THE KOVAI HERALD
Sudden increase in Electricity Charges is hurdle to TN foundries who are already are facing stiff competition from domestic and foreign foundries says,”The Institute Of Indian Foundrymen (IIF). It has also requested the government to ensure Power Cost at reasonable rates, Continuous power with good quality is must for Foundries to stay viable.The Institute Of Indian Foundrymen (IIF), Southern Region, Chairman, S.MuthuKumar said,”IIF is a National Level Association representing Indian Foundries across the Country with about 4,000 members. IIF plays a vital role in facilitating interventions required for the benefit of Foundry Industry and the users of Metal Castings. We are from IIF Coimbatore Chapter and Chennai Chapter representing about 1,000 foundry units in this region.Manufacturing Value Chain in India depends to a large extent of the performance of Foundry Industry. Foundry Industry is one of the core sectors contributing both directly and indirectly to around 50% of Manufacturing GDP. Manufacturing Sectors like Automotive, Mining and Construction Equipment, Oil and Gas, Energy, Medical, Food and Agriculture rely lot on Foundry Industry for their product Manufacturing. Foundry Industry is therefore rightly called as Mother of all Industries. Around 95% of Foundries in India are in the MSME segment contributing significantly to the 17.5 billion Dollar industry, with export revenues around 4 billion Dollars. Given the reliance on Manpower, Foundries also generate distributed wealth and employment across the Country.The petitions filed by TANGEDO, TANTRANSCO, SLDC and ’s Tariff Petition is an initiative in the right direction for benefit of both the Industry and the DISCOM. However, certain norms and expectations laid down in the tariff petition needs consideration for downward revision as the cost increase across the society will be by large unbearable all of a sudden.
Lost Opportunities & Competition for Tamil Nadu Foundries:
During the R&C period between 2008 & 2015, the casting buyers in India and abroad who were buying mostly from TN, changed their buying choice to other states in India. As more orders flowed in other states, expansion and new foundries got developed since 2008 onwards grabbing the opportunity. The technical manpower in TN moved also moved to other states due to opportunities. The TN foundries particularly Coimbatore foundries lost their opportunity to sustain and grow and became almost stagnant. The foundries in other states who were small, developed in to huge and adopted cluster approach and have become a huge competitor domestically and in export markets. The state governments of other states incentivised the foundry industry and thereby existing and new foundries emerged/ expanded. Large numbers and large-scale foundries emerged in other states such as Karnataka, Maharashtra, Gujarat, Rajasthan, Uttar Pradesh, Uttarakhand, Haryana, Jharkhand, Chhattisgarh, Madhya Pradesh, West Bengal and Orissa.
Need for Continuous Power Supply with Good Power Quality:
A continuous power supply with good power quality is need for our industry as our industry is entirely dependent on Thermal Energy (Heating, Cooling and Constant Temperature requirements).
When power interruption occurs, the thermal requirements such as heating, cooling and constant temperature achieved using electrical energy, tends to go to ambient temperature and becomes a total waste. This not only increases cost of production, also causes deterioration of product, process quality and loss of time. Due to power interruptions, we are not able to make timely supplies to our customers, hence end up paying liquidated damages as well our orders are shifted to other states where power supply is good. Hence, it is important foundry industry receives continuous power with good power quality.
It is humbly requested to allow for minimum billing demand of 85% of contracted load (or) actual recorded demand whichever is higher.
Peak Hour Tariff:
We request to maintain existing peak hour tariff of 20% and timing of 6 hrs in two slots 06:00 to 9:00 and 18:00 to 22:00. Our industry being labour intensive and already our shifts are set and running for many years, it is difficult for our employees and their families to change shift timing to odd timings. Family life will get affected for the employees if shift timings are changed to accommodate change in peak hours leading to disruption of normal life and may lead to lesser preference to work in foundries in already manpower scarce industry.
Night Hours Rebate:
The night hour rebate should be allowed as 20% on Energy Charges which will encourage more users to use power during night hours. This will also help foundries to run more in night hours by offering incentives to employees.
Tariff Increase after control period:
The tariff for future years shall be decided based on True Up Petition filed by the DISCOM.
High Tension Tariff I:
For FY 2022-23, Demand Charges should be fixed at Rs 400/ kVA and Energy Charges at Rs 6.50 per unit.Sudden increase in Electricity Charges is hurdle to TN foundries who are already are facing stiff competition from domestic and foreign foundries. Sudden increase in Electricity Charges is hurdle to TN foundries who are already are facing stiff competition from domestic and foreign foundries. Entire raw materials and input materials are sourced from other states where suppliers have their factories for various positive reasons. Due to transportation cost, the cost of materials to TN foundries is already high. Hence, power cost at reasonable rates is must for foundries to stay viable. Due to the pandemic 2020-2022, a shift of orders from China is happening to India, Turkey, East European and South American foundries. The export orders are the only opportunity available to TN foundries to sustain and grow as most of domestic orders have been grabbed by other state foundries. It is of utmost importance to stay competitive to attract business. A reasonable power cost will help and sustenance, and nurture growth of foundry industry in our state. For FY 2023-24, FY 2024-25, The tariff for future years shall be decided based on True Up Petition filed by the DISCOM.
8.2 Tariff for Low Tension Supply Consumers
Peak Hour Tariff & Timing:
Many of the foundries and machine shops operating are in Micro and Small sectors are under LT Category. Hence, LT, LTCT and LT 112-150 KW consumers may be spared from peak hour timing and additional tariff as it will have a cascading cost effect in the society as well as trigger manpower scarcity in these industries. There is no practice of operating at night hours (22:00 to 06:00 hrs) as it not practical for the employer and employee and is not a welcome measure. These MSME units also employ women, who in turn may not work in odd shift timing due to their family requirements. Hence, it is humbly requested to drop the Peak Hour system and timing for LT, LTCT and LT 112-150 KW consumers.
Low Tension Tariff III-B:
For FY 2022-23, Fixed Charges should be fixed at Rs 50/ KW and Energy Charges at Rs 6.50 per unit.
Most of the foundries in MSME sector using LT are operating 12 to 16 hours shift timing starting at 6:00 AM. Early in the morning, owner himself or couple of employees start the industry and as the day progresses, more employees join for doing the production. In other words, preparatory work is done early in the morning such as switching on of furnace and gradual heating. The MSME industry is adaptive to the normal working hours of the society and the energy consumed by them will be useful to evacuate solar energy during the solar hours of 10:00 to 16:00.Sudden increase in Electricity Charges is hurdle who are already are facing stiff competition. Entire raw materials and input materials are sourced from other states where suppliers have their factories for various positive reasons. Due to transportation cost, the cost of materials is already high. Hence, power cost at reasonable rates is must to stay viable. A variable slab system such as 0-50 KW, 50-100 KW and above 100 KW will make chaos and a non-level playing field for the MSME sector. This may trigger unrest and negative influence in the society.” He said.