English Indian Clays Ltd (EICL) is staring at a serious predicament owing to the financial crisis induced by Covid-19 and the ban on mining clay, a critical raw material for its operations.
The company has suffered a substantial drop in market share and sales in its wake inflicting upon it a huge financial loss. The company also remains apprehensive of its potential for future investments in the State. Investments have been directed to Gujarat where operations have already started.
“The future of the company in Kerala has become very weak because of the lack of permission to mine for our raw materials. This had led to a loss both in terms of financial and market share while also resulting in a total loss of confidence in making further investments in Kerala,” said a statement from a senior official of the company.
If things don’t improve, the company fears that the operations at its Thonnakkal factory might also go down along the lines of what was witnessed at its unit at Veli. Clay mined from Thonnakkal has been found wanting both in terms of quality and quantity for sustained
operations thanks mainly to the restricted permit for mining activities. The drop in market has had a cascading effect worsening the situation further, the statement said.
“Unfortunately, the above position is proving to be highly stressful to the workers and they have our deepest sympathies. The company had already taken up the case at various levels of the government. But the situation still remains fluid and sub-optimal with the shortage of raw material continuing to be a serious challenge. If there is no positive development in the near future, the Thonnakkal unit is likely to go the way of the one at Veli”.
The company operations were already on a downturn for the last couple of years on account of the continuing shortage of raw material. This eventually led to the closure of the factories at Thonnakkal and Kochu Veli in August 2020.
Notwithstanding the loss, the company chose to resume partial operations on the intervention of the Govt at Thonnakkal solely for protecting the interests of the workers following discussions held with the government and trade unions, the statement said.