Britannia seeks to shut Mazgaon unit

Close on the heels of restructuring the group's textile business, Nusli Wadia is now looking at recasting the bakery business. Britannia Industries is looking at closing down its manufacturing plant in south Mumbai.

Towards this, the biscuit major has sought permission for closure of its facility at Reay Road, Mazgaon from the labour commissioner. The facility employs over 450 people on its pay rolls.

Nikhil Sen, chief operating officer of Britannia Industries, said, "I wouldn't like to comment on this issue at this juncture, as the matter is sensitive, involving labour issues."

However, M B Gajre, labour commissioner (additional charge) confirmed the development and said that, "We have received an application on December 24 for closure of Britannia factory. The company has submitted that while it is a profit making firm, the operations at the unit are economically unviable."

Gajre added that a preliminary hearing was held on Monday where the recognised trade unions "" Kamgar Aghadi headed by PN Samant as well as the Bhartiya Kamgar Sena raised objections to the closure. The company has been asked to respond to these points raised by the unions.

Samant told Business Standard, "We have submitted objections on issues of technicality challenging the closure. It is also our contention that the company wants to shut down the Reay Road facility only because the employees here are paid wages ranging between Rs 14,000 and Rs 15,000 per employee. Britannia is contracting out the same for less than one-tenth of the labour cost."

The labour commissioner has 60 days to decide on the closure application failing which the closure order would be deemed to have been issued.

Apart from the Mumbai facility, Britannia Industries plants are located at Kolkata, Delhi and Chennai. The Mumbai facility makes products such as Mariegold, Little Hearts among others.

Britannia, is the leader in the organised Rs 4,500 crore bakery sector. Biscuits contribute to more than 90 per cent of its turnover and the main brands are Tiger, Mariegold, 50-50, Good Day, Milk Bikis, Treat and Pure Magic.