Mawmluh Cherra Cements Ltd (MCCL), the state-owned cement company that is perpetually on life support, needs another investment of Rs 180 crore to make it profitable, its Chairman and Jowai MLA, Wailadmiki Shylla, said today.
Unable to sink such an amount into the listless firm, the Industries Department put forward two other options to the state government – find a private partner or shut the company down.
“Due to the Covid-19 pandemic the revenue of the state is down. Therefore, to invest Rs 180 crore at this point in time will not be possible,” Shylla informed reporters.
To date the government has ploughed Rs 234 crore into the company for salaries, payment for procuring coal to run the plant and other expenses as MCCL has struggled to pay its own way. Recently the State Finances Audit Report of the Comptroller and Auditor General (CAG) criticized the vast amounts of public money the government has invested for little to no benefit in MCCL and other state-owned companies.
Despite the government looking to sell only a minority stake in the company, thereby keeping ultimate control of the firm, local stakeholders, like the Mawmluh Dorbar and Hima Sohra, fear the changes that even partial privatization might bring, such as a threat to jobs, even though employees have not been paid their salaries for over a year.
“But we as the government have moved ahead to prepare the Expression of Interest (inviting proposals for a joint venture). We are hopeful these two stakeholders will change their mind for the sake of the employees of MCCL,” Shylla said. Until then the government will try to help with pending salaries, though it will not cover the full 100 percent.
Originally known as Assam Cements when it was set up in 1955, the company took its current moniker in 1974, soon after Meghalaya attained statehood.
It survived the wave of privatization that swept through India from the 1990s onwards but the situation at the firm is nothing but dire.
According to Shylla, the MCCL sells a bag of cement at Rs 330 or 340 per bag, which is less than half the amount (Rs 700) it would cost to break even. It has been calculated that the company would need to produce 8,000 tonnes of cement per month to be profitable but typically produces only 3,000 to 4,000 tonnes. Only once has it managed to hit the 10,000 tonne figure, Shylla said.
The employee union has been protesting over their salaries, which have been pending for 15 months. Perhaps fittingly for a company that is starved of funds, on Thursday they will hold a hunger strike at the company’s main gate.