Mukesh Ambani-promoted Reliance Industries (RIL) has received 300 applications from its employees of Patalganga unit for availing the company's voluntary retirement scheme (VRS), said sources in the know.
The VRS offer, which opened on October 9 and closed on October 25, was meant for employees in the non-supervisory category such as operators and machine maintenance technicians.
"RIL is looking to improve its profit margins through modernisation and cost-cutting measures since demand for polyester filament yarn and polyester staple fibre products is not rising in the international market. For the same, the company has also upgraded and automated most of the units at the site," said sources. Patalganga is a polyester-making unit.
RIL announced VRS for its Patalganga employees after taking the workers' union into confidence. The company, which recently restructured its textile business by giving focus to Vimal men's wear, has not yet finalised the number of employees who will be given the golden handshake. An email sent to RIL has not elicited any response.
"According to the latest information, the company has received around 300 applications from permanent employees out of the total 3,000. Under non-supervisory category, about 1,000 employees are working at the Patalganga unit, while almost the same number of people are working as supervisors. The remaining workers are casual and contract labourers. The final decision on VRS will be made soon after Diwali," sources added. After the increase in crude oil prices, the raw material for polyester, the demand for related products has fallen slightly in the international market.
The manufacturers, including RIL, which contributes about 70 per cent of the country’s polyester exports, were under pressure to maintain growth.
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Moreover, the polyester products are also facing tough competition from cheaper viscose ones that are made of wood pulp.
India’s polyester staple fibre export has increased about 8 per cent to around Rs 1,000 crore in 2007-08, while filament yarn export has risen 15 per cent to Rs 1,600 crore. Exports of Polyester fabric, which is made by weaving yarn, rose 17 per cent to Rs 2,500 crore.
In 2003, the company had first offered VRS for employees at Patalganga. At its Naroda unit in Gujarat, it had offered VRS twice in 2001 and 2005.
As the economy slowed down, the country’s largest private sector company has closed half its polypropylene plant at Jamnagar in Gujarat, because demand for the raw material used for packaging has slowed. It closed down a polyester intermediate mono-ethylene glycol manufacturing facility at Kurkumbh near Pune last year, to house centralised storage facilities for its retail operations under Reliance Retail.
RIl’s Patalganga manufacturing division is spread over 200 acres. The unit comprises five manufacturing plants for para-xylene, purified terephthalic acid, polyester filament yarn, polyester staple fibre and linear alkyl benzene. According to the company website, RIL has invested about Rs 3,000 crore at the location.