Ailing Arun Bajoria disposing jute mills

Jute baron Arun Bajoria is on a selling spree. After deciding to sell India Jute to the Kajarias, Bajoria is divesting three mills in Andhra Pradesh to a handful of Kolkata-based mill owners for over Rs 80 crore.

Three mills which Bajoria has put up for grabs are Bobbili, East Coast and Aruna jute mills in Vizag. The buyers are Sunder Lal Duggar, Prakash Choraria, Manoj Tulsiyan and G Sarda.

Bajoria refused to comment as discussions with the buyers were in progress. He said the decision to sell mills was based on his poor health.

Post the divestment, Bajoria who built his empire after inheriting one mill-Hoogly Jute Mill-from his father Radheshyam Bajoria will face stiff competition from the second largest player, Sarda Group, to retain his leadership in the country's jute business.

Bajoria has 12 mills under his belt, nine in West Bengal and three in West Bengal. He has so far decided to sell four mills. Sarda Group, on the other hand, has five mills and is expanding its business. It has an annual production capacity of 600 tonne.

This would be the second spell of jute mills acquisitions by the Chorarias. In 2005 and 2006, the Kolkata-based business group acquired Northbrook and Gourishankar Jute Mills in West Bengal and Rameswara Jute Mill at Samastipur in Bihar.

Industry observers pointed out that the jute baron was possibly losing interest in the trade and is therefore moving to sell off his mills.

The negotiation over Bajoria's India Jute and 3 other mills in Andhra Pradesh demonstrates that jute mills do change hands even at a time when virtually no investment comes to this sector.

The 3 mills which are being hived off by Bajoria have a total production capacity of around 250 tonnes of jute goods a day and consists of about 205 spinning frames.

Choraria said, "hands per tonne (hpt) at the mills were around 50 as against the industry average of 30 - 35". The 3 mills employ 12,000 workers and supplied jute sacks to the vast rice and wheat growing areas in Andhra Pradesh.