Cabinet approves closure of National Jute Manufactures, subsidiary
Wednesday - October 10, 2018 4:36 pm ,
Category : BUSINESS
Cabinet approves closure of National Jute Manufactures, subsidiary
New Delhi Oct 10 (IANS) The Union Cabinet on Wednesday approved the closure of National Jute Manufactures Corporation Ltd (NJMC) and its arm Birds Jute and Exports Ltd (BJEL).
The government made a lot of effort in the past 25 years to keep these two companies up and running. The private operators that came also fled. Hence "the Cabinet has decided to shut down these two companies " Union Law Minister Minister Ravi Shankar Prasad told reporters here after a Cabinet meeting.
NJMC has been incurring losses for several years and was under reference to the Board for Industrial and Financial Reconstruction (BIFR) since 1993 said a statement from the nodal Ministry of Textiles.
The company s primary product was hessian jute bags used for packaging of food grain. Over the years the demand for hessian bags has shrunk. Therefore it is no longer commercially viable to run NJMC.
"Looking at its past performance market conditions and the competition from plastics and the capacity of private jute mills it was noted that NJMC would not be in a position to recoup its negative net worth through operational profits. Also NJMC has no staff or workers on its rolls. Hence the closure " the statement added.
BJEL too has no staff and as the factory is not in operation closure does not have any adverse implications the Ministry said.
"The proposal will help in closing loss-making companies and ensuring release of valuable assets for productive use or for generating financial resources for developmental progress " it added.
The land available with both the companies will be put to public use or other government use for an overall development of the society it said.
--IANS ravi-mgu/shs/vm
The government made a lot of effort in the past 25 years to keep these two companies up and running. The private operators that came also fled. Hence "the Cabinet has decided to shut down these two companies " Union Law Minister Minister Ravi Shankar Prasad told reporters here after a Cabinet meeting.
NJMC has been incurring losses for several years and was under reference to the Board for Industrial and Financial Reconstruction (BIFR) since 1993 said a statement from the nodal Ministry of Textiles.
The company s primary product was hessian jute bags used for packaging of food grain. Over the years the demand for hessian bags has shrunk. Therefore it is no longer commercially viable to run NJMC.
"Looking at its past performance market conditions and the competition from plastics and the capacity of private jute mills it was noted that NJMC would not be in a position to recoup its negative net worth through operational profits. Also NJMC has no staff or workers on its rolls. Hence the closure " the statement added.
BJEL too has no staff and as the factory is not in operation closure does not have any adverse implications the Ministry said.
"The proposal will help in closing loss-making companies and ensuring release of valuable assets for productive use or for generating financial resources for developmental progress " it added.
The land available with both the companies will be put to public use or other government use for an overall development of the society it said.
--IANS ravi-mgu/shs/vm
