Small industries in TN mull relocating to Gujarat | SupportBiz


Small industries in TN mull relocating to Gujarat

Small industrial units in Tamil Nadu, troubled by the state's 3,500 MW electricity deficit, are mulling relocating to Gujarat, which provides a better ecosystem for smaller units to thrive, said a Tamil Nadu-based industrialist.

A week ago, industrialist D.Gandhikumar, who runs Gandhikumar Foundry in Coimbatore, met friends to discuss the prospects of moving his factory to Rajkot, a hub for foundry units in Gujarat.

In Tamil Nadu, rising production costs; and limited production at a majority of all small and tiny industrial units in that state -- operating at reduced capacities as low as 40 percent owing to power outages -- are forcing many units to consider relocation, said Gandhikumar, who is also the immediate past president of the Tamil Nadu Small and Tiny Industries Association (TANSTIA) and a vice president of the Federation of Indian Micro and Small & Medium Enterprises.  

Foundries; garment units; manufacturers of pumps and motors are all eyeing Gujarat, Gandhikumar said. “Our relocation plans are still on the drawing board. We are collecting data,” he said.

Gandhikumar’s industry needs returned scrap, pig iron, coke and reliable electricity supply to flourish and all this is available in Rajkot. “Rajkot already has some three to four coke manufacturing facilities. One could also use imported coke, brought in from Gujarat’s ports,” he said.

“We have to take a decision. We are closely watching developments in the state. If the under-construction power plants do generate electricity within a year, the state could have surplus power,” Gandhikumar said.

2500 MW of electricity could be generated from two power projects expected to be operational in 2013, according to news reports. Only 333.5 MW was added to the state’s generation capacity post March, 2006, according to a Frontline report.