Coupled with the slowdown, many sectors are battling for survival
These days, foundry workers in Coimbatore can often be seen waiting restlessly — in their lodgings within or near the factory — for an alert to resume work. And that happens only when power supply comes on.
The now-on, now-off nature of their work, because of the frequent power cuts, has left many workers — most of them migrant labour from the North-East, Uttar Pradesh and Bihar — frustrated. But there is precious little foundry owners can do.
The economic slowdown has shrunk orders 15-20 per cent. Coupled with power cuts running up to 14 hours a day, most foundries in Coimbatore are operating barely at 60 per cent capacity. With a few large customers shifting sourcing to other places, the once-bustling industrial city faces the real threat of permanent loss of clients if the power crisis persists beyond summer.
According to an industry player, at least two major customers have shifted their castings purchase to Ahmedabad.
The pumps and motors industry is also facing the heat from Rajkot and Ahmedabad which are nibbling at Coimbatore’s market share, says Jayakumar Ramdass, Managing Director, Mahendra Submersible Pumps. “Even if private power is sourced, this cannot be consumed as there is no grid power throughout the day.”
El Forge recently announced a layoff at its Hosur facility for the first shift (from 6 a.m. to 2 p.m.) for three weeks from December 7 to 27. Units in Madurai and Tiruchi too have reduced shifts to two a day.
“Juggling manufacturing schedules has thus become a nightmare,” says Vidyashankar Krishnan, Managing Director, MM Forgings, which has plants in Tiruchi, Madurai and Oragadam.
MM Forgings is tiding over the shortage thanks to its wind farm in Theni (which accounts for 60 per cent of its total power requirements) and a power generating captive. But its tier 2 and 3 vendors are unable to cope with the shortage.
“Many of our sub-contractors simply shut shop if there is no power and reopen only when there is power. If materials don’t come on time, our supply to vehicle makers gets delayed … making good the lost time is not easy,” says Krishnan.
At Oragadam, the hottest industrial belt near Chennai with over 400 units. the issue is that of sub-station overloading.
OWN POWER IS COSTLY
Managing power shortage means investing in own sources. And this has pushed up costs significantly.
With competition from foundries in Belgaum, Kolhapur and Ahmedabad, foundries in Coimbatore are unable to pass on the high cost to customers, says Ramdass.
IT SECTOR HIT TOO
Mid-size IT firms in Chennai with power-guzzling air-conditioners, servers and computers too have a tough time.
An official of a mid-size IT firm at Siruseri IT Park, near Chennai, said the company spends nearly Rs 5 lakh a month on diesel. It has tied up with Hindustan Petroleum and IOC for diesel supply. (Running a genset costs Rs 17 per unit.)
The State Government has asked the units here to shut down power one day in a week and run entirely on genset.
Typically, a mid-size company with one lakh sq. ft. of built-in space and employing about 700 people requires 800-1000 kVA per day but not even 50 per cent of it is provided by the government, says the official.
The power shortage in Tamil Nadu is estimated at 4,000 MW. The State expects the new power projects, including the nuclear power plant at Kudankulam, to reduce the shortfall in the coming months.
But the industry is sceptical. An industry veteran, who did not want to be named, said he does not have too much faith in Kudankulam. “First, let it go critical. Then it will take at least six months to get to 200-500 MW. Instead, wind power must be focused upon.”
Source: Business Line