VIZIANAGARAM:In yet another jolt for the State Government, Jindal Group has announced lockout of its Jindal Ferro Alloys Limited unit at Kothavalasa in Vizianagaram district. Over the past few months, the ferro alloys units are shutting down one after the other due to increasing losses.
Nearly 1,000 families who earn a livelihood through direct and indirect employment from the Jindal Ferro Alloys factory, are now at the crossroads. About 150 regular employees and another 400 contract workers are employed with the company, besides another 500 people earning indirect employment. Inaugurated by none other than former Chief Minister NT Ramarao in 1989, the company declared a lockout for the third time due to losses.
Vizianagaram is home to about 38 small, medium and large units of ferro alloys producing ferro chrome, ferro silicon and silicon manganese with a total production capacity of eight lakh tonnes per annum. They supply products to steel manufacturers both in India and abroad. But only eight of them were fully functional, while 12 are operating at 50 per cent of their capacity. However, a steep hike in power tariff over the past few years has forced many companies to declare lockout. Power is the most essential source for the ferro alloy units which spend about 35 to 60 per cent of their production cost on power.
“A hike in the power tariff besides fuel surcharge adjustment and deemed consumption charges, pushed many of us into losses. Further, there is also a price fall in the market for ferro alloy products,” said a company manager working at a unit in Bobbili.
Sources said that the with a daily production capacity of about 10 tonnes, Jindal Ferro Alloys Ltd alone had been incurring losses of about `1 lakh per day. Though a small unit compared to others like Ferro Alloys Corporation Ltd, the unit was running due to the support of the Jindal Group.
“The management has sought power subsidy from the government but there was no response. Left with no option due to the losses, they have decided to shut it down,” said a senior employee at the factory.