MAVOOR: Oru Deshathinte Kadha - Vol. II

The Bad Times:

When Mavoor GRASIM planned to start its operations, the government had agreed to provide it with all the necessary raw-materials. This was done considering all the employments and revenue the company will help generate. But the employment generation came to a stand-still towards the end of 60's. While the demand for raw-materials was ever growing up, so much so that large tracks of virgin forests in Nilambur and elsewhere were laid to waste. The government could no longer satisfy the demand, forcing the company to export most of the stuff from neighbouring states. The company tried to counter the increased costs by passing over them to the employees. People were now getting no hikes nor bonuses for years on end. Those who joined with much better salaries compared to elsewhere, found that their pays just stagnated. The labour unrest arising out of this and the mounting costs made the company to close down the operations for the first time in 1985.

And so it remained closed for a long time. These were the hardest of times!. Some wise men managed to move to Gulf and escaped forever. But for some there was no future outside Grasim. The next three years saw numerous suicides in Mavoor. And finally when the Nayanar Ministry came in, the government went down on its knees to appease the Birlas, promising more and more concessions, and finally managed to re-open the company in 1988.

But by then things had changed irrevocably. Protests were growing from all around on the pollution caused. But the company went ahead, blatantly refusing to accept any pollution control norms. I remember my Dad saying this about the Effluent(waste) water treatment. Whatever, pollution control system that was in place was used only during the summer months, when there was little water in the river, and so it wasn't easy to hide the pollutants. During the monsoons, when Chaliyar roars down, nothing was done and the effluents were just flushed down, hoping that nobody will notice them by the time they reached the sea.

Also, pulp production here was becoming more and more costlier. Lack of Bamboo meant the company had to use many other varieties of wood (like eucalyptus), which inturn affected the quality of the pulp produced. By then, Grasim had another similar factory in Harihar near Bangalore, where they were able to get raw-materials much cheaper. Also, falling prices globally meant that it was more easy and economical for Grasim to export pulp rather than produce here. But still the Mavoor unit was not in red, it was making handsome profits, mainly because of CS2 (Carbon -disulphide) and Ammonia plants (which were also the killer ones as far as pollution was concerned) and because the employees were all so underpaid. But the final blow to Mavoor Grasim, came with the death of Aditya Vikram Birla in 1995.

His son, Kumar Mangalam take over. Like any other Harvard/Stanford MBA, the first thing he did was to put some of the latest management principles into practice. Nothing more than CK Prahlad's memo to "concentrate on one's core competencies" . Many businesses were sold off and dismantled. And the first one on the chopping block was the "problem-ridden" and "obsolete" Mavoor unit. Many people still believe that if AV Birla was there, the factory would still be up and running in Mavoor.

The late 1990's saw large scale agitations from the environmentalist groups, and so the demand for more investment in pollution control systems. And GRASIM wasn't willing to invest even a penny more. The end when it came, came very swiftly. In 1999, the Birlas informed BSE that they were winding up operations in Mavoor. The reasons given: Inability of the government in providing the promised quantity and quality of raw-materials and the availability of quality pulp at more cheaper rates in the international market. Thus came the end of an era, with more than 3000 employees losing their job and left to fend for themselves.

Many people still believe that it was a victory of the environmental groups, that it was due to their agitations that Mavoor Grasim finally closed down. No way... If Grasim could make substantial profits it would still be running there, grossly violating all pollution norms, and the industry starved governments of Kerala would have just kept their eyes shut. It was just a case of a corporate focusing into areas which gave it much higher profits, ruthlessly leaving behind stuff that it felt were no longer viable, no longer its "core -competence"...

(go to ... PART I, PART III )