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Madras Fertilizers to cut retirement age

R. Balaji

CHENNAI, Nov. 3

MADRAS Fertilizers Ltd has decided to reduce the retirement age for its employees from 60 to 58. A decision to this effect was taken at a recent board meeting, according to reliable sources.

The proposal along with that of a new voluntary retirement scheme (VRS) has been forwarded to the Centre for its approval, the sources said.

The decision to bring down the retirement age will help prune the senior-level management, at least nine of whom -- in the rank of supervisors like group heads and DGMs -- will retire shortly.

This, in conjunction with the VRS structured along the `Gujarat model', is a part of the fertiliser manufacturer's bid to cut cost and improve competitiveness. Over the last two years, the company has reduced its workforce by 12 per cent, they said.

The VRS while being more generous than the earlier ones will, however, target a relatively lesser number. With an unionised-worker strength of about 700 and a supervisory and senior official cadre of more than 800, several employees in the latter group a re likely to opt for the separation scheme. A preliminary survey has indicated that more than the targeted number of workers are likely to opt for VRS, sources said.

From around 1,800 about two years ago, the workforce is now around 1,575 and the management hopes to bring it down further by about 75-100. This follows the recommendations of a consultant on total cost management, they said.

Earlier this year, company officials had said that the financial restructuring proposal formulated in consultation with IDBI in December 1998 was under consideration of the Finance Ministry. The company had employed a consultant for total cost management .

Among the measures to cut cost are a new voluntary retirement scheme, a captive power plant with cogeneration of steam on build-operate-transfer (BOT) basis, and a two-million-tonne per year fertiliser berth at the Ennore port through a joint venture.

MFL closed 2000-01 with a turnover of Rs 1,400 crore and a loss of Rs 30 crore. The company had attributed this largely to failure of the monsoon and high inventory costs.

The Government proposes to disinvest its 37 per cent stake in MFL, for which it had invited expression of interest (EoI). The disinvestment process is being continued, and discussions are on at diplomatic level with the National Iranian Oil Company (NIOC ), one of the stakeholders in MFL.