Racold in hot water after sudden closure of its Pune plant

By: | Published: November 8, 2018 12:21 AM

Racold, the leading electric water heater brand in the country, suddenly shut its Pune plant in Chakan with effect from November 1.

Racold in hot water after sudden closure of its Pune plant

Racold, the leading electric water heater brand in the country, suddenly shut its Pune plant in Chakan with effect from November 1. Racold Thermo is the wholly-owned subsidiary of Italy’s Ariston Thermo Group which manufactures the Racold brand in India.

Ariston is a 1.57-billion-euro company which generates 90% of its sales outside Italy with Asia contributing 20% of the sales and accounting for 25% of its employees.

Ariston had acquired Racold in the 90s to enter the Indian market. Racold was the largest selling water heater brand then and is still among the leading players in this category. The Chakan plant used to manufactured electric water heaters, gas based water heaters and solar water heaters. According the union, there were 97 permanent workers and 40 temporary workers at the plant.

Racold Thermo sent letters to workers, who were on Diwali holidays, stating their services were terminated on account of permanent closure of the Chakan factory of Racold Thermo, Swapnil Narayan Barmukh, general secretary of the company union, Poona Employees Union, said. “We got Diwali gift a day ago and were shocked to get termination notices through courier next day,” Barmukh said. This is an unfair labour practice to spring this kind of shock on the people, he said. The plant closure was from December 31, 2018, but workers were prohibited from entering the factory after the termination notice was served on them.

The union had approached the industrial court on November 1 and managed to get a stay against the company regarding moving of plant and machinery as well as raw materials from the Chakan plant premises. Yasmin Shaikh, the government labour officer, visited the Chakan factory and said they have started their investigation on this and would be reaching out to the company management regarding this closure.

The company in a notice sent by Mahesh Bhangale, VP, manufacturing, said technology of electric water heaters produced at Chakan was obsolete and declining demand for their products which led to decline in production. He said volumes reduced by 85% in 2015, 70% in 2017 and 87% in first half of 2018. Running this factory was not financially viable so it did not make business sense so the management decided to completely close the Chakan factory, Bhangale said in the notice.

Workers got two months salary, compensation as per Section 25FFF and Section 25F of the Industrial Disputes Act the rate of 15 days average pay for every completed year.

The company claims on its website that it is the Racold’s electric water heaters are energy efficient, innovative and best in class for storage and instant water heating solutions while the Racold’s gas water heater are ‘hot on technology’.

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