HomeSteel & CommoditiesFerro Alloys Assn. sends SOS to CM

Ferro Alloys Assn. sends SOS to CM

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Says Zooming Power tariffs severely hurting Sector

The Andhra Pradesh’s Ferro Alloy Producers’ Association has made an urgent appeal to the state government in immediately bringing down the zooming power costs which it says is severely dampening the operability of the industry.

As ferro alloys is a power Intensive and Power Price Sensitive Industry the cost of power component in Ferro alloys production is said to vary between 35-70% based on the Ferro alloy being produced.

Therefore, it states that even a marginal increase in power costs dramatically has a negative bearing on their cost of production.

The association recently called for a press conference in the city wherein it’s Chairman Mr R.K.Saraf highlighted the stress that the industry has been going through due to unviable power charges.

As per the association most of the countries where ferro alloy industries are situated are providing power at less than Rs.3/- per unit to make their functioning viable. Similarly, even in States like Chhattisgarh, West Bengal and Jharkhand it stated that power is provided at an affordable price to sustain the industries.

However, the association states that in Andhra Pradesh since April, 2022 there is steep increase in power cost on various accounts like Increase in electricity duty by 94 paise from 08.04.2022, Introduction of M D Charges of about 80 paise/unit (Rs.475/kVA/month) for this industry from 01.04.2023 (which was removed during 2002 after careful study by the Group of Ministers and the then technical personnel of APSEB, duly approved by APERC)

With this the tariff has gone up at 132 kV potential from Rs.5.01 Ps. to Rs.6.75 Paise per unit. In addition to this the association states that there are a slew of other charges which are also being levied.

‘With all the charges combined the unit rate will go up to Rs.7.35 per unit which is a whopping increase of 50% and this increases the cost of production of Ferro alloys like silico manganese & Ferro chrome by almost Rs.10,000/- per ton’ said the association.

The association has therefore requested the Government to remove the demand charges and make it a single part tariff as per prevailing practice since last two decades and restore the electricity duty to 6 Paise from the present levy of 100 paise.

This it says will enable the Ferro Alloy industry in A.P. to survive (hub of Ferro alloys) where there are 39 industries while 33 are operating with a contracted M D of more than 700 MVA where more than 40,000 people are directly or indirectly dependent on this industry.

The association also noted that Andhra Pradesh produces about 1.20 Lac tons of ferro alloys per month and earnings of Rs.1200 Crores per month on which GST revenue to both the governments together will be Rs.216 crores per month. It similarly estimates Foreign exchange earnings to be about Rs.600 crores per month.

‘If this request of producers is not considered by the Government, the industry cannot survive and have no option than to close the operations thereby rendering the employees & contract workmen all jobless’ said the association.

Ferro alloys are an integral part of the steel making process and thereby steel production is intertwined with its production.

 

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