Synthite Industries threatens to exit Kerala due to Communist unionists
Synthite Industries MD Viju Jacob says his decision is partly because of Kerala’s LDF government’s failure to live up to investors expectations
Bengaluru: Unhappy over pro-Communist unionists disrupting business, Synthite Industries Ltd, billed as the world’s largest spice extract firm, is planning to pack its bags and leave its business in Kerala where it was founded back in 1972.
The company has an iconic status in Kerala, a state that is not quite known to be pro-business and has produced only a handful of billionaires.
Synthite founder C.V. Jacob started his company in 1972 with around ten people and an investment of Rs5 lakh in a small shed in Kolenchery town in Ernakulam district. It now employs more than 2,500 people, with a turnover of Rs1,800 crore and accounting for more than 50% of Indian exports of spice extracts, as per the company.
Viju Jacob, the eldest son of Jacob and the company’s current managing director, said in a phone interview that his decision is partly because of Kerala’s Left Democratic Front government’s failure to live up to investors expectations.
Since coming to power in 2016, chief minister Pinarayi Vijayan had repeatedly vowed to make Kerala investor-friendly, partly because he is faced with a shortage of money to run the state, a move that has made him seem more market-friendly than his Communist predecessors but has earned the wrath of many within the Left, including his partner in power, Communist Party of India.
The problems for the company, as per Jacob, started with the formation of a unit of Centre of Indian Trade Unions, CITU, affiliated to the state’s ruling Communist Party of India (Marxist) or CPM, in December. Shortly afterwards, the union opposed the company’s plans to transfer seven workers to units outside Kerala.
The local CITU union president Arun Kumar paints a different picture. He said the seven employees are active unionists who had managed to successfully negotiate an increase in wages for casual labour from Rs240 to Rs315 per day.
This, among other matters, irked the company and the transfer is a form of punishment, Kumar said over the phone. He alleged that the transfer orders are against labour laws.
Jacob responded, “For the last 45 years, we had no union. This is an instigated union. We got factories in different locations, from Ongole in Andhra Pradesh to one in even China. It’s only a transfer that we are doing, they are not willing to take it. We have transferred people from Kerala to China (before).”
Kumar refutes this by saying that this is the first time company is transferring someone outside the state. It always sent people outside the state on deputation, which the union has no problems with, says Kumar.
Jacob says in the last ten days, agitations have intensified, and it has made him lose faith in Kerala. “They started agitating, putting pandal, started abusing the management. We want to exit is because there is no potential.”
He adds that his efforts to contact the chief minister to resolve the tussle with the unions have not been successful. “I wrote a message to him. The very next day he replied, he said he will give police protection and will ask the labour minister to intervene. But since they are having some meeting in Hyderabad, nothing happened.”
Vijayan is away from Kerala currently for the CPM’s five-day-long party congress.
“I was the person who was invited by the government to talk about Kerala in Delhi about three or four months back. And I spoke that Kerala is a good place to invest, the government is very supportive... Within three weeks down the line, this has happened,” Jacob said.
Jacob says as part of a possible exit, the company has already slowed down its production in Kerala, where it has invested about Rs300 crore, and has started moving raw materials to outside the state-- mostly to Andhra Pradesh “where the chief minister N. Chandrababu Naidu is welcoming us with open hands.”
“Kerala will be closed down, that’s it,” Jacob said.
- RBI against independent regulator for payment systems outside central bank
- Germany’s transport authority orders Opel to recall 73,000 diesel vehicles worldwide
- RBI opens banking tap to ease liquidity crunch at NBFCs
- New RBI norms put mobile wallets on par with payments banks
- Imminent NBFC slowdown could lead to credit crunch
Editor's Picks »
- Policy rethink and higher volumes to aid container shippers
- DCB Bank delivers a strong Q2 but pressure on margins foreseen
- Havells India: Rising costs give a jolt to profitability in September quarter
- All’s well at Mindtree, except for high client concentration risk
- India’s rising steel demand is making companies starry-eyed