The ferro alloys industry in Andhra Pradesh, which accounts
for 30 per cent of India's total production, will be shutting down operations
from April 1 if the State Government goes ahead with its proposal to hike by
nearly 80 per cent the power tariff for the industry, said a top representative
of the AP Ferro Alloys Producers Association.
Production of ferro alloys, a vital input for the steel
industry, involves high power requirement, with energy constituting between 40
to 70 per cent of the total cost of production. Power consumption is about 4,000 kwh (units
consumed over a period of one hour) for every tonne of ferro chrome and silico
manganese produced, while it is 9,000 kwh for ferro silicon.
There are about 30-odd ferro alloy units in the State,
producing about 2.5 lakh tonnes annually, a bulk of which is located in
Visakhapatnam and Vizianagaram districts.
Industry players feel that a 10 to 12 per cent hike in power
costs could have been absorbed, but anything more than this will render the
sector unviable.
According to Mr R.K. Saraf, Chairman and Managing director
of Facor Alloys Ltd and President of the AP Ferro Alloys Producers Association, “As we have to compete globally, we cannot pass on the power cost increase to
our consumers. And it is impossible for us to absorb the steep hike, leaving us
with no option but to close down the industry”.
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