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Foundry Daily News

07. January 2009

India - Coimbatore Industries In Crisis

With power shortage continuing, industrial units in the Coimbatore region have adjusted their schedules to optimise production even as they keep seeking measures from the government to ease the burden. With the implementation of the 40 per cent demand and energy cut for high-tension consumers since November 1, these units have changed their shift timings and reduced the workforce. A handful of them are buying power from private producers. What is of concern is how long the industries will be able to continue with these arrangements.

They need to be cost-competitive. Using generator sets or buying power escalates production cost by minimum of 15 per cent. Industries generate revenue for the government but the entire burden of power shortage has fallen on them, laments Aditya Balasundaram, president of the Coimbatore chapter of the Institute of Indian Foundrymen.

Textile mills, steel foundries and engineering units account for nearly 80 per cent of the high tension (HT) consumers in Coimbatore district. The medium and large-scale foundries could show moderate results for another two months. Workers who do not have jobs now will also be able to pull on for another two months with their savings. The crisis is expected to worsen thereafter, says Mr. Aditya Balasundaram.

When the government announced a power holiday proposal, these units sent telegrams to the Tamil Nadu Electricity Board and the government, opposing it. They wanted a long-term solution besides a reduction in power cut. Foundries that are catering only for the automobile sector have been badly hit by the slump in demand. Those that do not depend fully on the automobile sector are unable to fill the orders in hand owing to the power shortage. During the last two months, the foundries have downsized their workforce quite a bit.

Melting cannot be done using generator, since the power needed is substantial. The units use generator sets only for non-core activities, says Mr. Aditya Balasundaram. The units face not just escalation in production cost but also production loss, since all machinery cannot be operated using a generator set, says Jayakumar Ramdass, president of the Southern Indian Engineering Manufacturers' Association. Both in the engineering and textile sectors, several small and micro units have gone out of business in the past few months.

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