NEW DELHI
HINDUSTAN Lever on Wednesday said it had closed down its tea-packaging facility in Kanhan, near Nagpur, due to unviability and has given voluntary separation scheme to all the employees there.

When contacted, an HLL spokesperson said all the 364 employees at Kanhan had been given VSS in December last year as the facility had become unviable.

"The factory at Kanhan had become unviable. Reasons for this unviability include sluggish growth of the Indian tea industry and high conversion (processing and packaging) cost of tea at Kanhan," said the spokesperson.

He said the conversion cost of tea at the factory was approximately four times that of any other tea packaging facility of HLL, adding that the Nagpur plant had a capacity of 7,000 tonnes per annunm. The tea facility, one of the oldest of HLL, housed an automated packaging plant for Taj Mahal tea bags apart from other brands and packagings.

The spokesperson, however, declined to divulge the monetary details of the VSS package and the total cost HLL bore in this scheme. Giving details of the components of VSS, the spokesperson said the package consisted of a maximum lumpsum amount allowed as per the guidelines of Income-Tax Act in addition to grant of monthly pension which varies with different categories of workmen.

Apart from the statutory benefits like provident fund, gratuity the company also gave benfits as per its own superannuation scheme as applicable to these workmen, he said.

As a part of its brand restructuring exercise, the company had also phased out its low-end tea brand 'Lipton Tiger' even as it test-marketed Lipton Ice Tea in Hyderabad with encouraging results.

However, in the tea/instant tea and coffee categories Brooke Bond Red Label, Brooke Bond A1, Taj Mahal and Lipton Ice Tea saw hectic activity in terms of relaunches and promotional initiatives last year.