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Sunday, January 17, 2010

‘Will Cachar Paper Mill meet the fate of Cachar Sugar Mill?’

Deshmukh lays stress on increased production of Cachar Paper Mill

Special Correspondent

SILCHAR, Jan 17: Minister of Heavy Industries and Public Enterprises Vilas Rao Deshmukh, after reviewing the functioning of Cachar Paper Mill in his conclave with executive director and other top officials of the plant which was followed by his interactions with the leaders of various union bodies today at Panchgram guest house, laid stress on increased production of quality paper. He also inaugurated the xerox paper unit of the mill.

He, however, did not spell out any specific action-plan to streamline the only industrial unit of this valley which has been plagued by mismanagement, financial indiscipline, irregularities in the procurement of bamboo and lack of scientific planning.

Cachar Paper Mill which went on commercial production from April 1988 has been facing intermittent crisis due to lack of bamboo supply and non-marketting of finished products, raising question about its future. The mill was installed with a capital outlay of Rs 384 crore to produce 1 lakh mt of writing, printing paper and newsprint per annum.

“Open market policy” of the Centre has been blamed for adversely impacting the mill as the price of foreign-made paper is far cheaper than produced here. In order to offset the mounting losses, the mill experimented with the concept of producing xerox paper, demand for which is very high in Northeast. The Minister hoped that with the commissioning of the machine for production of xerox paper, it would bring profit to the plant.

The Ministry in its appraisal report of October 2004 identified high overheads, low technological profile, dwindling working capital availability and swift changes in product-processes ushered in by a fast globalizing economy. The report also said that the Ministry had allotted Rs 235 crore during the year for mordernisation of the mill. The strategy adopted by the mill was to engage a Canadian consultancy firm for updated technology application and to upgrade methods to reduce loss, conserve coal and energy, improve quality of paper and increase output with economy.

The management was impressed upon to embark upon a comprehensive financial operational, technological and organizational structuring to put the mill on a sustainable revival path and to make the most of the substantial assistance from the government. It was expected that the management would ensure synergy of efforts to improve the quality and quantum of production and effect economy to make its operations competitive which alone could bring about a comprehensive and sustainable turn around.

The mill had started earning profits from 2001. During 2003-04, it reached the optimum level of production of 97, 376 metre. In 2004-05, it was poised for even better performance. But instead, the mill since then continues to incur losses and a source adds to say that huge stocks of paper have been lying undisposed as the paper produced here can not stand the competitive market. Secondly, for want of bamboos, the mill could operate at a capacity of 65 per cent during 2008-09 which has come down to 50 per cent capacity in the current year due mainly to shortage in the supply of bamboo as stated by Minister of State in the Ministry of Commerce and Industry Jyotiraditya M Scindia, in reply to the questions of BJP MP Kabindra Purkayastha raised by him in the last parliamentary session.

Scindia had also pointed out that there was a problem in the availability of pulp quality bamboo in Barak Valley mainly because of gregarious flowering of muli bamboo in North Cachar Hills. About 70-80 per cent of bamboo available in Mizoram is also muli bamboo affected by flowering called mautam. Other reasons for poor availability of bamboo, he explained, are insurgency, poor rail infrastructure, frequent landslides and floods.

He added to say the management has taken several steps to improve the situation which include procurement of home grown bamboo and pulp wood, use of recycled fibre, purchase of indigenous pulp from Andhra Pradesh, import of pulp from Indonesia, supply of bamboo from lower Assam through river route across Bangladesh. Apprehensions are being expressed by observers: Will Cachar Paper Mill meet the fate of Cachar Sugar Mill? THE SENTINEL

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