french-textiles-mills-yet-to-come-out-of-severe-crisis/article28430745.ece

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