MP: Lacking Funds, India’s Oldest Paper Mill Not In Operation Since 2016; Employees Protest

Sromona Bhattacharyya

May 29th, 2018

The residents of a quaint industrial township in Madhya Pradesh’s Nepanagar have been facing crisis ever since Nepa Paper Mills, the oldest mill in Asia which produced newsprint, stopped its productions in 2016.

It has been more than one and a half years since the mill has closed shop, which forced the mill’s management to reappropriate its employees who were otherwise engaged with paper production to other subsidiary activities of the plant. To add to the woes of those who work at Nepa Mills, the salaried workers haven’t been receiving their monthly salaries as well.

At present, the residents of Nepanagar, coupled with the mill’s distraught employees have been demanding for the government to provide sufficient funds to reopen operations soon.

Sanjay Dandawate, General Secretary of Executive Staff Committee at Nepa Mills, while talking to The Logical Indian said, “Most of the workers have no work to do at the mill, and unless the government releases more funds, we are unable to continue with our operations.”

Nepanagar, a small township of about 29,000 people is mostly sustained by Nepa Mills, which also serves as a source of livelihood for the thousands of people in surrounding villages. In an attempt to draw attention to the dismal conditions, around 2000 residents joined hands to form a human chain on the mill’s 62nd anniversary in late April 2018.



The History Behind The Protests In Nepa Paper Mills

Established in 1948, the mill started operations in 1956 with a capacity of 30,000 tonnes per annum. Subsequently,  the mill underwent expansion projects in 1967, 1978 and ‘89 to increase its production to 80,000 tonnes per annum.

Considering the fact that the mill is a Public Sector Undertaking (PSU), talks of reviving it started in 2009 and 2010, which later materialised in the form of financial assistance of Rs. 1026 crore which was given by the then Congress-led UPA II government in 2012.

The mill which served as the only newsprint supplier in India in 1981, lost much of its relevance during the post-globalisation days. Reducing sales as well as paper qualities led Nepa Limited to incur recurring losses.

Out of the consolidated fund, Rs. 285 crore was exclusively set aside for renovation. “The 60-year-old machinery was left incompetent. We needed to increase production, and hence, money was needed to dismantle the two production units,” said A N Sonsale, CMD of Nepa Limited, while talking to The Logical Indian.



Problems started when the government had already sanctioned Rs. 157 crore for the above-mentioned purpose, however Rs. 128 crore was to be received in the form of a bank loan, which never got through.

A N Sonsale claimed that for the second instalment, the bank required the Government to act as a guarantor, which got denied. “We had anticipated that it would take only a couple of years to finish the revival projects and start production. However, lack of clearance from revival Mill Development Plan (RMDP), the Board of Industrial and Financial Restructuring (BIFR) delayed the project by four years,” he added.

With constant delays, the project costs have increased by Rs. 150 crores to become Rs. 434 crores. Dandwate said, “Now, we just want the government to provide us with the amount that the plant needs for revival.”

The trouble does not end there. With the closure of the mill, Nepa Limited has been struggling to pay its salaried staff. Dandwate said, “The workers do not get paid every month, and when they do, it’s only a certain percentage of the salary and not the full amount.”



The Way Forward

Amidst the confusion over funds, the machines in the once bustling paper mill have been gathering dust. The residents, with the aim of drawing attention to the dying mill, have been engaged in a number of non-political protests. One such youth, Komesh Firke of Nepanagar, with the bid of making this local movement gain national momentum, has created a Facebook group, “Nepa Bachao Samiti”.

Through this group, which has over 3000 members, Komesh wishes to bring the much-needed issue of his town into the limelight.

Talking to The Logical Indian, he said, “ It is just not about the 700 people who are working there, the mill is attached with the feeling of thousands of residents of our town.”



He further added, “If our demands are not met with, we will vote for NOTA in the upcoming state elections.”

The company’s management is presently waiting for the sanction of the stipulated amount. They are hopeful that the funds are going to come through in the next one month’s time. “We had sent a cabinet note in which we have asked for a year’s time to start operations after the funds have been released,” added Sonsale.

The plant, after its rejuvenation, can produce up to one lakh metric tonnes of paper each year, which is more than 40% of what it used to before it was shut down.


Nepa Paper Mills

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