The Hindu : Tamil Nadu / Coimbatore News : Furnace oil comes to the rescue of production

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Monday, Dec 15, 2008
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Tamil Nadu

Tamil Nadu - Coimbatore

Furnace oil comes to the rescue of production

Staff Reporter

Decline in its prices come as a boon

1.7-megawatt (MW) furnace oil captive power plant not under operation
It has to be run round the clock and garment units might find it difficult to use the entire load

COIMBATORE: For industries in the State that had established furnace oil captive power plants, the decline in furnace oil prices has come as a boon, at least for now.

Manikam Ramaswami, chairman of the Confederation of Indian Industry – Tamil Nadu, says that with the price at Rs.16 a litre, running the furnace oil captive power plants is attractive now.

If the prices were to go up to Rs.19 a litre, it will not be viable.

For those who have established the plant and do not have the interest and depreciation costs now, the variable cost is the same as grid power cost. Hence, the units are using it.

However, a 1.7-megawatt (MW) furnace oil captive power plant, established in 2005 for the garment units at the Netaji Apparel Park at Tirupur, is not under operation.

According to A. Sakthivel, chairman and managing director of the park, even at the current level of oil prices, it is not viable to run the plant now.

The furnace oil plant has to be run round the clock and garment units might find it difficult to use the entire load.

The production process in garment units is not continuous, he adds.

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