Will the government reopen our factory? This is the question lingering in the air in Kagaznagar of Adilabad district where nearly 10,000 families are facing troubled times what with the town’s economic mainstay, the Sirpur Paper Mill (SPM), being closed since the last nine months.
“A dozen workers have committed suicide so far. The mental agony is only compounding as it’s time for us to pay our children’s school fee,” observes Ponnam Surender Goud, a wire operator on SPM’s machines 4 and 5, as he tries to reason out why the factory should be reopened at the earliest.
The utterly downcast inhabitants now have a reason to be hopeful about their future as the Telangana State government is engaged in talks with some private industrialists who have evinced interest in running the 75-year-old factory. The residents, especially 3,000 staff and regular and contract workers, are expecting the government to announce the revival of production in the mill sooner than later.
On May 31, a team of five Cabinet Ministers and Sirpur MLA Koneru Konappa held a meeting in Hyderabad with representatives of some companies to evaluate what it takes to revive one of the country’s largest paper mills. Among those who showed interest in taking over the factory is a Czech paper machine manufacturer, PAPCEL, JK Paper Mills and ITC.
According to a proposal, the revival of SPM may require anywhere between Rs. 800 crore and Rs. 900 crore as its liabilities in the shape of bank loans, statutory dues and employee dues are also of that size. The companies have requested the Telangana government to provide a seed funding of Rs. 250 crore by way of grant and interest free loan to settle a part of the outstanding liabilities in order to readjust the remaining.
One proposal envisages arrangement of funds to the tune of 70 per cent of the estimated revival cost through PAPCEL, the equipment supplier and EPC contractor which is supported by a credit line from the Exim Bank of Czech Republic.
The proposals also talk about modernisation of the machinery in order to increase paper production to 2 lakh tonnes per annum from the 1.38 lakh tonnes per annum at the time of closure. Manufacturing Kraft and packaging grade paper can make the SPM go viable as these are in great demand across the globe, the proposal adds.
Now or never
Background: SPM, an integrated pulp and paper mill and one of the largest manufacturers of variety and colour paper, was started in 1938 in Sirpur-Kagaznagar town in Adilabad district
It is now owned by R.K. Poddar and has 2,000 staff and workers on rolls, besides 1,000 contract workers
It has bank liabilities of about Rs. 800 crore, Rs. 100 crore in statutory dues and Rs. 90 crore due to workers
Govt. efforts: Ministers K.T. Rama Rao, Jupalli Krishna Rao, Nayini Narasimha Reddy, A. Indrakaran Reddy and Jogu Ramanna besides Sirpur MLA Koneru Konappa held talks with firms interested in running the mill
Interested company: PAPCEL, a Czech company, has requested the government to give seed funding of Rs. 250 crore in the shape of grant and interest free loan
Consequence: If the SPM is not reopened soon, as many as 1,823 students of the workers cannot attend classes
