Raw material supply from Gulf countries suspended
*Production in many units goes below 50%
Gopal Sharma
JAMMU, May 1: Over 350 petro-chemical based and many other units, connected with food processing and plastic products, mainly depend on raw material from Gulf countries and LPG, have been badly affected with the crisis in the Middle East after Iran-US/Israel war, as supplies have been suspended with the closure of Hormuz strait.
Official sources said that with the blockage in the Strait of Hormuz, the supply of raw material from several Gulf countries has been stalled and the unit holders depending on these countries, are trying to procure material from other sources. But due to suspension of supplies for the last several weeks, the production in the dozens of the Industrial units in the region have gone below even fifty percent.
Sources further revealed that majority of such units are in Bari Brahmana Industrial Complex in district Samba, Gangyal Industrial Estate, Samba SIDCO Industrial Complex and Kathua Industrial Estate. Many units are connected with the bitumen, petro-chemicals related products manufacturing, and have dependency on LPG supplies. Even some of the units, specially at Bari Brahmana, Samba and Kathua need full LPG tanker supply per day but are unable to get the same.
The Union Ministry of Industries and Commerce, taking cognizance of the emerging crisis has initiated a survey through its MSME Development and Facilitation office in Jammu to identify such units and prepare a detailed report on the quantity/percentage of reduction in the raw material, the source country/countries of the material besides losses being incurred by such units per day.
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Amit Tamaria, Head, MSME Development and Facilitation Office, Jammu, when contacted said that a survey has been initiated in the region with regard to any reduction in the production of goods and losses, if any, being suffered by the Industrial units, that depend on the raw material or other supplies from the Gulf countries after South-Asia crisis.
Tamaria said a standard format has been circulated through their Association offices at various places to seek these details and many have yet to respond. He refused to share further any detail but claimed that it was their internal exercise within the Department, and he will be forwarding the details from J&K to his Central office in Delhi shortly. He said some units are sending data directly to MSME office while others are forwarding through their Association offices.
Chairman of the Federation of Industries Jammu (FOIJ), Varindra Jain said that there are about 3000 Industrial units at Gangyal- Jammu; Bari Brahmana, Birpur Complex, SIDCO-Samba and Kathua Industrial Estate. With the crisis in the Middle East, after Iran- Israel/US war and the closure of Hormuz, over 350-400 units in J&K which are dependent on the raw material and other supplies from the Gulf countries are directly or indirectly affected.
Jain said about a dozen units connected with Bitumen are severely affected. Their production has almost stalled. Most of these units are dependent on the supplies from Iran, Iraq and other Gulf countries. This has further affected the supplies to the road construction agencies and the contractors. Many road works have reportedly been suspended with the shortage of bitumen, he added.
FOIJ Chairman said a large number of units hit with the Gulf war in J&K are Plastic based. They generally import plastic granules (Commonly known as Plastic Dana) from Gulf countries. The production of over 50-60 such units has gone even below fifty percent. Some of these units have been reached at the verge of closure. The unit owners are facing the burden of the workers, as they remain sitting idle without production work for hours. The cost of raw material has been increased to double or even three times after managing the same from different sources.
“Dozens of petrochemical based units whose number is also good in J&K, and others related to food processing industry are also badly hit in the J&K. Resins and paints based units are also worst suffeers. He said many industrial units are depend on LPG supply. Earlier, the Oil companies reduced the supplies to the 30% but after a lot of hue and cry by the Associations, the supply was improved to 50 percent. Even some of the units are unable to get their full quota of one LPG tanker per day. With the reduction in the production, the units are suffering huge losses and the industrialists are facing grave financial stress. As the import and export is badly hit with the ongoing crisis from the past about two months, a large number of industrialists in the region are fearing uncertainty, Jain maintained.
Bari Brahmana Industries Association, president, Lalit Mahajan said with the impact on the working MSME Sector of the J&K due to ongoing crisis in the West Asia, the Association has approached the Regional Director of the Reserve Bank of India, Jammu (J&K), to grant special financial support to the Industrial units as special relief with enhancement of 20 % working capital limit for one year within the existing collateral security of all the working banks in J&K. It has also been requested to waive off interest for term loan and working capital limit upto December 31, 2026, he added.
Mahajan, further said there has been a sharp decline in the market demand of finished goods within and outside the J&K UT. Moreover, there has been blockage of funds flow due to delay in the receipt of payments of finished goods. If the crisis remains unresolved, many units in the region will face closure, he added.
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