Thursday, June 30, 2011

National Textile Corporation

The National Textile Corporation Limited (NTC) is a Central Public Sector Enterprise under the Ministry of Textiles which was incorporated in April 1968 for managing the affairs of sick textile undertakings, in the private sector, taken over by the Government. Starting with 16 mills in 1968, this number gradually rose to 103 by 1972-73. In the year 1974 all these units were nationalized under the Sick Textile Undertakings (Nationalization) Act 1974. The number of units increased to 119 by 1995. These 119 mills were controlled by NTC(HC) Ltd with the help of 9 subsidiary Corporations, with an authorized capital of Rs 10 crores which was raised from time to time and which is now Rs 5000 crores and the paid up share capital of the corporation is Rs 3062.16 crores as on 31.03.2010.


BIFR approved 8 revival schemes for 8 erstwhile subsidiary companies of NTC and 1 revival scheme for 9th subsidiary company (not referred to BIFR then) was approved by GOI. Later, BIFR approved 2 Modified Revival Schemes 1st MRS-06 in the year 2006 and 2nd MS 08 in the year 2008.
Looking to the reduced number of mills and in line with the contemporary industry’s trend all 9 subsidiary companies have been merged with NTC-HC making it into a single Company w.e.f. 01.04.2006.
NTC has so far closed 77 mills and has transferred 2 mills in the State of Puducherry to the State Government of Puducherry.
NTC is to modernize/set up 24 (22+2) mills by itself through generation of funds from the sale of its surplus assets and 16 (18-2) mills are to be revived through Joint Venture route.
NTC has modernized 18 mills so far and is in the process of setting up 3 Composite Textile Units of which one is an SEZ area. NTC would be setting up 1 Technical Textile Unit and modernizing 2 more units taken out from the list of Joint Venture apart from going into Ginning & Garmenting by way of forward and backward integration to have a pressure in all components of the value chain.

JOINT VENTURE

It was also decided to modernize 16 (18-2) mills through JV route by inducting private partners with NTC stake of 51%.

In pursuance to the GOM decision dated 22.08.2007 NTC has finalized 3 parties namely M/
s Alok Industries, M/s Pantaloon Retail India Ltd (consortium) and M/s Bhasker Industries Ltd (consortium) for 5 mills to be revived and run through Joint Venture .NTC has not transferred the ownership of the land in the arrangement but is only giving a right to use of the land to the Joint Venture Companies (JVC) in which NTC is the major shareholder with
51% stake with 5 out of 8 directors on the Board of JVC.
Further NTC invited offers for making Joint Venture in respect of other 11 mills where MOU was signed but later reviewed and now in the process of cancellation.
Further steps in respect of these units are being contemplated.

INDIAN TEXTILE PLAZA

Indian Textile Plaza is under construction through NBCC at the land of Jehangir Textile
Mills, Ahmedabad (a closed NTC mill) with facilities like Handloom & Handicrafts Mall, Exhibition Hall, Convention Hall, Theater Complex, Textile/Handicraft Museum, Food Court, Children Plaza, and Youth & Women Training Center & City Plaza by NTC forming SPV with NBCC. An MOU has been signed with NBCC for construction of the Plaza where NTC will also
have a devoted space to represent itself before the public.

MODIFIED REVIVAL SCHEME

As directed by MOT and also the NTC Board, NTC is in the process of reviewing its revival
scheme with the possibilities of expansion and backward & forward integration.

SALE OF ASSETS (LAND) THROUGH E-AUCTIONING

NTC for the first time in Indian history, sold its 2 prime lands of Mumbai through Eauctioning, a fully transparent system, permitting parties to improve bids through reverse auction, and fetched record returns for both of them. The funds are to be utilized for the revival of the Company.

RE-ENGINEERING

In order to rework and conserve energy (especially power) NTC has engaged 2 energy firms namely M/s MITCON Consultancy Services Ltd. and M/s BEC Energy Management Systems as Consultants initially to study and suggest measures for saving energy in all forms.

MONITORING & IMPROVING PERFORMANCE OF MODERNIZED MILLS

M/S JPS Associates (P) Ltd., have been engaged as Consultants to observe short comings
– suggest measures – monitor implementation for bringing about improvement through
professional feedback on performance.

OUR PRODUCTS

Popular products of Finlay brand like ‘Shahzada’ ‘Mahamantri’ have been revived in a new look
NTC has been awarded license for sale of CWG merchandise for home ware category. NTC is a proud supplier of entire range of bed linen and bath linen for common wealth villages which is staying place for players of various countries.
In addition to it NTC has recently launched a new range of bed linen and bath linen to cater to premium segment under the brand name ‘Raasa’ with back end support from Roseby Interior India Ltd.

PROFITS
(in Crores)
 2006-07*  2007-08*  2008-09*  2009-10
(current year)
 2800.54  92.15  246.51  103.15

* After Write Off of Government Loan upto 31.03.2006 and waiver of interest
thereon.

ACHIEVEMENTS/MILESTONES OF THE SCHEME

NTC mobilized Rs. 2028 crores by private placement of bonds, redeemable on 5 years maturity. NTC paid Rs. 248.69 crores as OTS to 23 Financial Institutions/Banks under the Revival Scheme.

1. The entire workers of the mills identified for closure and the surplus employees in the viable mills in addition to those employees who were desirous to go under MVRS in the various offices, were given MVRS at a cost of Rs. 2293.32 Crores. So far, 62297 employees have gone accepting MVRS.

2.
The Company identified 77 mills as unviable and closed under the provisions of
Industrial Disputes Act (I.D. Act), after following necessary procedure.

3.
40 mills are slated for revival – 24 directly by the Company and balance under joint
venture partnership with private sector.

4.
The Company has so far spent Rs. 964 crores for the modernization of 22 mills, out
of a total of Rs. 1156 crores.

5.
18 of the mills have completed modernization.

6.
Relocation of mills for modernization – BIFR approved relocation of 4 mills – one
each at Achalpur (Maharashtra); Hassan (Karnataka); Ahmedabad (Gujarat); and Udaipur (Rajasthan). Setting up of these projects will transform the Company into an integrated textile company. 3 mills are composite mills which are relocation
projects and the spinning segment of the two projects i.e Finlay at Achalpur, and New Minerva at Hassan are erected & Rajnagar at Ahmedabad would be erected by Oct.. 2010.

7.
NTC has completed the process of revival of 5 joint venture companies and they
have started the activities in a big way – one in the Aurangabad Textile Mills for garmenting and work-wear, other New City of Bombay Mfg. Mills Ltd. has set up a design studio, sampling and garmenting unit, third India United at Mumbai has set up Denim unit and Apollo & Gold Mohur at Mumbai has started readymade Garments Unit.

8.
From Rs. 385 crores budgetary support for wages in the year 2001-02, there is
no budgetary support from the Govt. for the wages in the year 2009-10. NTC is generating internally the resources for wages payment.

9.
The Company has sold assets worth Rs. 6100 crores under the Revival Scheme.
10. The Company has paid Rs. 224 crores to EPF/ESI authority & other outstanding statutory liabilities.

11. Since NTC was left with less number of mills, merger of all the 9 subsidiaries became necessary and all the subsidiaries were merged with the Holding Company w.e.f. 01.04.2006.

12. Net worth of the Company has become positive.

13. All the secured and most of the unsecured creditors have been paid off.

14. NTC has already paid full amount of Rs. 2028 crores on redemption of bonds and Rs. 785.60 crores as interest on these bonds.

15. The Company has paid Rs. 89 crores as 1% commission as Guarantee Commission to the Ministry of Textiles.

16. Presently 17 units of NTC are generating cash profit.

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