India Jute to change hands

The century-old India Jute located on the banks of Hooghly is changing hands. The Rs 2,000 crore Kajaria-owned Murlidhar Ratanlal Exports and owners of Hastings and Lagan Jute are planning to take over India Jute from Arun Bajoria, the jute baron. The deal is in the final stages and likely to be made public shortly.

This will be the third time that India Jute is changing hands. The first time was when the Jalans took over the company from the British owners. Arun Bajoria later bought the company from the Jalans in 1994.

Kajarias, the world-wide exporters of jute products, joined the league of jute mill owners in 1994 when they took over Hastings Jute from the Bangurs and then Lagan Jute from the Ministry of Heavy Industries in the 2000. Kajarias currently hold 74 per cent equity in Lagan with the Union Government holding the remaining 26 per cent.

The owner of Hastings, Sanjay Kajaria, refused to comment, pointing out that "nothing could be disclosed at the moment". This is the first takeover of a jute mill, considered a sunset industry, in the last one-and-a-half decades. The move is significant as it comes at a time when jute mill owners are planning to leave the ailing industry.

West Bengal currently has 59 jute mills, with 54 in the private sector. Almost 80 per cent of the mills, which have fallen sick over the years, have been referred to the Board of Industrial and Financial Reconstruction (BIFR). The sick state-owned National Jute Manufacturers Corporation (NJMC) runs five mills.

As for India Jute, industry sources pointed out that it has an installed capacity of 110 tonnes per day (tpd). The current capacity utilisation of the mill was around 75 per cent. The present hands per tonne (hpt) was about 45 against the industry average of 35 hpt. Kajaria would be taking over the mill without any liabilities, especially workers provident fund, esi and gratuity, the sources said. The mill has up-to-date records and employs 4000 workers.

India Jute is spread over 15 acres of prime land on the banks of Hooghly, but unlike other jute mills do not have any real estate assets. The plant, machinery and other assets are all squeezed into the 15 acres.