THIRUVANANTHAPURAM: English Indian Clays Ltd (EICL) is staring at an uncertain future due to the economic fallout of Covid and the ban on clay mining, a crucial raw material for its operations. The company has suffered a substantial fall in market share and drop in sales, thereby incurring a huge financial loss. The company is also quite apprehensive of making future investments in the state. Investments have been channelised to Gujarat, where operations have commenced.
“The future of the company in Kerala appears pretty bleak due to the lack of permission to mine for our raw materials. This had resulted in losses, both in terms of profit and market share while also leading to a complete loss of confidence in making further investments in Kerala,” a senior company official said in a statement.
If things fail to improve, the company fears that the operations at its Thonnakkal factory might meet a fate similar to the one which befell its Veli unit. Clay mined from Thonnakkal has been found wanting both in terms of quality and quantity for sustained operations, thanks mainly to the restricted permit for mining activities. The fall in market share has had a cascading effect worsening the situation further, the statement said.
“Unfortunately, the situation is proving to be highly stressful to the workers as well. The company had already taken up the case with the government at various levels. But the situation still remains fluid and sub-optimal with the shortage of raw material continuing to pose a serious challenge. If there were no positive development in the near future, the Thonnakkal unit is likely to go the Veli way,” said the official. The company’s operations had been adversely hit in the last couple of years on account of the continuing shortage of the raw material. This eventually led to the closure of the factories at Thonnakkal and Kochu Veli in August 2020.
Future imperfect in state?
The company has suffered a substantial fall in market share and drop in sales, thereby incurring a huge financial loss.
It is also quite apprehensive of making future investments in the state.
Investments have been channeled to Gujarat, where operations have commenced.
The company fears that the operations at its Thonnakkal factory might meet a fate similar to the one which befell on its Veli unit.