Britannia suspends production in Chennai

Biscuit maker Britannia Industries has suspended manufacturing operations at its Chennai plant effective April 7, the company informed the Bombay Stock Exchange today.

The Chennai plant has a capacity of 1,000 tonnes per month. To fill the production shortfall, the company plans to get products from its other plants and through outsourcing.

Britannia currently has a manufacturing capacity of 48,000 tonnes per month. Of which, 40,000 tonnes is outsourced.

Durgesh Mehta, chief financial officer, BIL, said, "This is part of our manufacturing strategy and we are closing the Chennai unit to optimise the cost of sourcing. There are 200 people at this unit and, over a period of time, the VRS cost will come to around Rs 5 crore."

Britannia Managing Director Vinita Bali said, "We are not expecting any adverse impact on our financial results due to this closure."

The VRS scheme has already been accepted by a majority of the workmen at Chennai. This is the second factory of Britannia that has suspended production following its Mumbai factory, which is facing labour troubles.

The case between the company and the workmen at the Mumbai factory has gone to the Bombay High Court.

Even Hindustan Unilever was affected due to labour unrest resulting in its personal care products business suffering in the third quarter last year.