Another plants shut off due to high manufacturing cost . Companies like Castrol have decided to stop production in one of its oldest lubricant plant .
In one the glaring example of the increasing manufacturing costs, Castrol India Ltd, a unit of BP Plc, has announced that it is closing its plant in Tamil Nadu. According to a report in The Economic Times, it waa mentioned that in a BSE announcement, the company cited a steep increase in its manufacturing cost per litre over the past several months.
It was reported that the plant would be closed from July 31 and the manufacturing activities would be phased out. The manufacturing plant is located at Tondiarpet in Chennai. The company stated "The Tondiarpet plant is one the company's oldest plants in the country and was faced with a situation of high landed cost of base oil leading to a steep increase in its manufacturing cost per litre over the past several months. This had adversely affected the production activities in the plant.’’
The reports mentioned that the company has also offered a voluntary retirement scheme to its employees working in the said plant. Employees have opted to separate by availing of the benefits under the scheme. The announcement came after market close on Friday, according to the report.