Sirpur Paper to suffer production loss due to strike

In an interview with CNBC-TV18, Ranjan Kumar Poddar Chairman of Sirpur Paper spoke about the latest happening in the company and the sector.

Here is a verbatim transcript.

Q: Your company is having a major expansion plan on the anvil from 83,500 tonne per annum on the anvil, raising it to 1,38,000, take us through what does this cost and whether all this money is in the bag and will you be tapping the markets?

A: We are not going to be tapping the market any more. The plant is already commissioned and the benefits that have been given to us from the Andhra Pradesh government are two-fold. One is under the industrial incentive scheme, we get a power incentive and we have also been accorded the status of a mega project company, which would mean that we get 75% refund of sales tax which is payable by the company for the next five years. We also get power at a fixed rate of Rs 3 per unit, today is costing us Rs 3.20 per unit which means that we will get a subsidy or benefit of 20 paisa per unit of power purchased from the Andhra Pradesh government.

Q: When did this incentive kick in, you have done an operating profit margin (OPM) of 18% for the last reported quarter, you think you will be able to improve on that?

A: Yes we haven’t taken into account the mega project benefits because the permission only came recently and that is going to be accounted for probably in this quarter for the last financial year and maybe towards the end of this financial year or for the current financial year. The benefit would be about Rs 12-15 crore in the course of five years and necessary application to that effect has already been made with the AP government.

Q: Can you update us on the illegal strike that the workers have resorted to or at least in the press release you have mentioned that about the strike, so what is the status on that and whether that a will result in some production losses?

A: Yes there is definitely going to be a loss in production. The contract workers which are about 1,000 in number went on an illegal strike from October 31 and they are still on strike.

Q: What part of your production is impacted?

A: The entire production because we cannot run the factor without contract workers—inwards materials are stopped, dispatches are stopped and production at 8 machines all have come to a stand still.

Q: Any negotiations under way, are you seeing any end to the impasse?

A: Nothing yet, our stand is very clear that we have given the so-called leaders of the contract workers, we have told them to resume duty and then to come on the negotiation table. They don’t have any unions so they are not permanent workers and so it is not a negotiation with any permanent union but because of the illegal strike we have told them to resume work and then we will consider their demands and look into it sympathetically and possibility with a favorable inclination.