The government announced on Friday that it intends to shut down the operations of two state-owned Hindustan Insecticides (HIL) plants in Kerala and Punjab due to losses accrued in recent years.
In his written response to the Lok Sabha, Minister of State for Chemicals and Fertilisers Bhagwanth Khuba said, "Yes Sir," when asked if the government plans to shut the HIL plants in Kerala and Punjab.
He also stated that the government is cognizant of reports that employee salaries have not been paid for the last five months.
To address this, he stated that the government has suggested the closure of two HIL units, Bathinda in Punjab and Udyogamandal in Kerala.
"As a result, a proposal to the government has been made to cater to meet the expenditure arising from VRS or VSS and payment of balance dues of the employees of both units proposed for closure," he added.
Khuba went on to say that the two plants in Kerala and Punjab have been "losing money for several years" and are "unviable" to run for a variety of reasons.
The utility cost distribution to agrochemicals has resulted in a high cost of production as a consequence of the gradual reduction and eventual shutdown of DDT production at the Kerala plant, he said.
Furthermore, inbound and outbound transportation expenses were "abnormally high" due to geographic disadvantage. He added that low capacity utilization resulted in a high fixed overhead expense per unit.
The Punjab factory, on the other hand, is an agrochemical formulation plant for solid and liquid pesticides.
The minister said the technical grade of pesticides is transported from the company's Maharashtra and Kerala plants and formulated in Punjab, which makes the entire proposal "unviable."
The Punjab plant is also "losing money" due to poor automation, manual packing, excess manpower, and raw material shortages.
"Its operations have become unviable due to the aforementioned reasons," the minister added.
Asked if the government will contemplate the redeployment of employees of both plants, the minister said, "No Sir."