RIL closes five polyester units at Patalganga

05 November 2008

Even as Prime Minister Dr Manmohan Singh asked industry to refrain from job cuts, one of the largest private sector employers in the country, Reliance Industries (RIL), has offered exit option to employees as it plans to close five of its seven polyester and petrochemical units at Patalganga.

The global slowdown is having its effect on Indian companies who need to stay afloat by cutting costs to shore up their eroding margins. In the case of RIL the demand for polyester products fell in the international market after the phenomenal rise in the pices for crude oil, required for making polyester. Due to decrease in profit margins the company had recently planned to upgrade and automate most of the old polyester units.

Last month RIL had offered VRS to its employees in the non-supervisory categoris such as operators and machine maintenance technicians last month and had received around 300 applications from the 3,000 permanent employees at Patalganga. There are about 1,000 employees in the non-supervisory category and more or less the same number of supervisors. The remaining employees are casual and contract labourers.

The company has now offered an exit offer to almost 800 non-supervisory employees at Patalganga in acordance with its agreement with the employees union.

According to reports compensation to the tune of about Rs2 million has been offered to employees having a minimum of 3-5 years of experience. It is expected that most of remaining 300 employees may accept the offer, as employees had been idle for the last one month due to production cut in these units.

The company had shut down plants for manufacturing polyester filament yarn (PFY), polyester staple fibre (PSF), paraxylene (PX), purified terephthalic acid (PTA) and linear alkyl benzene (LAB), according to reports. Whether the second units of PSF and PFY are close down or not is not known.