The Hindu : Tamil Nadu / Chennai News : Manufacturing units at the receiving end Power crisis

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Monday, Jan 05, 2009
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Tamil Nadu

Tamil Nadu - Chennai

Manufacturing units at the receiving end Power crisis

N. Anand

Some of them are planning to buy more captive power generation units or cut production

— Photo: N.Sridharan

UNSCHEDULED BREAK: Power crisis has affected not only major industrial units but also shops and retail outlets. An announcement at a shop at Thiruvanmiyur in Chennai.

CHENNAI: For the past few months, big and small manufacturing units in the State have been facing hardship on several counts. However, in their assessment, what has hit them the most is the non-availability of power, and not the global meltdown or the recent floods.

To keep humming, small-scale units are meeting their power requirements by using captive power generation units. Medium and large units are buying power under the open access system, but are not comfortable. They are keeping their fingers crossed.

Some of them are planning either to buy more captive power generation units or cut production. They want the authorities to liberalise the rules governing third-party purchase. Manufacturers of garment hangers, piston assemblies for automotive industry and organic peroxide say their competitiveness has eroded in the recent months by the 15 per cent increase in the cost of raw materials, which they have not passed on to customers.

R. Mahadevan, group technical director, India Pistons, says continuous processing units like his company cannot afford to have power cut or power holidays, as automotive industries are mainly dependent on their products. Power is constantly required for foundry and forging operations that provide feed for completing the finished products. India Pistons has been meeting 60 per cent of its power requirement from the TNEB, and the rest through open access. It has been requesting the State government to allow inter-State third-party purchase. This, it argues, will encourage more and more people to invest in power production. “Our group requires at least 10 MW and setting up a captive power plant of this magnitude will easily cost Rs.50 crore. At this juncture, it is not worth investing in power…,” Mr. Mahadevan says.

The France-based chemical giant Arkema Peroxide India has a different problem. Its energy bill is roughly Rs.8 lakh a month. The firm, which has a manufacturing unit at Cuddalore, has a captive power generator. Besides, it has hired one more captive generator from a private party for three months, from December. Arkema Managing Director N. Subramanian wanted to buy power through open access, but could not because the TNEB insisted that the minimum purchase be 1 MW. The shortfall was 0.4 MW. (Last week, the Board decided to relax the norms for third party purchase, bringing down the ceiling to 500 kilowatt). “We do not have the luxury to go in for a system of power holidays as suggested by the authorities. If we stop production for a short period, all the polymer units in India may have to down their shutters. We will have to pay penalty to our overseas clients if there is a delay in delivery schedule. We are now planning to go in for one more captive generator to meet the schedule,” says Mr.Subramanian.

Bhayani Plastic Industries is a 100 per cent export-oriented unit that makes 75,000 garment hangers per day. It consumes roughly 18,000-20,000 units of power a month.

Now it depends on captive power generator sets that have pushed up the cost of raw materials by 15 per cent.

Managing Director Atul P. Bhayani says his firm cannot afford to have a power holiday at all, as it is one of the very few players in the country to supply garment hangers to well-known firms. The company expects a 15 per cent drop in the order book in the coming months.

“Most of the units in the Vyasarpadi industrial estate are not functioning owing to the dearth of orders. While we have been allotted less than our requirement, we have been requesting the TNEB to allocate the unused power. But our plea has failed to get the desired result,” says Mr. Bhayani. To tide over the situation, Mr. Subramanian is also thinking of reducing the production at the Cuddalore unit by 20-25 per cent and move the production to China from where the requirements of the South East Asian markets will be met.

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