OVERVIEW OF NATIONAL TEXTILE CORPORATION LIMITED
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 Undertaking (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 31.03.2008.
In the year 2002 BIFR/GOI approved revival of 53 viable mills and closure of 66 unviable mills.65 unviable mills have so far been closed under the ID Act after paying MVRS to the employees by raising funds through private Placement of Bonds, 2 Mills (one viable and one unviable) located in the state of Puducherry have been transferred to the State Government of Puducherry w.e.f 01.04.2005. NTC now has 52 mills and 99 showrooms as on 1.4.2008. BIFR approved a modification to the NTC scheme in the year 2006,which was necessary due to the changed scenario of the textile industry and directions of GOI &GOM. The 2nd modified revival scheme now prepared has been submitted to BIFR through IDBI for approval, which will be received shortly as per the hearing conducted by BIFR on 27.05.08.
In the implementation of the Revival Scheme sanctioned for NTC mills, Government has decided to modernize 22 mills by itself through generation of funds from the sale of its surplus assets .The remaining 30 mills requiring heavy dose of modernization, for which NTC did not have adequate resources for modernization after meeting the cost of servicing the Bonds raised and also to quicken the modernization process, private partnership through joint venture was explored for 18 mills .
Also,12 mills are to be closed further where most of the employees have opted for MVRS and production activity is totally stopped since the last 2 years.
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.
Joint Venture
It was also decided to modernize 18 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 for modernization through Joint Venture .NTC has signed MOU and other transaction documents with the said 3 parties. As per the terms of JV agreement, NTC is not transferring the ownership of the land but is only giving a right to use of the land to the JVC in which NTC is the major shareholder with 51% stake. Some more decisions have been taken in the Group of Ministers meeting dated 11.06.2008 and 07.08.2008, minutes of which are awaited. 12 more mills are in the process for consideration of suitable JV partners.
India International Trade Tower
The matter regarding setting up of the I.IT.T was placed before the GOM in their recent meeting of GOM held on 07.08.08 and the decision is awaited.
Indian Textile Plaza
Indian Textile Plaza is under construction 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, Youth & Women Training Center & City Plaza --by NTC forming SPV with NBCC .An MOU has been signed with NBCC for construction of the Plaza.
MODIFIED REVIVAL SCHEME
NTC appointed a Consultant to prepare a Second Modified Revival Scheme for modernizing 22 mills and other allied matters keeping in view the present trends of the Textile Industry. In this scheme, it is proposed to further expand the spindle capacity wherever space is available in the mills to accrue benefit from the economics of scale. The total capital outlay for modernization of 22 mills would be Rs1155 crores instead of Rs.530 crores proposed in the first Modified Revival Scheme. The proposal is under active consideration of BIFR.
So far, NTC has completed modernisation of 5 mills where the total machinery was received and commissioned by December, 2007. Now these 5 mills are running on full capacity to produce desired level of production and quality of yarn.
In 11 mills, most of the machineries except Speed Frames & Ring Frames have been received. The mills have placed orders and opened L/Cs for purchase of Speed Frames & Ring Frames. It is planned to complete the modernisation in upto another 11 mills by October,2008.
The balance 6 mills proposed to be modernized as under:-
1. For modernisation of 2 mills on turn-key basis by NTC itself a contract has been awarded to the M/s LMW to supply ,erect and commission the total spinning machinery upto December,2008
2. For 4 mills to be modernised by re-location as green field mills, the renowned consultants i.e M/s Technopack (for 3 mills &M/s Gherzi Eastern (for 1 mill) have been appointed. These 4 mills will be modernised by December,2008.