ROURKELA: With improvement in market scenario, sponge iron plants and rolling mills in Sundargarh district are doing well after prolonged recession, but the power-intensive Induction Furnaces (IFs) continue to be in pathetic condition due to high power tariff in Odisha.
The sponge iron, IFs and rolling mills are inter-dependent industries in the secondary iron and steel segment and majority of these industries in the district fall in the MSME category. Sources said these three categories of industries are also labour intensive and they employ almost 10-15 times more labour than mega integrated steel plants. The sponge irons are consumed by IFs as raw-material to produce ingots and billets for rolling mills which produce finished long products including TMT bar, rod, steel angle, beam, channel and other products.
Industrialist and former president of Odisha Sponge Iron Manufacturers’ Association (OSIMA) Gouri Shankar Agarwal said over the past one year, the condition of sponge iron plants in Sundargarh has improved with its price rising to about `20,000 per tonne, while prices of branded and non-branded secondary steel products of rolling mills have increased to `50,000-`55,000 per tonne. He, however, said about 20 remaining IFs in the district are struggling for survival and running with 60-70 per cent of rated capacity due to high power tariff.
Agarwal said with uniform tax regime in the GST era, existence of the IFs in Sundargarh is threatened by their counterparts in Chhattisgarh and Jharkhand, who enjoy benefits of low power cost. Till a few years ago, Sundargarh was a leading manufacturer of ingots and billets, but with about 35 IFs failing to survive, further deterioration of IFs may hit the existence of sponge iron plants and rolling mills in the district, he added.
Several delegations of Rourkela Chamber of Commerce & Industry (RCCI) have met Chief Minister Naveen Patnaik and Chief Secretary A P Padhi over the issue and have also appealed to the Odisha Electricity Regulatory Commission (OERC) to lower price tariff. They hoped that power tariff may be favourably reduced from April in view of the difficulties of the IFs.
RCCI president K K Poddar said secondary steel manufacturers in Chhattisgarh and Jharkhand are sourcing iron ores from Odisha and flooding back finished steel products at cheaper rates to the markets of western Odisha, Keonjhar and neighbouring areas.
Industry sources claimed that over the past five years, 40 to 45 IFs, 20 rolling mills and 30 Ferro Alloy plants, majority from Sundargarh, had closed, while three units last year shifted to Chhattisgarh.