ROURKELA: Induction furnace units in MSMEs across Sundargarh district have been bearing the brunt of high power tariff for the last nine years. Unable to meet ends, a few such units have shut shop and the remaining are struggling for survival.
What’s worse is that a few disenchanted local entrepreneurs have shifted base to Jharkhand and Chhattisgarh where power bills are comparatively cheaper. While the monthly power bill of an induction furnace is Rs 90 lakh in Odisha, it is Rs 55 lakh and Rs 70 lakh in Jharkhand and Chhattisgarh respectively.
Director of DD Iron & Steel Pvt Ltd, Rajgangpur, Pintu Jaiswal said induction furnace is a power-intensive unit which consumes pig iron, sponge iron and silico-manganese to produce ingots which are used by re-rolling mills to produce finished products, including iron rods. He said the situation continues to be grim for the industry in Odisha where per unit of power costs Rs 5.80.
Entrepreneurs in Jindal Industrial Park of Chhattisgarh and Damodar Valley Corporation in Jharkhand can avail power for Rs 4.30 and Rs 3.70 per unit respectively. There used to be around 65 induction furnace units in Odisha, majority of them in Sundargarh district, but since 2010, almost 40 units have been permanently closed and the rest are gasping for breath.
Rourkela Chamber of Commerce & Industry (RCCI) president Pravin Garg said the trade body has on several occasions urged the state government to help the beleaguered industrial units and enable them with a level playing field.
With energy price advantage, induction firm units in Chhattisgarh and Jharkhand are procuring essential raw materials from Odisha and sending ingots at a cheaper rate back here.
Industry sources said an induction furnace unit with 1,800-2,000 tonne monthly production capacity requires fixed investment of around Rs 5 crore and as much working capital to generate 70 direct jobs and more than 140 indirect ones.
Sundargarh District Induction Furnace Association leader and proprietor of Radha Krishna Ispat Pvt Ltd Binod Agarwal said silico-manganese is an essential raw material in iron and steel manufacturing.
However, all such units in Odisha have been closed owing to higher power cost. He said the local induction furnace units are forced to buy costly silico-manganese from Jharkhand and Chhattisgarh.
Industrial setback
Per unit of power costs Rs 5.80 in Odisha, higher than Chhattisgarh and Jharkhand.
40 of 65 induction furnace units in Sundargarh district have closed down since 2010.
The beleaguered units lack government support, level playing field.