Ludhiana: Shut since June 2020, Atlas Cycles resumes operations

Lying shut since June 2020, country’s one of the oldest -Atlas Cycles -has resumed operations at its unit in Sahibabad, Uttar Pradesh. The last unit of the company was closed down three years ago owing to a pending dispute with the National Company Law Tribunal (NCLT) with the company citing shortage of funds as the reason through a public notice.

Atlas Cycles’ director CM Dhall confirmed that operations and cycle dispatches have been restarted from the company’s Sahibabad unit.

The resuming of operations has come as a respite to suppliers of bicycle parts in Ludhiana who have started receiving orders. With the closure of the unit in 2020, the suppliers in Ludhiana were left high and dry as Atlas Cycles reportedly owed over ₹120 crore to nearly 80 vendors, a number of whom had been its suppliers for several decades.

Dhall added that with the restarting of operations, the company will be settling all pending disputes over payments gradually to its suppliers in Ludhiana.

As per figures, as many as 54 cases filed by suppliers in Ludhiana are still pending before the MSME Council (Micro and Small Enterprises Facilitation Council) while another 28 were settled over the years. However, the suppliers still haven’t received their payment even after the Council’s orders in their favour. The pending cases before the MSME council have also been stayed as per an order of the NCLT, sources in the District Industries Centre (DIC) confirmed.

Manjinder Singh Sachdeva, leading bicycle parts’ manufacturer from Ludhiana, said while it is good news for Ludhiana’s cycle industry that the company has started operations, the suppliers will hesitate to deal with them owing to a trust deficit that has come up. “No one will be willing to supply parts on credit now, already the company owes money to various suppliers in Ludhiana. It is good news that they are back in business and we hope to be on good terms and on track with them soon once they make all the payments to the suppliers,” he said.

Ever since the news about the revival plan of the company broke, Whatsapp groups of business associations representing bicycle industry are abuzz with activity as businessmen are expressing their joy over the development. According to Charanjit Singh Vishivkarma, another bicycle parts’ manufacturer, “Ever since this unit closed in 2020, it had devastating impact on the bicycle parts’ manufacturing units in Ludhiana, as almost every bicycle part was supplied to the group by city based factories only and the suppliers suffered after the unit shut down.”

Unit has capacity to make 4 million cycles a year

The Sahibabad unit of Atlas Cycles has the capacity to manufacture more than 4 million cycles per annum with a 1,200-strong workforce.

In a public notice then, the company had stated that “Post lifting of lockdown with effect from June 1, 2020, the Sahibabad unit of the company is not in a position to resume manufacturing operations due to financial constraints. Hence, the workforce of the unit will be laid off with effect from June 3, 2020, till adequate arrangement of funds is made,” the company said in a public notice.

In December 2014, company’s Malanpur factory in Madhya Pradesh had closed down. In February 2018, Atlas Cycles (Haryana) said it was suspending manufacturing at its Sonepat unit with immediate effect.

Started by Janki Das Kapur, a man with dreams, in 1951, to provide quality bicycles to countrymen at reasonable prices, Atlas was a brand to reckon with even before Hero and Avon established themselves.

What started with an improvised factory shed in Sonepat in 1951, the company rose to establishing major plants in Malanpur (MP), Sahibabad over the years.