Kerala Soaps Gets Closure Notice From Govt

Kochi, December 18: | Updated: Dec 19 2002, 05:30am hrs
The final nail has been struck on the Kerala public sector unit Kerala Soaps and Oils Ltd (KSOL) in Kozhikode with the government notifying its closure and orders to have a VRS for the staff and begin steps to sell off the assets.

Such a decision had been in the air for quite sometime since KSOL which has remained shut since two years was on the enterprises reforms committee (ERC) list of a dozen PSUs which were beyond redemption. The announcement to wind up the company comes at a time when the state government has given the nod for a World Bank washing hands project aimed at preventing diarrhoea which has the support of all the soap majors.

The company has been in the dumps since 1984-85 suffering massive cash losses which led to production stoppage in 2000. Between 1964 and 1999, the company operated profitably only for five years which was a mere Rs 32 lakh.

The companys operations were earlier in 1992 after continuous losses. It was reopened in July 1996 on the basis of the project report prepared by an expert committee and production resumed in May 1997.

The expert committee had then recommended a revival package of Rs 11.23 crore and the government sanctioned the amount between 1996 and 1999.

The government had also secured a one-time settlement with the banks for Rs 11.91 crore against the original liabilities of Rs 22 crore. It had paid Rs 6.5 crore in 1999 to the banks.