Increase in power cess upsets pipe producers

Plastic pipe manufacturers in Madhya Pradesh, primarily in the Pithampur area, are facing a tough time after the Madhya Pradesh Electricity Regulatory Commission's approval for raising fixed charges on power consumption.

Plastic pipe manufactures made a representation in Indore requesting the government to freeze the charges levied by the Madhya Pradesh State Electricity Board (MPSEB).

"The power tariff has been raised by 77 per cent and, this has doubled the cost of operations of our units," a plastic pipe manufacturer of the Pithampur industrial area said.

The 20-year-old industry has six big and 40 small scale plastic pipe manufacturers in Pithampur, Dewas and Indore industrial areas and employs around 2,000 persons.

The combined production capacity of these units is 10,000 tonnes per month, excluding small scale industrial (SSI) units. While SSI units produce 20 tonnes plastic per month, they consume 150Kv of power in the first six months and 50 Kv in the rest of the year. Thus, manufacturing of the plastic pipes, used in domestic sanitary fittings and irrigation purposes, is a seasonal activity.

"MPSEB has raised the tariff from Rs 150 per Kv to Rs 397 per Kv. An SSI unit consumes 40-50 Hp of power and pays Rs 1 lakh as minimum charge," said the source.

According to SL Goel, owner of Malwa Plastics, Indore, the production cost has gone up from Rs 2 per kg to Rs 4 per kg with this increase in the power tariff. We have made a representation through the Pithampur Audyogik Sangathan to cut the tariff."

Gautam Kothari of the Pithampur Audyogik Sangathan confirmed the report and said they have asked the government to cut the tariff. Plastic pipe manufacturers also export their products to neighbouring states of Maharashtra, Rajasthan and Gujarat, and to Dubai as well.

The increase in the price of plastic resin and granules, a key ingredient, has further added to the problem.

"The prices of resin is now around Rs 65-Rs 66 per kg. Reliance, IPCL, Phenolex and GAIL are the main supplier of resin and plastic granules," he said.