Manufacturing Units in Mumbai face Closure
Business Today reported that while COVID-19 is spreading fast and industrial oxygen is being diverted to save lives, thousands of engineering units and
Business Today reported that while COVID-19 is spreading fast and industrial oxygen is being diverted to save lives, thousands of engineering units and ancillary suppliers to various industries across the country are facing closure threat due to shortage of industrial oxygen and raw materials. Thane-Belapur-Bhiwandi belt has over 1,200 small and medium engineering units, mainly making industrial vessels, boilers, drums etc. In the past couple of weeks, half of the engineering units were operational, and now many have closed down due to lack of raw materials like steel and pipes and industrial gas for cutting and welding
Chamber of Small Industry Association Bhiwandi General Secretary Mr Ninad Jaywant said that out of 3,000 plus MSMEs in the Thane, Belapur and Bhiwandi belts, the most affected are engineering companies, textile and leather units. Specialized cutting and lathe jobs like arc welding require industrial gas, which is now being diverted as medical oxygen for hospitals. Besides, the main steel and engineering sourcing market in Masjid Bandar in Mumbai and other hardware shops in most industrial belts are closed.
Pokhran Lake Small Scale Industries Association in Thane Chairman Mr Salam Ali Dabir said "Most of our units are into fabrication and that requires industrial oxygen for operations. More than that, we are not able to source raw materials as shops in the main steel markets in Mumbai are not allowed to open. With more restrictions coming in for travel by train or bus from today night, we fear workers will not be able to come.”
Rating agency CRISIL estimates that the central government's decision to ban use of industrial oxygen from April 22, except for nine sectors, will impact companies in multiple sectors. CRISIL Ratings Director Gautam Shahi said “The disruption in the supply of oxygen for industrial use would temporarily impact the revenues of small and mid-sized companies into metal fabrication, automotive components, shipbreaking, paper, and engineering. These typically do not have captive oxygen plants and source their requirement through merchant suppliers for operations such as welding, cutting, cleaning and chemical processes.”