Britannia likely to sell Padi unit land

 

 

 

 

 

Fast-moving consumer goods giant Britannia is expected to sell its 22-acre property in Padi, an old manufacturing hub north of Chennai. This follows the suspension of operations at the company’s plant located here.
The company informed the Bombay Stock Exchange on Tuesday that it has suspended operations effective April 7 at its Padi unit after the majority of workers accepted the company’s voluntary retirement scheme offer.
According to sources, Britannia sits on prime land and it stands to reason that the company would encash it. The sale is likely to fetch Britannia close to Rs 300 crore in view of the appreciation in real estate value in this region, the sources added. Top on the list of bidders is Shiv Nadar’s HCL, which has been scouting for land in industrial suburbs. HCL has been expanding its real estate presence in suburbs like Ambattur.
Padi appears to be headed in the same direction as the industrial belt of Ambattur, which has been feeding the IT and retail boom by freeing up land. The rise in real estate value is, to a large extent, due to the demand from these sectors.
With the closure of the factory imminent, the settlement of the 500-plus workers is slated to take place on April 12. As many as 218 workers fall under the permanent category, while there are 25 officers and 10 managers. There is also a contract labour workforce of about 400 people, company sources said.
Early bird incentive, gratuity, bonus based on the number of years in service are all parameters that will be taken into consideration to arrive at the VRS compensation packages, which could start from Rs 6 lakh per worker and touch a maximum of Rs 10.5 lakh, they added.
Britannia’s manufacturing unit at Padi housed three plants which processed 2,000 tonnes of biscuits every month on a nine-shift basis. But in the last two years, only two shifts have been working at each plant, sources said. A similar VRS engagement two years ago saw the exit of 250 people.
Contract packaging is said to be replacing manufacturing operations. The manufacture of biscuits at Sholinganallur plant has now been shifted to the Chengalput industrial area, where 800 tonnes of the biscuits are processed every month.
Likewise, at Madurai, Indian Foods, which handles the outsourcing function for Britannia, manufactures 2,000 tonnes of biscuits every month while half that volume is the capacity of its Vellakoil plant, sources said. Britannia has two factories in Bangalore and a new unit 70 km from Hyderabad.

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