When the locks of the Sirpur Paper Mills, Kagaznagar (270 km from Hyderabad), were reopened on August 2, 2018, in the presence of Telangana IT Minister KT Rama Rao and JK Paper Ltd managing director Harsh Pati Singhania, happiness spread across the area. With this, JK Paper Ltd had taken charge of reviving the over 80-year-old company after its Rs 782-crore resolution plan was approved by the National Company Law Tribunal on July 19. The mill had shut down on September 27, 2014, due to operational losses, snatching away the lifeline of many.
Sirpur Paper Mills (SPM), an integrated pulp and paper mill, was originally set up on a sprawling 110 acres by the seventh Nizam, Mir Osman Ali Khan, in 1936, in a village then known as Kothapeta, on the banks of Peddavagu, a tributary of Pranahita river. Kothapeta became Kagaznagar owing to the paper manufacturing firm.
Production commenced in 1942 with six machines, producing about 120 tonnes of paper a day. It was purchased by the CK Birla Group in 1950 and transferred to RK Poddars in 1998. Two more units were added in 2007-08, increasing daily output to 320 tonnes.
SPM played a critical role, both in the lives of employees and in the growth of the area, now under Kumram Bheem Asifabad district. In fact, it gave the area its identity. The workers had social security, lived a contented life, and the place bustled with activity.
“We used to enjoy respect in society. We were able to provide quality education to our children. We could afford decent healthcare and we had good buying capacity,” says Gadadasu Mallaiah, a former employee, who worked for SPM for 36 years and retired recently.
Not just employees, but the town itself was recognised across Telangana as well as the country. Kagaznagar attracted businessman, small industries, craftsmen and outlets of various brands.
During its glorious days, the factory had nearly 4,000 permanent employees. The numbers dropped to below 3,500 when the factory was closed. At present, there are 2,800 employees, says Thumma Ramesh, president of SPM Workers Parirakshana Committee, adding that around 10% skilled workers migrated and about 5% moved to other occupations, including business.
The shutdown can be attributed to multiple factors. Though the firm added two more machines to the existing six in 2007-08 as part of the modernisation plan and increased production to 300 tonnes per day, it began registering operational losses of Rs 200 crore per annum, from the very following year.
The steep escalation in the cost of raw material strained the factory. The price of the raw material, including bamboo and eucalyptus, shot up to Rs 10,000 from Rs 3,000 per air dry tonnes. Similarly, shortage of power supply hit the production hard.
Due to inadequate electricity, output was often suspended. “The operational losses forced the management to look for loans but it failed to get loans from banks and support from other sources, resulting in the closure and shattering of dreams,” explains Ramesh.
The abrupt closure adversely impacted many. Workers struggled to provide education to their children and treatment to ailing family members. “We began relying on Employees’ State Insurance hospital for medical services and could not pay school fee of our children,” points out Ettevoina Dinesh Yadav, an employee. They even found it difficult to solemnise wedding of their daughters.
About 10 workers committed suicide as they were unable to bear the financial crisis. Kavude Laxmi, whose husband Ramesh ended his life by hanging in 2015, says she was selling vegetables to meet ends. “We are yet to come to terms with the closure since we lost the breadwinner of the family.”
But a few employees managed to overcome the hurdles. Bingi Ramesh, a welder, ventured into groceries. His wife started a kirana store as an alternative source of income. Ramesh is now working with Orient Cement in Devapur of Mancherial district.
“We were shocked to hear about the shutdown and were depressed thinking about how to provide education to two daughters. So, we initially decided to run the grocery store. Then, I started searching for jobs in neighbouring towns. I found a contract-based placement with the cement manufacturer later,” says Ramesh.
All Hopes on Revival
The new management plans to restart five machines of the total eight by December. “A single modern-computer based machine will be installed as part of modernisation. The plan is to double production to 600 tonnes per day,” informs R Ramesh Rao, factory manager.
Not only employees belonging to SPM, but many youngsters too are looking forward to the revival of the mill, expecting employment opportunities, especially since many of them are not interested in migrating elsewhere in search of livelihood.
“Instead of recruiting staffers from neighbouring States, the management can provide us jobs. Most of us are qualified and talented. We would to like to be a part of the factory’s journey,” a hopeful Annela Ashok, a BSc from Sirpur, tells Telangana Today, reflecting the new hope of many youngsters in the State.