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Government bid to reopen sugar mill

PALAKKAD: A team of industrial experts appointed by the State government visited Chittur Cooperative Sugars Limited at Menonpara near here and held discussion with the management as part of the move to reopen the company that stopped production in 2002.

The government recently decided to produce Indian Made Foreign Liquor (IMFL) in the distillery of the Cooperative Sugars as part of its reopening. The company which started in 1965 as farmers cooperative was running in loss except for three years — 1974-75, 1982-83 and 1991-92. But it managed to survive with its distillery making profit by selling rectified spirit and making arrack.

The company fell into bad days when arrack was banned. It was producing arrack from molasses, a by-product of sugarcane grinding. When the arrack was banned, the factory had to stop the production. Its attempt to get a licence to produce Indian Made Foreign Liquor (IMFL) also was rejected by the previous Left Democratic Front (LDF) government.

The Extra Neutral Alcohol (ENA) produced by the factory had no buyers mainly because of its low quality for producing IMFL and also due to the high price. The government also did not insist on the distilleries in Kerala to buy spirit from the factory.

Now the company has to pay a due of Rs.3 crore to sugarcane farmers. It has not paid gratuity to the 300 workers who took Voluntary Retirement Scheme (VRS) in 2004 when it was felt that the company cannot survive. But these workers did not get their full gratuity so far. The company also did not pay the Provident Fund due of its workers. The PF Commission has attached the property of the company for non-payment of PF dues.

The company was formed as a cooperative of the sugar farmers of both Kerala and Tamil Nadu. The Chittur area of Palakkad and the adjacent Pollachi area of Tamil Nadu had good potential to develop sugarcane. So the company was registered as a multi-unit cooperative society under the Central government Act, extending the area of its pro-farmer operations to Coimbatore and Pollachi in Tamil Nadu.

In fact, the factory had been established in the context of a desire expressed by farmers in Kerala and Tamil Nadu, who later became its shareholders. But during its operation, the aim and objectives of the company was defeated, the farmers said.

Now the factory is in a pitiable position. It is neither a cooperative nor a company. The last general body meeting of the company to elect the Board was held in 1969. After that there was no elected body to run the affairs of this cooperative society.

The sugarcane cultivation shrunk from 7,000 acres to 2, 200 acres in 2004 and now it is only 200 acres in Chittur area. But some of the trade union leaders who campaigned for the reopening feel that the move to reopen the distillery will not help the sugar factory to reopen. It is mainly because even if the IMFL is produced here it will be difficult to market it facing the cut throat competition. A similar proposal was earlier rejected by the government.

They said the entire sugar factory should be modernised with a capacity to crush 2,500 tonnes of sugarcane a day. This required seven lakh tonnes of cane that need 12,000 acres of land for cultivation.

Now the Central government will not give licence to sugar factory that will not have a minimum 2,500 tonnes grinding capacity per day.

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