Adani Group shuts down two cement plants in HP; workers left in lurch
The group –which had acquired ACC Cement Plant at Gagal in Bilaspur district and Ambuja Cement Plant, Darlaghat, in Solan district in September – has blamed high freight rates for its decision
The Adani Group on Thursday said it had decided to indefinitely suspend operations at two cement plants in the hill state as it was incurring losses due to steep transportation costs.
The group –which had acquired ACC Cement Plant at Gagal in Bilaspur district and Ambuja Cement Plant, Darlaghat, in Solan district in September – has blamed high freight rates for its decision. However, many see it as a retaliatory move against the newly elected Congress government, which was looking to reduce cement rates in the state, which has been a hot button issue in the state.
The company had been negotiating with transport unions to bring down the costs. In a letter to transport unions, officials running the Ambuja Cement plant in Darlaghat had written: “As you are aware, our plants are under severe pressure to reduce the cost of operations to sustain itself in the market. In the current market scenario, due to the high transportation cost we are finding it difficult to compete in the market, and if this continues our plants will become unviable.”
The officials wrote: “due to your adamant attitude we are being compelled to pay exorbitant freight, which is higher than the prevailing market rates.”
The company, in a letter to the Solan deputy commissioner, also drew attention to a report, ‘Fixation of freight rates of goods carriage in Himachal Pradesh’ prepared by a permanent committee – comprising transport, industries, food and civil supplies and finance secretaries with the director transport as member secretary – which recommended a freight rate of ₹6 PTPK (per tonne per km).
Saying that the rate had been suggested after considering all parameters, the company officials had said they would be forced to engage other transporters or stop operations at the cement plants if the prevailing freight rate was not reduced.
At present, the transportation rate for per quintal of cement is ₹10.58 per kilometre in hilly areas and ₹5.38 in the plains. Solan District Truck Operators, Darlaghat, president Jai Deva Kaundal said, “Companies are asking us to reduce the rates to ₹6 per kilometre per quintal in the hills. What will truck owners earn if they agree to these rates as fuel consumption is higher in the hills?”
Chief secretary RD Dhiman said, “The matter is solely between the management of the company and transport unions. I have asked the deputy commissioners of Bilaspur and Solan to intervene. Shutting down plants without prior notice is unlawful.” Despite repeated efforts, company officials did not respond to calls or messages.
Unemployment crisis on the horizon
Around 25,000 families are directly and indirectly dependent on the cement plant for earning their livelihood. The company has 530 regular employees and 450 contractual employees. Around 3,800 truck operators work at the cement factory in Barmana, of which 2,300 drivers are affiliated with the Bilaspur District Truck Operator Transport Co-operative Society and 1,500 with the ex-servicemen association. Similarly, around 2,000 truckers work for the cement factory in Darlaghat.
All of them will lose their livelihood once the plants shut down. Besides, 600 mechanics and tyre puncture repair shops between Bilaspur to Swaraghat and small eateries (dhabas) in the belt depend on the truckers.
Cement shortage likely
Closure of the plants may also lead to shortage of cement. The Ambuja Cement plant at Darlaghat produces 2 million tonnes per annum and around 5-6 metric tonnes are produced daily. The Barmana plant also produces 3,000 metric tonnes of cement per day. Apart from Himachal, the cement produced by the two plants is supplied to Gujarat, Bengal, Maharashtra, and Chhattisgarh. Cement from the Barmana ACC plant, which has the capacity to produce 15,000 metric tonnes of cement and clinker, is supplied across Himachal Pradesh, Punjab and Haryana through trucks.
CPI (M) demands criminal case against Adani Group
Slamming the Adani Group for suddenly shutting operations at the Ambuja and ACC cement plants, the Himachal Pradesh state committee of the Communist Party of India urged the government to file a criminal case against the group.
CPI (M) state secretary Onkar Shad said, “The people gave their valuable land for setting up the ACC cement plants at Barmana and Ambuja Cement, Darlaghat. However, the Adani Group, which recently took over the two plants, has shut down the operations without a just reason, leaving the thousands of workers and truck operators in a lurch.
He alleged that the cement companies in Himachal Pradesh had earned huge profits by arbitrarily raising the cement prices over the past two years. “The cement which is produced in Himachal is sold at higher price in the state compared to the other states, which is injustice with people of the state,” the leader said, alleging that the company was also trying to pressure truck operators to reduce the freight charges by shutting down the plants.