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July 19, 2001
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Money > Business Headlines > Report July 19, 2001 |
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Modern Foods effects big pay hikeBS Corporate Bureau Modern Food Industries, the 74 per cent subsidiary of FMCG major Hindustan Lever, has effected a significant wage hike in the company, post-acquisition. The company's wage bill has soared Rs 40 million, with an average increase of Rs 1,600 per employee per month. Modern Food Industries has around 2,000 employees. The company has said the wage increase comes despite the huge loss. However, the losses were curtailed at Rs 200 million in 2000-01 as compared with Rs 482 million last year. HLL expects that Modern Foods will begin to make cash profits in the next few years. The company will leverage Modern Foods' competencies and infrastructure to create an integrated wheat products business across the country. It will range from atta to chapattis, from breads to cakes and value-added wheat-based products. Bread sales in 2000-01, the first year under the HLL management, have increased to Rs 1.02 billion, compared with Rs 780 million in 1999-2000. The company has recently kicked off its voluntary retirement scheme at all the 19 factories of Modern Foods, including the four closed units (pre-divestment). This is because, the weaknesses of Modern Foods is its large workforce and relatively low productivity. It has invested around Rs 35 million for modernisation of its factories and has decided to invest more. Even though Modern Foods accumulated losses has exceeded its networth, HLL has not sought any rehabilitation under Sick Industrial Company. Modern Foods' daily distribution system covers about 70,000 outlets in 110 towns. Powered by YOU MAY ALSO WANT TO READ:
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