Closure of TAC is illegal, says Thoothukudi collector

Published: 02nd July 2013 09:30 AM  |   Last Updated: 02nd July 2013 09:30 AM   |  A+A-

Embattled Thoothukudi Alkali Chemicals and Fertilizers Ltd (TAC) faced legal action on Monday with Collector Ashish Kumar describing its lockout notice, issued on June 27, as illegal. Kumar has already instructed the Inspector of Factories and SP Durai to take the company to court.

Besides, action would be taken against the TAC management under the Industrial Disputes Act and Factories Act for closing the plant without prior information.

At a meeting convened by the Deputy Commissioner of Labour to sort out the row on Monday, management representatives Parameshwaran and Surender insisted that the plant could not be operated, adding that were ready to face the consequences in court. They also said that the company had filed a case to defend the lockout notice.

CITU State general secretary Russel demanded that the government take over the company. He also wanted district officials to ensure that the employees received full salaries for May.

Production at TAC, a subsidiary of SPIC, stopped on March 1 and its lockout was announced on June 27. Ever since, employees have been on fast demanding that the government take over the plant.

For its part, the TAC blamed lack of carbon dioxide, a key raw material, for the lockout. It sourced carbon dioxide from SPIC’s fertiliser plant, which itself had to be shutdown for want of naphtha, a raw material.

“SPIC is in the process of changeover of the feed stock from naphtha to natural gas. After the changeover, the requisite quantum of carbon dioxide will not be available and the company will be solely dependent for ammonia from imported sources,” the TAC said in a statement. The international market price of ammonia has gone up abnormally, making the unit unviable for operation, it added.

TAC was declared a sick unit by the Board for Industrial and Financial Reconstruction (BIFR). The company’s net worth has completely eroded and the accumulated loss, which was Rs 127.76 crore in 2011-12, has gone up to Rs148.93 crore as on March 31. The company incurred a loss of Rs 21.17 crore during 2012-13.

Operations at the plant have been frequently interrupted in the last few years. It was shutdown for 42 months between March 2006 to October 2010, which hit maintenance work.


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