SHIMOGA: The state government has assured of taking measures to revive Mysore Paper Mills (MPM) from the clutches of the Board for Industrial and Financial Reconstructions (BIFR).
MPM Chairman Araga Jnanendra confirmed to Express that the company was registered with BIFR recently. As the company was reeling under loss for the past 3-4 years, it was referred to BIFR under Section 15(1) of the Act, on the basis of the company’s accounts as on March 31, 2011.
By the end of 2011-12, MPM’s net loss exceeded `235 crore. MPM, a state-owned public sector company, was incepted in 1936.
Both the paper and sugar mills were established in 286 acres along with a township for employees. The company was accorded ISO 14001 certification.
The state government declared a grant of `100 crore to revive MPM during the tenure of former chief minister B S Yeddyurappa. The amount was converted as share capital.
With this additional funds, total capital increased to `218 crore and the government provided bank guarantee too.
“It was a Herculean task to end the mismanagement, but in the past three years it has been streamlined to a major extent,” he said.
He said the cost of production is more compared to private industries. Thus, it incurred a loss of `8,000 to `10,000 per tonne of paper produced.
This was a major jolt the company received while marketing its product, said Jnanendra.
The private companies with the same capacity of paper production have maximum manpower of 1500, he added.
“We need to focus on hiring technocrats and reducing additional manpower,” said Jnanendra.
According to him, the state government was requested to waive the interest accrued on a loan of `100 crore and convert `100 crore capital in the form of shares to refine organisational structure.
“We request the government to announce VRS (Voluntary Retirement Scheme) for employees, which many of them will opt for. Onus is on the management to take MPM from the custody of BIFR by reducing man power, introducing new technology and ensuring good administration,” he said.