The government on Friday said it is planning to shut down the operation of state-owned Hindustan Insecticides Ltd's (HIL) two plants located in Kerala and Punjab due to losses incurred for the last several years.
Minister of State for Chemicals and Fertilisers Bhagwanth Khuba, in his written reply to the Lok Sabha, said: "Yes Sir", when asked if the government proposes to close down the operation of Kerala and Punjab plants of HIL.
He also said that the government is aware of the reports that the salaries of employees have not been disbursed for the last five months.
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To address this, the government has proposed the closure of the two units of HIL i.e Bathinda in Punjab and Udyogamandal in Kerala, he said.
"Accordingly, a proposal seeking funds from the government has been made to cater to meet the expenditure arising on account of VRS/VSS and payment of balance dues of the employees of both units proposed for closure," he added.
Khuba further said the two plants in Kerala and Punjab are "incurring losses for the last several years" and are "unviable" to be operated due to various reasons.
Due to the gradual reduction and ultimate stoppage of DDT production at the Kerala plant, the utility cost distribution to agrochemicals has resulted in a high cost of production, he said.
Moreover, due to locational disadvantage, inbound and outbound transportation costs were "abnormally high". Low capacity utilisation resulted in a high fixed overhead cost per unit, he added.
Whereas the Punjab plant is an agrochemical formulation plant for solid and liquid pesticides.
The minister said the technical grade of pesticides are transported from the company's Maharashtra and Kerala plants and formulated in Punjab, which makes the overall proposition "unviable".
The Punjab plant is also "suffering losses" due to low automation, manual packing, excess manpower and non-availability of raw materials.
"Due to the above-mentioned reasons its operations have become unviable," the minister added.
Asked if the government will consider the redeployment of employees of both plants, the minister said, "No sir".