Pics: Dayananda Kukkaje
Daijiworld Media Network - Mangalore (MD)

Mangalore, Sep 24: Bad news just doesn’t seem to end for the King of Good Times, Vijay Mallya. Mangalore Chemicals and Fertilizers (MCF), partly owned by Mallya, is facing closure after September 30. Moreover, as per sources, the tag of 'wilful defaulter' by United Bank of India has jeopardised his position on the MCF board.

MCF is the only manufacturer of chemical fertilizers in the state of Karnataka and was founded in 1974, in Baikampady Industrial Area, Dakshina Kannada district. During that time, MCF was owned by the central and state government. During 1990, under the ownership of the centre and the state, the company started facing sudden loss. When losses occurred, it was Mallya who came to the rescue of the company. The UB Group owned by Mallya purchased 22 percent of the share capital while the rest remained with the Government. The company has an annual turnover of Rs 3,700 crore.

Recently, the central government issued orderd to MCF to stop production of urea from naptha and switch over to LPG by end of September, or face closure.

Speaking to the media, president, Surya Narayan, Mangala Karmika Okkuta, said, “The reason for shutting down MCF is not the loss; in 2011, the UPA led central government had given orders to close down the company. The UPA government had ordered shutting down of the industries which produce urea from naphtha (a flammable oil). Prior to this, the UPA had ordered the starting of usage of naphtha-based components with the help of gas connectivity. But in this context, MCF recently invested about Rs 305 crore for conversion of the plant for the usage of gas. So, the company is fully equipped to receive the gas and start manufacturing urea using gas. But GAIL (India) Limited has failed to provide gas connectivity as the pipeline connection is completed only till Kochi.

"As the deadline given by the previous (UPA) government has got over, due to unfinished work, the NDA government has ordered MCF to complete the work by September 30. MCF has failed and the pipeline connectivity also has not been completed, forcing MCF to produce urea using naphtha. The government has stopped giving subsidy for naphtha and has ordered stoppage of urea production by naphtha from September 30,. Therefore, MCF is on the verge of closing. If that happens, more than 2,000 workers will be on the streets,” he added.

Mangala Karmika Okkuta secretary Govindayya, blaming the government, said that it has failed to provide gas pipeline connectivity and so the company is shutting down.

He also requested that until the gas pipeline is connected, the naphtha-based urea production be allowed. “In this regard, a delegation was sent to the central government and it is up to our Prime Minister Narendra Modi to decide whether to shut down or continue the company,” added Govindayya.

Meanwhile, MP Nalin Kumar Kateel had recently said that the central government would provide subsidy for three more months for the production of urea using naptha, and that he had appealed to the government to extend this subsidy till MCF gets LPG supply.