Aditya Birla Group's

Gwalior Rayons factory

at Mavoor
GROUP

Stage - Mavoor
Until the 1960s, Mavoor was like any other village in Kerala.

Back Ground
Gwalior (Grasim later)
Rayons

1963s the industrial house of Birla established a factory named

'Gwalior Rayons' (later renamed as Grasim) at Mavoor for
producing pulp and fibre in 316 acre's of land.
1968 Rayon production commences at Mavoor, Kerala.
1968 85 Operated for about a decade an half

In 1985 Grasim shut down for 3 years.

@ Mavoor

1988 2000 Resumes operations

2001 Grasim closes its pulp plant at Mavoor (Claiming as a part
of its restructuring initiatives).

 The management affected due to government policy on raw material supplies.

The factory, which has a production capacity of 200 tonnes per day, needs 3.6
lakh tonnes of raw material - mainly eucalyptus and bamboo - annually, to work
at full capacity.

When production began in 1963, the company bought 30,000 acres of forest land
from a former prince.

The
Management
view
of actions
leading to the
Issue

But in 1971, the Kerala Government nationalised private forest land. The unit
then had to depend on raw materials from neighbouring states.
But later, these states banned the inter-state movement of bamboo and
eucalyptus to protect their own industries.
State Government started diverting raw materials from Grasim to the newly set
up Hindustan Paper Corporation (HPC) at Veloor.
With the Government supplying only a third of the raw material required, say
factory officials, capacity utilisation slumped.

Kerala operations have resulted in a loss of Rs 21.39 crore, as a result

(Government policy of providing HPC raw material at Rs 12 per tonne, while he
pays Rs 550 per tonne, - In Tamil Nadu, the rate is Rs 150 per tonne. Company's
request for the supply of raw material at Rs 220 per tonne has had "some positive
response" from the state Government.

The management had minimized use of any pollution control measures,

citing profitability concerns.

A large quantity of pollutants produced by Grasim ended up in the Chaliyar

Tradeoff Economical vs.

Environmental

river which flows beside the factory.

The thick effluents recklessly released by the factory have been identified
as poisonous.
Besides the water pollution, the factory was also a serious air polluter.
The impact of the pollution could be seen in the every aspect of the town.

Tradeoff Economical vs.

Environmental
contd..

Impact - asthma and other respiratory diseases shot up, marked

decline in the fish population, thousands of dead fishes and other
aquatic forms surfaced from Chaliyar river.

Health of
Employees &
Public

All these factors contributed to the shut down of Gwalior Rayons

in 2001.

Environmental organizations started agitations focusing on this

aspect of the factory.
The factory faced many protests as it turned out to be a heavily
polluting unit.

It was also, the First Environmental Movement In Kerala.

Trade
Unionism

Though the unionism was there to assure employees welfare they

were also keen to protect the 3000+ jobs associated with the
Mavoor plant
However, a series of labour strikes and heightened trade union
was also witnessed at the plant, which contributed to the plants
disclosure

Ethical
Legal
Economical
Fiduciary
Frame

Legal

Economic-Social

- Pollution norms
not adhered to

Closed down the

company leading to
significant disruption of
local economy

- Concessional
agreements with
the state
government

Employees displaced and

suicides
Ethical

- Company avoided the use

of any pollution control measures to reduce
the operational costs
- Large quantity of pollutants from

factories accumulated in the Chaliyar river

- Increased air pollution
health issues

Questions ?

Thank you