Ancillary units in a fix as output dips to 40%

Written by feBureau | Jamshedpur | Updated: Apr 4 2013, 06:46am hrs
With the Tata Motors M&HCV plant here having seen a number of book closure days in the 2013 fiscal, the 1,000-odd medium and small ancillary units located in and around the Adityapur industrial area find themselves in a worrisome situation with turnover at the units having plummeted to around 40% of their 2011-12 daily production figures.

Speaking to FE on Wednesday, RK Sinha, president, Adityapur Small Industries Association (ASIA), a forum of around 1,000-odd medium and small ancillary units supplying aggregates and parts to Tata Motors, said the commercial vehicles (CV) segment continued to be in a recession as ancillary units were currently working only at 40% of their regular production capacity in normal times.

The industrial area, he said, which till a little more than a year ago used to see a workforce of around 45,000 was now witnessing a job loss of around 10,000 people. Those having been asked to leave till now being mostly temporary hands.

The situation is pretty grim. Our turnover for 2012-13 compared with 2011-12 has come down to around 40-42%, said Auto Profiles CMD Bikash Mukherjee.

Auto Profiles, which supplies all kinds of sheet metal parts to Tata Motors M&HCV units, had seen a turnover of over R300 crore by way of its Jamshedpur operations alone in 2011-12.

Going by its 2011-12 turnover as also in the new R35-crore investment it had made last September in a unique 4,500-tonne press line here, Auto Profiles, which had been expecting a turnover of around R500 crore in 2012-13, would now have to be satisfied with an output of only around R160 crore for the year.

Mukherjee feels the current situation was likely to continue till November this year unless moves made by the government translated actually into infrastructure projects taking place at a faster pace.