Financial Daily from THE HINDU group of publications
Tuesday, Oct 08, 2002
Financial Daily from THE HINDU group of publications Tuesday, Oct 08, 2002 |
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Corporate
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Trade & Labour Unions `Law & order problem' — Fort Gloster suspends work at head office Kohinoor Mandal
KOLKATA, Oct. 7 A NOTICE announcing suspension of work has been issued at the head office of the ailing cable manufacturer, Fort Gloster Industries Ltd. This company, which pioneered XLPE cables in India, is currently owned by Mr Shree Kumar Bangur. According to Mr V. Duggal, Executive Director, the suspension notice was issued because there was a law and order problem in the office. However, the manufacturing unit, which is located in Bowreah in the Howrah district, is functioning normally. Agitating employees outside the head office of the company said, however, that the management had called representatives of the employees association for a meeting on their earned leave position, but they found the suspension of work notice instead. The employees said the company had become irregular with regard to payment of statutory dues. This apart, 23 factory supervisors had been issued termination letters on a month's notice. "No bonus was paid in the last two years but a salary advance on the occasion of the Pujas was given on Saturday last. The salaries are also being paid quite late in the month," Mr D.K.S. Trivedi, Deputy General Manager, said. Mr Duggal clarified the company's position. "I should not say that there are irregularities in the statutory payments of the employees but certainly there are some delays. This is due to the tight cash position. We need to procure raw materials regularly for production,'' he said. Fort Gloster was set up in 1889 as a jute company. The cable business was begun in 1958. Sometime later, the Bangurs got management control of the company. In the mid-nineties the two businesses were divided between the two Bangur groups. At one point, Fort Gloster had a technical collaboration with Sumitomo Electric Industries. In September 2001, Fort Gloster Industries was referred to the Board for Industrial & Financial Reconstruction (BIFR) when it was declared sick. For the year ended March 2001, the company's net loss was Rs 7.33 crore on a turnover of Rs 85 crore. The equity base is Rs 12.15 crore. According to Mr Duggal, the two major retarding forces on Fort Gloster are huge interest burden and labour cost. The company has initiated dialogues with its major bankers, Allahabad Bank and Punjab National Bank, on this account. "Apart from that we have other problems like poor orders, high cost of raw materials, low productivity and failure to delivery goods on time. Moreover, competition has increased and the condition of the major buyer, the State electricity boards, is poor," he explained. Currently, the company is incurring a net loss of about Rs 1 crore every month. Its accumulated loss is over Rs 60 crore. In the last two years, Fort Gloster has reduced its manpower from 2,500 to 1,200.
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