Biscuit maker Britannia Industries (BIL) has informed the Bombay Stock Exchange today that its manufacturing operations at its Chennai factory have been suspended effective April 7, 2008. The capacity at this plant in Chennai is 1,000 tonne per month and this will be distributed to in-house and outsourced plants. Britannia currently has a capacity to manufacture 48,000 tonne every month of which 40,000 tonne is outsourced, with the remaining produced in-house.When contacted, Durgesh Mehta, chief financial officer, Britannia, told Business Standard, "This is part of our manufacturing strategy and we are closing this unit in Chennai to optimise the cost of sourcing. There are 200 people at this unit and over a period of time the VRS package will be around Rs 5 crore."The VRS scheme offered by Britannia has already been accepted by a large majority of the workmen. However, this is the second factory of Britannia that has suspended production after the company's Mumbai factory which is not operating currently due to labour issues. The case between the company and the workmen at the Mumbai factory is registered with the Bombay High Court.Even Hindustan Unilever was affected due to labour unrest and its factory closure resulted in its personal care products business suffering in the third quarter last year.
