Lack of working capital, coupled
with high processing cost, has forced the government undertaking Kerala State
Cashew Development Corporation (KSCDC) to close down its factories. With the
closure of 30 factories run by the corporation about two months ago, 18,000
workers, mostly rural women, have been rendered jobless, R Chandrasekharan,
Chairman, KSCDC, told Business Line.
Chandrasekharan said the Corporation had been running the factories to provide employment to poor women in rural areas. They were operated on social, cultural and humanitarian considerations rather than profit motives, he said.
The Corporation has been
suffering losses ever since its inception in 1969. It has been providing
employment for only 88 days a year from 1969-70 to 2004-05. The total turnover
during the period was `1,394.73
crore while the loss incurred was `416.63
In a bid to raise the number of
working days, the government permitted the corporation to operate under the
principle of ‘Freedom with Responsibility’.
Because of the delay in getting
working capital from the government due to bureaucratic hurdles, the
corporation resorted to a method of “suppliers’ credit and buyers’ advance” and
operated factories for 222 days a year, he said. Following the introduction of
this method, the turnover increased substantially to `1,394.73 crore between 2005-06 and 2014-15 with a
total loss of `263.40 crore.
“When you purchase the raw cashew
nut on credit, naturally you have to pay a higher price. Similarly, when
advance is taken from the prospective buyer you have to sell the kernel at a
lower price. The corporation had to follow this practice to keep the factories
running to provide employment to its workers,” a highly placed official said.
In the domestic market,
indigenously produced raw nut price was ruling at around `100 a kg while the cost of
imported raw nuts was around `70
According to Chandrasekharan, out
of 30 factories under the possession of the corporation, 10 belonged to the
government while 20 were taken over from the private sector. The Supreme Court
has ordered the transfer of 10 factories held by the Capex to the private
parties from whom they were taken over.
Non-provision of working capital
to the corporation for long and the consequent closure of the factories could
pave the way for the return of the other 20 factories also to private parties,
Chandrasekharan said. No- implementation of the revised wages in the
corporation-run factories would also help private processors, whose 700-odd
factories remain closed since April 1, not to implement the government’s
decision to hike the wages of an estimated three lakh workers, mostly women, he
He has urged the State government
to look into the matter and initiate steps to save the interests of thousands