Kutch steel plants facing the heat of market slowdown | business | Hindustan Times
Today in New Delhi, India
Jul 22, 2017-Saturday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Kutch steel plants facing the heat of market slowdown

Slowdown in the manufacturing sector has adversely impacted the steel plants in Kutch, more than 20 steel plants have either been shut fully or partially, people associated with the industry said.

business Updated: Nov 15, 2008 13:03 IST

Slowdown in the manufacturing sector has adversely impacted the steel plants in Kutch, as in last two months, more than 20 steel plants have either been shut fully or partially, people associated with the industry said on Saturday.

"Around 22 plants have either been shut down fully or have cut down production up to 60 per cent owing to recession in the market," Shekhar Aiyachi, owner of Nilkant Concast Pvt Ltd told PTI.

He said on an average, each unit has manufacturing capacity of around 1 to 1.5 lakh tonne per annum while in terms of employment, each unit employs more than 500 people on an average.

Talking about the main factors, he said that raw material has become expensive and costs of operating plants have also gone up due to high inflation.

"However, the main factor is fall in steel prices and demand. A few months back, we used to sell steel at Rs 47000 per tonne which has now got reduced to around Rs 35000 tonne," he said.

According to Kailash Gadhvi, a Chartered Account and consultant of many steel plants in Kutch, demand of steel in the local market has come down because of slowdown in the construction sector while export also does not look promising.

"The plants which have come up in Kutch were set up during the tax holiday period in the post-earth quake time. Now incentives have gone, making it difficult for the industry survive in such a time of recession," Gadhvi added, explaining the industrial scenario in the area.