INDORE: Towering coal prices amid dwindling supplies in country is affecting coal dependent industries of Madhya Pradesh battling a sharp jump in cost of operations, fast slipping inventories and left worried about losing international orders.
Textiles, paper mills, rolling mills and a few pharmaceutical units among others use coal to run boilers and thermal packs but the sharp jump in prices of imported coal has posed severe challenges to keep plants running. There are close to 700 boilers registered with the directorate of boilers in Madhya Pradesh. Of them, close to 70 per cent run on coal, as per the official statistics.
A Pithampur paper mill owner Virendra Patel said, “I have run out of coal stock and will have to wait until Thursday to get a truckload from Gujarat port to feed the boilers. I have 70 workers in my factory and this uncertainty is killing my business.” Patel said he requires around 30 tonnes coal per day. There are around 6 paper mills in Indore and surrounding areas and daily coal consumption is close to 100 tonnes by this sector.
Another paper mill owner B D Patel, who produces 100 tonnes kraft paper per day said, “I have shifted half of my daily coal requirement to alternate fuel as it has become impossible to run plants on coal looking at rising prices and inadequate supply in the market. Mostly Indonesian coal is used in our sector but now we are ready to get coal to keep operations going.”
Cost of Indonesian coal has jumped to Rs 14,000 -14,800 per tonnes as against Rs 8000 per tonnes a month ago, US coal has surged to Rs 22,000 per tonnes against Rs 12,000 per tonnes a month back, said industry players.
The textile industry of the state is left worried about losing international contracts and squeezing margins amid the ongoing coal crisis.
Madhya Pradesh Textile Mills Association chairman Akhilesh Rathi said, “The spurt in fuel cost has further dampened margins, which were already under pressure due to rising raw material and colour chemical costs. Coal shortage has left global brands sourcing out of Madhya Pradesh worried about likely production cuts and delayed shipment in case of unavailability of coal to run plants.
The sky rocketing coal prices will also impact cost of coal to power plants in turn rising power tariffs which are already on a higher side in MP, said Rathi.
There are over 25 large and 100 small and medium textile units in the state, mostly dependent on coal. Also the availability of agro fuel, an alternate fuel to run boilers, reduces every monsoon increasing the dependency on coal.
The steep hike has made end products across sectors expensive and a long run crisis is apprehended to bring severe power and production cuts, said industry players.
