A group of Punjab-based exporters, who planned to expand in Gujarat with an investment of Rs 500 crore, has delayed their proposed capital expenditure projects by six to nine months in view of economic slowdown.
“We have put on hold our proposed expansion projects coming up in Gujarat for 6 to 9 months because of credit crunch,” Engineering Export Promotion Council Regional chairman S C Ralhan said.
Observing that the meltdown has hit the light engineering business in Punjab, he said exporters now do not want to spend money on new projects. “Rather we plan to use money on working capital in order to run and sustain our business in these adverse conditions,” Ralhan said, who has played a key role in initiating the projects in Gujarat.
Hoping that the economic situation would improve in 2010, he said exporters would look forward to start their projects in Gujarat in later part of 2009.
Due to poor infrastructure and continuous power shortage in the state, a group comprising 23 exporters, last year, had announced to divert their expansion projects worth Rs 500 crore to Gujarat in view of better infrastructure and availability of surplus power.
Primarily from Jalandhar and Ludhiana districts, these exporters had planned to set up new manufacturing facilities in the business hand tools, bicycle parts, fastener, forging, induction furnace and rolling mills.
With shifting of new projects in Gujarat, the exporters, who are facing locational disadvantage situation for being far away from seaports, were expecting 8-9 per cent improvement in their margins.