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| Wednesday, 20 October 2004 |
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National Paper Corp. to open Embilipitiya mill soon by Shirajiv Sirimane
The National Paper Corporation Ltd has decided to reopen the Embilipitya Paper mill soon. Minister of Infrastructure Development (Eastern Province) L. M. Athaulla has taken the initiative in this regard and a series of discussions with the Trade Unions, Engineers and staff have been already held. The Mill had been closed for a long period due several problems. One of the main problems faced by the factory was the accumulated electricity bill amounting to Rs. 29 million. According to the General Manager of the National Paper Corporation Ltd, J. C. A. Abeyatne the Minister has also successfully negotiated to iron out this problem with the relevant authorities so that the mill could function again. The Minister has also negotiated with the Trade Unions in the presence of PERC officials and had assured their that there problems would be solved after reopening the mill. Abeyratne said that another problem was the lack of raw materials and the need to upgrade machinery to reopen the mill. The Minister has assured a grant from the government for this purpose. He has already released Rs. 5 million towards the purchase of urgent machinery of the Valachchenai mills One of the major problems faced by the Embilipitya and Valachcheni Mill is the lack of raw materials and the low priced paper which is imported. The basic raw material needed to manufacture paper is waster paper. Today the bottle man collects this waster paper which is exported to India. Due to this there is a scarcity of raw material since the Paper Corporation can not match the prices offered by Indians. Sri Lanka exports around 6000 metric tonnes of waster paper per month while the National Paper Corporation Ltd requirement is 1,500 MT. "We hope to make representations to the government to allow only a maximum of 3,500 MT to be exported so that the bottle man too would not go out of business," he said. The National Paper Corporation Ltd has also launched a major marketing drive to sell the produce expected from the two mills. Some of the main buyers for the Corporation had been the Department of Examinations, Government Printer, State Printing Corporation and Ministry of Education. "We have successfully renegotiated with these institutions to repurchase our products," he said. He said that the cost of furnace oil has increased by over 400 percent and they are now in the process of bringing down Indian technicians to explore the possibility of using paddy husk and saw dust to replace oil. The former Minister of Industries in the previous government created the biggest problem for the local paper industry by reducing the import tax on paper from 40 percent to 10 per cent. "This reduced the prices of paper in he market and the Corporation could not compete with the imported products which resulted in the closure of the Embilipitiya mill," he said. He said that if the previous government had warned of such a reduction of duty in advance the corporation could have taken some counter moves or come up with some suggestions. However such a warning was not given. This has also resulted in the National Paper Corporation Ltd, losing around Rs. 150 million per annum. The Treasury has to pump in Rs. 11 million every month to pay the wages. "This was an institution which used to earn a profit of over Rs. 100 million annually," he said. The General Manager assured that when the two mills are running at full capacity they would be able to be self sufficient in finances by next year. |
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