Facing market uncertainty, almost all employees of the Pune-based Roplas India Ltd., engaged in the manufacture of fibreglass reinforced plastic (FRP) bodies for automotive application, have availed t…
Facing market uncertainty, almost all employees of the Pune-based Roplas India Ltd., engaged in the manufacture of fibreglass reinforced plastic (FRP) bodies for automotive application, have availed themselves of voluntary retirement scheme. Top company officials said that 259 employees, comprising the complete “bargainable category” of the workforce, accepted VRS, fetching on an average Rs 2.93 lakhs per employee. Only 16 officers, retained for “residual work,” remain. Roplas India has only one labour union. Mahindra & Mahindra Ltd. (M&M) has a 9.8% equity stake in Roplas India. Rubery Owen of the UK is estimated to own around 10% and the engineering firm, Schendecty, between 5-6%. The balance is with the public. Senior M&M officials said that Roplas India was started several years ago to supply FRP bodies for M&M“s utility vehicles (UVs). These bodies were mostly in use when the domestic UV market started to seek hard-top UVs against M&M“s predominantly soft-top range. Notwithstanding a wider clientele now, a significant portion of Roplas India“s produce is bought by M&M. “We have adequate supplies lined up. M&M“s UV production will not be affected by the developments at Roplas India,” Mr. Alan Durante, executive director of M&M, said. While denying knowledge of any proposed equity shuffle, when asked of the company“s future, a top Roplas India official said: “This is an issue we now have to grapple with.” Roplas India was reporting bad financial performance for the last couple of years. In 1998-1999, the company incurred a loss of approximately Rs 27.07 lakhs, which grew to Rs 2.19 crores on a sales turnover of “under Rs 10 crores” in 1999-2000, an official said. In 2000-2001, up to July, the company posted a loss of Rs 75 lakhs. The dip in fortunes was reportedly due to technological and process limitations. FRP bodies quickly gave way to steel bodies in hard-tops as the Indian UV market matured, eroding overall business for Roplas India. The company“s productivity level was also poor. “Our quantum of business was dwindling, wages paid increased with every revision and the market price for our products was not supportive,” a senior Roplas India official said. In fact, FRP-based manufacture is popular in the small-scale industry (SSI) sector and there is SSI competition for Roplas India“s products. Furthermore, M&M officials said that the “hand lay-up” process of manufacture used at Roplas India, besides being labour-intensive, was best suited for low-volume production. “As long as the products made required only small numbers, it was fine,” a M&M official said illustrating the pincer situation limiting growth in FRP at Roplas India, leading to the current situation.