Chennai

Industrial climate takes a hit

Since May 28 last year when the State pulled the shutters on the “polluting” Sterlite Copper unit of Vedanta Group in Thoothukudi — a week after 13 persons were killed in police firing on anti-Sterlite protestors — the industrial sector has moved on, though copper and allied industries are yet to recover from its impact.

According to an analysis by CARE Ratings, domestic refined copper production has fallen by 46.1% during the first nine months of financial year 2019. This has led to a domino effect of a sharp increase in the country’s imports and fall in the exports, thus turning India into a net importer of refined copper (India used to be the net exporter of refined copper). Exports have fallen by 87.4%, (during 9M-FY18 exports had increased by 25%) whereas imports have increased by 153.4% (during 9M-FY18 imports had increased by 3%).

Besides, it resulted in shortage of sulphuric and phosphoric acids, which is produced as a by-product and used as key raw material for manufacturing of fertilizers, thus adversely affecting the downstream chemical and fertilizer industry of South India.

Kavitha Dutt, chairperson, The Federation of Indian Chambers of Commerce and Industry (FICCI) Tamil Nadu state council, credited the government with handling the issue well but acknowledged that the fertilizer and detergent industry was forced to buy residue raw materials from Rajasthan now.

‘Smaller units hit’

Around 40-45 industries have been shut, especially in the chemical and logistics sectors, said N.P. Gopalakrishnan, managing director of Amruta Chemicals in Thoothukudi, which was badly hit. “Large companies may be able to import copper, but smaller units cannot do so,” he said.

The V.O. Chidambaranar Port Trust has also taken a hit. Sterlite Copper had contributed 2.6 million metric tonnes in traffic in 2017-18, which accounted for about 7% of the total traffic of the port at the time.

“The closure has definitely affected the industrial climate in the state,” said Rafeeque Ahmed, chairman of Farida Group, contending that environmental issues should have been “corrected through regulatory means and closing a plant based on perception is not acceptable.”

A senior official from an automobile major in Sriperumbudur said that closure of industry and the resultant job losses always had an impact on the industrial climate.

“More than the government, we are worried about the growing protests here (T.N.) for issues which can be sorted within boardrooms. That is not a healthy trend,” said the CFO of an IT firm.

Ramkumar Ramamoorthy, president, The Madras Chamber of Commerce and Industry, said, “While one incident may not damage the long-cherished reputation of Tamil Nadu as an investor-friendly State, what investors and industrialists look for is how the situation was handled and conclusions were drawn.”

However, officials associated with the Global Investors Meet pointed out that the government had signed 304 MoUs and agreements entailing investments to the tune of ₹3,00,431 crore in contrast to the promised investments of over ₹2.24 lakh crore with 98 MoUs in the GIM 2015.

(With inputs from Hariprasad A.R.)

Article source: https://www.thehindu.com/news/cities/chennai/industrial-climate-takes-a-hit/article27200961.ece

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