More power woes

Hyderabad April 30: 

The Rs 1,500-crore ferro alloy industry in Andhra Pradesh, which accounts for 30 per cent of the country's total production, has slashed production by almost 40 per cent, impacting steel makers in this region.

This comes in the wake of a hike in power tariff by the State Government and prolonged power cuts in the last few days.

The AP Electricity Regulatory Commission has effected a nearly 50 per cent hike in tariff, increasing it from Rs 2.65 a unit to Rs. 3.65 for the ferro alloys sector with effect from April 1.

The ferro alloy producers will be meeting in Hyderabad on May 9 to decide on whether to appeal before the appellate authority of the commission. In the meantime, the production cut will continue, industry sources said.

There are 30-odd companies in the State producing 2.5 lakh tonnes of ferro alloys, a bulk of which are located in Visakhapatnam and Vizianagaram districts.

The 50 per cent hike in power tariff has increased production cost by Rs 4,000 a tonne for ferro chrome and ferro manganese and Rs 9,000 for ferro silicon.

Production of ferro alloys, a vital input for the steel industry, is power-intensive, with energy constituting between 40 per cent and 70 per cent of the production cost. Power consumption is about 4,000 kwh per tonne for ferro chrome and silico manganese and 9,000 kwh for ferro silicon.

"We could have taken a 20-25 per cent hike, but this increase makes the industry unviable, as we have to compete with suppliers from other States that enjoy cheaper power," Mr R.K. Saraf, CMD of Facor Alloys Ltd, and President of AP Ferro Alloys Producers Association, told Business Line.

This development could discourage the proposed investments of Rs 5,000 crore by this sector in Andhra Pradesh, involving a new capacity of 2.5 lakh tonnes.

Production cost is also high as 95 per cent of their raw materials has to be sourced from outside the State. "For one tonne of ferro chrome, we need 2.5 tonnes of chrome ore. Transportation cost of the raw material alone is Rs 5,000 a tonne," Mr Saraf pointed out.

Impact of Power Cuts

Hindu Business Line Hyderabad, May 6: 

Restile Ceramics Ltd, a manufacturer of ceramic tiles, has announced closure of its factory due to inadequate power supply.

In a statement to the stock exchanges, the company mentioned that it was forced to take this extreme step due to erratic and inadequate supply of power.

While the company has made representations for better power supply, there has been no exemption from power cuts.

In the BSE statement , Restile said: "Central Power Distribution Company of A.P. Ltd has imposed compulsory power holiday for two to three days in a week. This is in addition to three hours of power cut on daily basis for the rest of the week days."

The company representations to the Distribution Company to exempt it from compulsory power holiday citing the ceramics industry's need for continuous power, have not been successful.

Due to the precarious power supply situation, the distribution company was not in a position to exempt the company from power cuts.

Under the circumstances, the company management stated that it had no other option but to declare a layoff with effect from April 12.

Consequent to this layoff, the company stated that the workers were not allowing dispatches of existing stocks available in the company. Due to these developments, the company has temporarily declared lock out with effect from April 23.

The plant, with a capacity of 12,000 tonnes a year, is located in Medak district .

vrishi@thehindu.co.in