Industry Staring at a Loss of Rs 10,000 Crore, Says Trade Body

Published: 11th December 2015 05:46 AM  |   Last Updated: 11th December 2015 05:46 AM   |  A+A-

CHENNAI: Industry Inc in Chennai has come under strain with several auto, manufacturing, IT services, textile and pharma firms temporarily halting operations in the flood-hit city.

Trade body Southern India Chamber of Commerce (SICCI) pegs the overall industrial loss at over `10,000 crore and counting.  The gravity of the losses could be worse with analysts anticipating a serious impact on not only the State but also the overall economy, as the industrial belt of Tamil Nadu contributes handsomely to almost all the sectors.

“With over 3 per cent share in India’s GDP, impact from such a natural calamity will have serious ramifications — both local and national level. We will write to the RBI, Central and state governments seeking exemptions,” said Dr Palani G Periasamy, President, SICCI.

Tamil Nadu stands fourth with over 14 per cent contribution to the overall auto sector production (including two and four wheelers and commercial vehicles). In passenger cars alone, the State’s contribution is over 27 per cent.”

SIAM Deputy Director General Sugato Sen told Express, “We are yet to determine the quantum of losses, but we do believe that temporary non-operation of units in TN will affect the overall auto production. Companies have started production, if not in full scale.”

Chennai is home to several auto makers including Ford, Hyundai, BMW, Renault, Nissan and Mitsubishi, whose collective production translates to 3 cars output every minute and one commercial vehicle every 75 seconds. The State also accounts for nearly 40 per cent of the country’s auto components, which has been badly hit. “Production has come to a standstill, though we are yet to assess the actual damage. It will certainly affect the sector’s output,” said Vinnie Mehta, Director General, Automotive Component Manufacturers Association (ACMA).

These small and mid-size auto ancillary companies are yet to restore operations both because of lack of power and absence of labour. “Some of the units continued to be inundated. Companies are witnessing poor workforce turnout as employees themselves are affected. Topping it all, power is not restored yet,” Palani explained. SICCI believes it will take nothing less than 1-2 months for companies to get back to their traditional production capacities.

The engineering manufacturers, though largely located in relatively-unaffected Coimbatore, too is witnessing a spillover affect. “The agriculture sector has been badly hit, which in turn will drag down the purchasing power of rural consumers. This, coupled with the slowdown in construction sector, engineering companies, making pumps and industrial machinery, will see sales falling down,” said V Lakshminarayanasamy, President, Southern India Engineering Manufacturers’ Association and Chairman, Suguna Motors, which itself is likely to witness a slump in turnover this fiscal. Engineering firms comprise about 50 per cent of the total MSME enterprises in the State both production and employment-wise. A slowdown could dent the state’s economy. 

TN is also the third largest software exporters in the country, and houses IT biggies like TCS, Infosys, Cognizant and HCL Technologies. The temporary shutdown last week due to incessant rains forced firms to relocate mission-critical projects to other cities.

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