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West Bengal: FMCG giant Britannia set to shut down its historic Taratala factory in Kolkata, earlier Tata had left the state over the Nano fiasco

Earlier on 20th June 2024, Britannia stated, "This is to inform that a Voluntary Retirement Scheme offered by the Company to the workers at its factory situated at Taratala, Kolkata, West Bengal has been accepted by all the permanent workers of the aforementioned factory of the Company." 

FMCG major, Britannia Industries Limited, is all set to shut down its historic factory in Taratala, Kolkata which has been operational for more than seven decades. The biscuit-manufacturing giant recently informed the stock exchanges – BSE and NSE – that all permanent workers at its Taratala factory in Kolkata had accepted the voluntary retirement scheme (VRS) offered to them.

Notably, the Taratala factory is the second oldest factory in India, following the one in Mumbai. It was established in 1947. 

Earlier on 20th June 2024, the company stated, “This is to inform that a Voluntary Retirement Scheme offered by the Company to the workers at its factory situated at Taratala, Kolkata, West Bengal has been accepted by all the permanent workers of the aforementioned factory of the Company.” 

“There is no material impact on the business operations of the Company,” the company added in the regulatory filing.

According to reports, management has also initiated discussions with contractual workers regarding VRS. The closure of the Taratala factory is expected to impact approximately 150 employees. This decision comes as Britannia Industries confronts economic viability challenges. It follows the earlier shutdowns of Britannia’s older factories in Mumbai and Chennai.

Sources said the company has directly negotiated an agreement on the VRS with the employees and depending upon the period of service left, permanent employees have been offered severance packages ranging from ₹13 lakh to ₹22 lakh besides gratuity and PF. 

According to sources, the management has indicated to the employees that the plant, which makes biscuits under brands such as Good Day, Milk Bikis and Cream Cracker, has become old. 

Sources stated that the FMCG firm renewed the lease for the 11-acre plot in 2018 and that runs till 2048. However, the company found it cost-efficient to continue production at the unit. Although the factory has not been shut down, sources indicated that management is considering returning part of the land to the SMPT (formerly Calcutta Port Trust), which owns the plot. Meanwhile, several netizens have claimed that it is akin to the Tata Nano exit from the state and slammed the governance model of the state government led by TMC for the state’s economic loss.

Britannia Industries, one of India’s leading food companies, considers Bengal its third-largest market, generating over Rs 900 crore in revenue. In addition to its Kolkata plant, Britannia operates facilities in Bihar, Odisha, and Assam. In 2016, the company announced plans for a second unit in Bengal, intending to start operations by 2018. However, despite scouting locations in the state, the plan did not materialize. Instead, the company inaugurated its Assam plant in 2018 and recently established a second unit in Bihar in December 2023.

Notably, Britannia is not the first company to exit West Bengal over anti-business policies and attitude of the Mamata Banerjee-led TMC government. Earlier, Tata Group left the state over controversies surrounding the Tata Nano plant in Singur.

Back in 2006, the erstwhile Left Front government in Bengal had acquired around 1,000 acres of land in Singur and Hooghly. Subsequently, it handed it over to Tata Motors to build a Tata Nano manufacturing facility for job creation in the state.

However, the land acquisition was opposed by the then opposition leader and Trinamool Congress chief Mamata Banerjee, the current Chief Minister of West Bengal. As a result, Tata Motors had to shelve the Singur project but by then it had already invested over Rs 1,000 crore in the Singur plant. 

The automobile major later shifted to Gujarat and set up a plant in Sanand for manufacturing the Tata Nano. Tata Motors inaugurated a new plant to manufacture its Nano cars in Sanand in June 2010 almost two years after it was forced to shift the plant out of West Bengal because of Mamata Banerjee-led protest against the land acquisition. 

The Tata Nano’s Sanand plant was inaugurated by the then-Gujarat Chief Minister Narendra Modi along with Tata Group Chairman Ratan Tata.

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