Modern Food Industries Ltd (MFIL) has decided to close down its supplementary nutritional foods (SNF) factory in Delhi which was lying idle since the end of March 2003 for lack of orders.MFIL, one of the earliest cases of disinvestment by the government, was acquired by Hindustan Lever Ltd (HLL) which bought 74 per cent shareholding in company. Since then, HLL has acquired the remaining 26 per cent, making MFIL a 100 per cent HLL subsidiary.At the time of disinvestment, 50 per cent of MFIL’s turnover came from bread and 46 per cent from SNF. The bread business made losses while SNF was profitable, which enabled MFIL to partially recoup losses incurred by the bread business. As much as 90 per cent of the SNF turnover came from orders placed by the Uttar Pradesh government for the state funded ICDS projects, stated a HLL press release.However, after nine years of business, the UP government suddenly stopped placing further orders to MFIL for supplies of SNF products, the press release added. Instead, the UP government has taken to placing orders from other private parties on a monthly adhoc basis, the release added. Since the shutting down of the plant in March, MFIL has been incurring full wage costs of the SNF business. Though relocation to other factories and voluntary retirement was offered to 71 workers, only one agreed to relocate.
