Kottayam: The Kerala Industrial Infrastructure Development Corporation (KINFRA) has received the nod to acquire the ailing Hindustan Newsprint Ltd (HNL) located at Velloor in Kottayam district. With the National Company Law Tribunal approving the takeover of the Central Public Sector Undertaking, the Kerala government has cleared the last hurdle in this regard.
The company will come under the ownership of KINFRA once it deposits with the NCLT Rs 146 crore promised as part of the takeover deal.
The HNL, which is now under the Ministry of Heavy Industries and Public Enterprises, will be retained as a PSU even as it changes hands.
Revival plans
KINFRA, which is acquiring the HNL on behalf of the Kerala government, will not operate the company directly. The state government, which has already set aside Rs 250 crore for the takeover and further operations of the company, will constitute an administrative committee to run the HNL. As of now the government has sanctioned Rs 4 crore for the initial operations.
KINFRA has decided to set up a Rubber Park on the HNL land in Velloor.
The KINFRA bid
The Hindustan Paper Corporation (HPC) which began its operations in 1981 was later renamed as the HNL. Though the central government tried to sell off the sick company, the state government opposed the move, following which the move was shelved.
Meanwhile the financial institutions which had given loans to HNL approached the NCLT demanding that the company be sold and their dues cleared at the earliest. Subsequently, NCLT appointed Kumar Raj as the Resolution Professional for the sale of the company. The resolution professional put the company for sale for Rs 360 crore. KINFRA which took part in the auction on behalf of the state government quoted Rs 146 crore for the takeover.
The salary dues of employees alone alone accounts for more than Rs 100 crore.
Sigh of relief for locals, workers
Velloor: With the government taking over the HNL, decks have been cleared for not only revitalising the company but also for the overall development of the Velloor region.
This industrial township on the banks of Muvattupuzha river fell on hard times of late as the HNL stared at closure as production declined and eventually the company was shut two years ago. The latest development has come as a breather for local residents and HNL employees.
The workers and local residents are also waiting eagerly for the return of the past glory of HNL Township.
"The government decision brings hope and happiness. The pending salary dues should be cleared at the earliest. Production should be resumed soon. We hope steps will be taken to implement projects like the Rubber Park" said K S Sandeep, the Secretary of HNL's unit of the CITU.
Past glory
Velloor village turned into a township after the erstwhile HPC began its newsprint factory here in 1982. At that time the state government had acquired 700 acre from farmers and handed it over to the PSU.
The company used to produce 300 tonnes of pulp daily. Bamboo reed (eeta) and eucalyptus were turned into pulp at the factory for making newsprint.
At one point of time the township was brimming with activities. A number of banks, shops, business establishments and supermarkets functioned in the township. The people of the township used to wake up listening to the company's siren every morning. And those were times when people considered a job in HNL as privilege.
However, the company was shut down on January 1,2019 as debts increased by the day. It affected the local economy badly. A large number of establishments in Velloor and Koolkulam panchayats were dependent on HNL.
Of the initial 700 acre with the HNL, the newsprint company is functioning out of 200 acre. In the remaining land staff quarters, school, waste management plant and associated establishments are located.
At the time of closure, the company had 453 employees, 700 contract staff and 300 apprentices.
The family members of the staff staying in the quarters have been facing a host of problems for the past two years. The staff worked even on Onam without getting even a single penny.
Proposed rubber company raises hope
The government has announced in the budget that it would set up a rubber company on HNL land in Velloor. It will be set up on the lines of Cochin International Airport Ltd, a pioneering public-private partnership model in the country.
The government scheme envisages use of a portion of the 700 acre for the rubber company. Besides, the government is also planning to use the land for other ventures.
The government believes that rail connectivity, availability of land and water will greatly help in the future development of HNL.
"We welcome the government decision to take over the company. The pending salary dues of the employees and workers, who have been facing extreme difficulties for the past two years, should be cleared," Sujith Surendran, an INTUC member and Secretary of the HNPCEA, demanded.
"The government decision is welcome. The setting up of projects like Rubber Park will bring more employment opportunities," Jerome K George, general secretary, of the HNLEA hoped.
