Kumram Bheem Asifabad: A consortium of banks has agreed to the revival proposal of Sirpur Paper Mills (SPM), Kaghaznagar, bringing cheer to thousands of employees. This is a crucial development with regard to the reopening of the paper manufacturing company, which was closed due to operational losses in September 2014.
In March last, an order was issued by State government, granting a slew of incentives to JK Paper Limited, which came forward to revive the sick unit by investing Rs 628 crore. The issue of revival of SPM was placed before the Cabinet meeting on March 14. The Cabinet agreed to the incentives and tailor-made benefits under Mega Project for restarting the factory.
Sirpur (T) MLA Koneru Konappa told Telangana Today on Thursday that the consortium had approved the revival proposal after holding consultations with the management of JK Paper Limited. “It came to an understanding of financial matters with the company. This process will be completed within a month. Then, the new management will commence the SPM revival works by the end of June,” the lawmaker said.
A large number of employees gathered in front of the main gate of the mill and burst crackers when news of banks agreeing to the revival was aired on television channels on Wednesday evening. They thanked Industries and IT Minister KT Rama Rao and Koneru Konappa for playing a vital role in reviving the factory.
Some of the major incentives sanctioned for JK Papers Limited include reimbursement of 100 per cent gross State goods and service tax for a period of 10 years, exemption of 100 per cent stamp duty, capital subsidy on 20 per cent investment, concession on purchase of debarked euca or subabool wood, making degraded or forest land available for the unit for plantation in future.
The other benefits accepted by the government were an exemption of electricity duty for 10 years and reimbursement of power cost for three years at Rs 3 per unit. When it comes to liabilities of the factory, liquidation value of workmen’s priority dues and all other arrears of the workforce will be paid by the government. Plus, this company is entitled to get a full waiver of other contingent dues and confirmed dues.
Livelihood for 10,000 families
The much-awaited revival of the factory will protect jobs of 1,650 regular employees, 500 official staff and 1,500 casual labourers, besides creation of indirect livelihood for 10,000 families. The JK Papers Limited will invest Rs 628 crore on reopening of the factory and for purchasing machinery to upgrade and expand it in future. The mill was originally erected by the then Nizam ruler in 1937.
What caused shutdown?
The management of the SPM closed production of paper on September 27 in 2014, citing “longtime shutdown”. Management of the factory has external liabilities of over Rs. 400 crores to seven private bankers.
The Industrial Development Bank of India (IDBI), on behalf of a consortium of lenders, put the closed unity for sale in order to recover their dues amounting to Rs 422.21 crore in January of 2016. It has already taken physical possession of the mill and other properties in October of the same year.