Twitter
Advertisement

Powerless firms slice work week, more pain ahead

The power shortage sweeping across the country is chipping away at the competitiveness of India Inc, if not its survival.

Latest News
article-main
FacebookTwitterWhatsappLinkedin

MUMBAI/ PUNE: The power shortage sweeping across the country is chipping away at the competitiveness of India Inc, if not its survival.

Lost production days, failure to meet delivery schedules and inability to test finished products are just some of the problems the companies are faced with.  And there is hardly an indication that things would improve soon.

Kirloskar Brothers, India’s leading manufacturer of centrifugal pumps and fluid handling products, hasn’t been able to test its finished products before delivering them customers due to erratic electricity supply.

RK Srivastava, director, Kirloskar Brothers said the company could raise 3 megawatt (mw) through captive generation, but needed at least 5 mw to test the pumps. “Till we do that, we can’t deliver the pumps to our customers.”

Manufacturers of components, ranging from ball bearings to sieves, have been hit harder on account of their limited captive power generation capacity. “We are facing trouble with our vendors,” said Srivastava.

The resultant delay at various stages of the supply chain is obvious.
According to Sudhir K Nair, research head of Crisil, for the April-June period, the peak load deficit in the country was at 14.6%, while the base load was at 10.1%.
Aluminium and copper smelting units, and ceramic tile makers will be hit the hardest by the power crisis, said Nair, while conceding that the pain is less because of the demand
slowdown.

The power shortage has forced many units across Pimpri-Chinchwad and Bhosari industrial estates in Maharashtra to curtail production.

The Pimpri-Chinchwad Small Scale Industries Association has declared a five-day-week for its 6,000-odd member units. Association president Suresh Mehtre said, “More big companies are likely to take a stand in this regard by next week. Once supplies from the ancillaries stop, it will automatically hamper the assembly line. But as of now, we have to go for a five-day schedule.”

Abhay Firodia, chairman and managing director of commercial and multi-utility vehicle maker Force Motors, which has its facility in the area, said the company has gone for a five-day week as it saw “no point in keeping the unit open if it wasn’t operating.” He, however, did not say how the move had affected production.

Force Motor will now run from Saturdays to Wednesdays, with Thursday and Friday being weekly offs for all departments. It will use the Pithampur plant in Madhya Pradesh to maintain synchronisation and continuity.

“Since both the facilities are running simultaneously, we have decided to close them both on the same days,” Firodia said, adding, this was the first time the company had been forced to announce weekly offs on two consecutive days.

For all that, however, companies catering to the auto industry have a breather of sorts as that industry is also facing a lean season.

Baba Kalyani, chairman of Bharat Forge, the world’s largest forging company, conceded as much.

But, with major plans on the anvil, auto major Tata Motors is taking no chances in Pune. It will soon add three more generators to add 30 mw to the current captive power generation capacity of 14 mw.

That, however, isn’t something smaller companies such as Kirloskar Brothers can emulate. After all, adding capacity is a costly affair.

Indeed, while buying from the grid costs about Rs 4.50 per unit, generating electricity through captive gensets can cost thrice that, although Crisil’s Nair pegs the cost at Rs 8-9 per unit, taking into account the official rate for diesel.

Service industries have been hit, too. And diesel shortages in the market have worsened matters.

Even KPOs and BPOs are facing a power crunch and IT companies in Pune are on a wait-and-watch mode.

Ganesh Natarajan, global CEO, Zensar Technologies said, “As of now, there is no change in our schedule, but if the situation prevails, we will have to rethink on the issue.”
Thankfully, most IT companies follow a five-day week with Saturday and Sunday as holidays, but there is a buzz about employees being asked to take a day off mid-week instead of the weekend.

Kirloskar Brothers’ Srivastava can only hope that things would change for the better. “After the recent spell of rains, we hope to get some relief from this shortage.”
Still, some players have managed to stay unscathed so far, more or less.

Industries located in states like Tamil Nadu, Gujarat and West Bengal are better off than those in Maharashtra.

Gujarat-based Elecon Engineering, though, isn’t taking chances. According to its CFO, Hemendra C Shah, the company, which also manufactures wind turbines for generating electricity, is going for a gas-based power generator.

Supreme Industries, which manufactures polymer products, is among the blessed ones. Its units in energy-surplus Pondicherry and Silvassa have stayed immune to the power crisis sweeping the country. In power-deficient Maharashtra, on the other hand, it has invested in two substations of Rs 10 crore each to partly offset the pressure.

All the same, Supreme isn’t entirely unaffected. According to managing director M P Taparia, process industries need uninterrupted electricity supply to function optimally. “If the quality of power is not maintained, factory rejections go up.”

Find your daily dose of news & explainers in your WhatsApp. Stay updated, Stay informed-  Follow DNA on WhatsApp.
Advertisement

Live tv

Advertisement
Advertisement