New Delhi: A group of ministers (GoM) led by agriculture minister Sharad Pawar will meet this week to discuss reopening more than a dozen mills belonging to National Textiles Corp. Ltd, or NTC, and how to attract private investment as part of an effort to revamp the troubled state-run entity.
Testing market: NTC House, headquarters of National Textile Corp (Maharashtra North) Ltd, in Mumbai. NTC is modernizing some mills on its own and is also exploring setting up new factories. Photograph: Hemant Padalkar / HT
NTC has already signed 51:49 joint venture agreements with Alok Industries Ltd, Pantaloon Retail (India) Ltd of the Future Group, and Bhaskar Industries Ltd to run five of its 52 ailing mills on 33-year leases.
At Thursday’s meeting, GoM will discuss approving similar ventures for more than a dozen other mills that have already attracted interest from companies such as Bombay Dyeing and Manufacturing Co. Ltd and Nagareeka Exports Ltd, according to a textiles ministry official.
“We are finalizing the agenda of the meeting to give a professional touch to the mills,” said the official, who is familiar with the restructuring process and didn’t want to be identified. “The idea is to throw them open and test the market.”
Also at the meeting, the textile ministry is expected to seek GoM’s approval to invite expressions of interest from companies to participate in joint ventures with the corporation involving more mills, this official said.
The corporation is modernizing some mills on its own, and is exploring setting up new factories to tap growth in the $47 billion (Rs1.98 trillion) textiles industry, which is expanding 8-9% every year.
Ministers expected to attend Thursday’s meeting include finance minister P. Chidambaram, labour and employment minister Oscar Fernandes, heavy industries and public enterprises minister Santosh Mohan Deb, and law and justice minister H.R. Bhardwaj.
NTC has been hurt by depleting budgetary support and inflexible labour laws that saddled it with an idle workforce, forcing it to seek private sector capital infusion to turn around its operations. The corporation has already spent Rs2,000 crore to pay for voluntary retirement to some 58,000 employees; it still has a workforce of 13,500.
Consulting firm Deloitte Touche Tohmatsu’s Indian unit has been appointed as the adviser on the proposed joint ventures. NTC has also hired consultancy Technopak Advisors Pvt. Ltd to prepare a project report on three new textiles factories proposed to be built in Maharashtra and Gujarat.
“Many of the mills are located in prime land, which has not been utilized. Now, the land will be able to generate cash for the corporation,” said Ashish Dhir, associate vice-president at Technopak.