ON WORLD BICYCLE DAY -FUND CRUNCH PUTS A BREAK ON ATLAS CYCLES
Unfortunately, the Company was forced to shut down its last manufacturing plant on June 3, 2020 which is the world bicycle day.
Atlas Cycle-a brand which became synonymous for bicycles in India and probably the brand which gave most of us our first cycle, now pulling down the shutters.
The legacy of the Company
1950 – Year of beginning
1951 – Setting up of 1st plant in India.
1965 – Became the country’s largest cycle manufacturer
1982 – Became the official supplier of bicycles for the Asian Games.
The Closure of The Last Manufacturing Unit
Due to the financial crunch the company was forced to shut its last manufacturing unit in Sahibabad, Ghaziabad (Uttar Pradesh) as it was not in a condition to run the show. This plant was started back in 1989 and was the biggest plant in the country, which managed to produce 2 lakh cycles every month.
What the Notice Says
On June 3, 2020, a notice mentioning the financial crunch was pasted on the factory gate. This notice mentions about the difficulties which the company was facing for running its day to day operations. As per this notice, the company was not in a position to buy even the raw materials for the production.
Employees Severely Impacted
Almost 700 hundred employees will be affected due to the closure of this plant. The employees claimed that the unit was shut without any prior notice. Although the company insists that these “laid off” employees continue to be on company’s pay-roll and they will be entitled for the layoff wages once they mark their attendance regularly.
The laid-off employees have been asked to mark their attendances on daily basis (except weekly offs); failing which the employees would lose their statutory right over the due entitlements.
How the Downfall Started
The problems for this company started in 2014, when it started making losses, which forced the company to close its first manufacturing plant in Malanpur in December, 2014. The continuous losses further hampered the growth and this lead to the closure of another plant situated in Sonipat, Haryana in February, 2018.
Sonipat plant was the first unit of Atlas cycle which was established in 1951. The current lockdown due to Covid-19 pandemic was the final nail in the coffin for the company.
The Silver Lining
The CEO of the company, Mr. N. P. Singh Rana insisted that the closure of this plant is temporary and the operations will resume once it raises a fund roughly around 50 crore. As per the CEO, the Company has already placed an application before the NCLT for seeking the permission to sell out company’s surplus land.
The company hopes that once the permission is granted and after the subsequent selling off the surplus land, there will be availability of ample amounts of fund which would enable them to the run the business as usual. As per the CEO, the company is very much confident of bouncing back.
Edited by Dr. Ratn Ranjan Pandey
Want to get your business journey featured on CLIQTAX ? Send an email to us at firstname.lastname@example.org