Reliance Industries has closed five of its seven polyester and petrochemical units at Patalganga near Mumbai soon
after offering exit option to employees, said sources close to the development.
The move, which comes in the backdrop of a global slowdown, aims to improve profit margin amid falling demand for polyester products worldwide.
"The company has shut down plants for manufacturing polyester filament yarn, polyester staple fibre, paraxylene, purified terephthalic acid and linear alkyl benzene. However, it is yet to close down the second units of PSF and PFY," sources said.
As per an agreement reached with the employees' union, the company had given exit offer to almost 800 non-supervisory employees at Patalganga.
About 500 employees in this category such as operators and machine maintenance technicians have accepted the golden handshake scheme which is yet to be closed, said sources.
"Employees having a minimum of 3-5 years of experience have been offered about Rs 20 lakh as compensation.
"Majority of the remaining 300 employees are expected to accept the offer in the coming days. For the last one month, production from these units has been partly paralysed and employees were sitting idle," said sources.
When contacted, an RIL spokesperson declined to comment.
There are rumours among the workers that part of the closed plants would be shifted to group company Indian Petrochemical Corporation's facility at Nagothane in Maharashtra.
"We heard that the company has plans to convert the Patalganga site into a warehousing facility for retail activities due to its proximity to Mumbai," added sources.
The company had recently converted another IPCL facility in Navi Mumbai into Reliance Corporate Park, which is envisaged to be the controlling hub for the Mukesh Ambani group's global operations.
The company plans to upgrade and automate most of the old polyester units since the profit margin from operations have shrunk after the price rise of crude oil, the raw material for polyester.
RIL had shut down its polypropylene plant at the Jamnagar refinery complex for a month to improve product swing capability and increase propylene yield.
It closed down a polyester intermediate mono-ethylene glycol manufacturing facility at Kurkumbh near Pune last year, to house centralised storage facilities for its retail operations under Reliance Retail.
The Patalganga manufacturing division is spread over 200 acres. According to the company Web site, RIL has invested about Rs 3,000 crore (Rs 30 billion) at the location.