KOCHI: In yet another jolt to Kerala's business environment, English Indian Clays Ltd (EICL), which has been operating in the state for the last 57 years, has decided to shut its operations due to the "unnecessary delay" in sanctioning mining permits and "bureaucratic hassles", making its venture unviable.
"The board had given the local management two months' time to see if things can be turned around. The deadline is getting over in another 12-15 days. We are more or less decided to pack up and go," said Mahesh S, deputy general manager, EICL.
The immediate issue relates to 2.5 hectares of virgin land for China clay mining in Thonnakkal in Thiruvananthapuram district, where the company says it had received three key permissions -- pollution board, green tribunal and from the local panchayat -- on October 10 last year. Yet, even after a year, the Kerala government's Department of Mining & Geology (DMG) has not given approval. "For one year, we have not been able to do anything. Now, we will have to get the permission again next month," said Mahesh. "That's not worth it, if we can't get the DMG nod."
It's not just the virgin land for mining that's bothering the company. There are also other headaches too. Mahesh said due to "legal tussle" the company's leases to mine at Thonnakkal were stopped by the DMG. In addition, applications for virgin mines at Kollam and Mullassery are pending at the Letter of Intent (LoI) stage in the last six months.
EICL closed down its factories in Kochu Veli and Thonnakkal on August 10 as it could not run the operations without the mining permissions. The company has also been running on losses for the past two years. If the company finally shuts its operations in Kerala, it would be the end of the road for 1,500 people, who are employed directly and indirectly by EICL.
Mahesh said EICL had submitted applications to different departments concerned for permission for mining on July 15, 2019. The decision by the Thapar group company to exit the state is a big blow to the state which slipped from 21 position to 28th in the latest 'Ease of Doing Business' rankings.
EICL was founded by a school teacher in Thiruvananthapuram in 1963. Later in 1992, the Delhi-based Thapar Group acquired the company. EICL produces key ingredients for a range of industries such as paints, ceramics, rubber, plastics, fibreglass etc. Paints major Asian Paints sources 70 per cent of its requirement from EICL.
When contacted, Mohammed Hanish, Kerala industries secretary, told TNIE that the government is aware of the situation. "We have asked the Mining & Geology Department to speed up the process. The officials of EICL had submitted their grievances to us. We will resolve the issue soon," said Hanish.
Mahesh, however, is not optimistic. "We have been shuttling between one department to another. We can't just go on," he said.
Thapar group's new plant is coming up at Bhuj in Gujarat, and the operations will be shifted to the new plant, said Mahesh, who began as a management trainee at the company in Thiruvananthapuram in 1998.
"Senior management persons like me may have to shift to Bhuj, but others will lose the jobs," he said. About 60 per cent of the work on the Bhuj plant is over, and it can be able to meet the requirements through the clay available at Bhuj, he said.
What makes the Thiruvananthapuram operation key is the clay available at Thonnakkal, which is far superior in quality, said Mahesh. Due to a shortage of raw material and the non-clearance, the company was forced to close operations from August, he said.