Andrew Yule & Company Ltd missed out the opportunity of roping in a much needed foreign joint venture partner for its engineering division as it failed to reduce the workforce to the level preferred by a foreign company.
According to the director planning (officiating as the chairman and managing director), R K Kashyap, talks with that foreign company was at an advanced stage. "We were almost on the verge of getting a joint venture partner but then it fell through," Kashyap told shareholders at the company's annual general meeting.
Andrew Yule, which was set up in 1862 and incorporated in 1919 after the first companies law was adopted in 1915, registered a turnover of Rs 223.32 crore and had an operating profit of Rs 5.74 crore.
Kashyap said that the engineering division of the company had more than 500 employees. "The joint venture partner wanted to reduce the workforce to around 200 only. However, considering the interest of the employees we dropped the plan," he added.
However, company sources said that Andrew Yule was forced to drop the joint venture proposal, where it would have held 49 per cent, due to pressure from the West Bengal government and the shortage of funds.
"Union government, which holds over 92 per cent stake in the company, could not provide funds for a voluntary retirement scheme and the Leftist government of the state was also against any such move on workforce reduction. These two factors forced the Andrew Yule to discontinue talks with the foreign partner," company sources said.
Kashyap, however, added that the company is still looking for a joint venture partner for the engineering division. Regarding the division's workforce, he said that it has already been reduced to around 500 from 1,000.
"Union government has stated that funds from the National Renewal Fund will not be available for a voluntary retirement scheme at Andrew Yule. Instead, it would be from internal accruals only," Kashyap said.
According to him, the electrical division of the company has increased its production by 30 per cent during the last financial year over the previous year. Profits from this division increased by 15 per cent.
Similarly, the tea division of Andrew Yule upped its production by 30 per cent.
Kashyap also said that the shrimp project has been discontinued as it is unviable after the Supreme Court banning aquaculture in backwaters.
"Fresh investments are necessary and we are not considering it," he added.
