SMEs at Mancheswar, Rasulgarh stand to lose Rs40 cr

Bhubaneswar: Two industrial areas in Bhubaneswar that suffered tangible and intangible losses when Cyclone Fani struck May 3 are the Rasulgarh and Mancheswar Industrial Estates. The cyclone paralysed industrial activity in both localities for several days and pushed units into financial distress.

Although the exact quantum of damage is yet to be ascertained, entrepreneurs estimate units in these two areas alone have suffered damages to the tune of Rs 40 crore.

Industries department figures show that the two industrial estates have more than 200 operational SMEs. Many suffered losses to plant and machinery, while others to raw materials. Pradeep Kumar Dash is the person in charge of Surya Machinery, a unit in Rasulgarh industrial estate. 'Fani affected us big. Our machinery has suffered damage. Seven wielding machines have, each costing roughly Rs20,000 in the market, have been damaged. We also had to run our 

operations on diesel-powered generators which cost us Rs15,000 more for all the days we operated without power.'

Surya Machinery, a 25-year old industry, had never failed on its delivery schedules. But it had to cancel orders following Fani. 'Many of our clients cancelled orders totaling Rs 5 lakh,' Dash said.

For Shree Ram Aluminum Industry, the first unit to be set up at Rasulgarh Industrial Estate, Fani brought unexpected damage. Company director Shalin Agarwal says the unit suffered losses to the tune of Rs 40 lakh. 'Some of our costly equipment was damaged. Besides, about Rs80 lakh in orders got cancelled as we couldn't meet deadline,' Agarwal said. The unit was carrying out restoration and had completed about 30 per cent of the work at the time OP spoke with Agarwal.

Blue Circle Instruments, which manufactures LED bulbs, streetlights and panel lights, fears losses to the tune of Rs1 crore. Manager Ganesh Prasad Sahu said the unit's losses could amount between Rs48 lakh and Rs 1 crore. According to him, raw material for manufacture of the products was damaged by Fani and the unit had to be shut down for 10 days following the cyclone. The weekly output targets of the company were disrupted and it had to miss delivery deadlines.

Product and equipment damage to the tune of Rs 1 lakh and loss of business amounting to between Rs 4 lakh and Rs 5 lakh stares Sanjeev Das, the managing partner of the printing company Universal Line, in the face. Das is unsure about how to make up for the losses.

Units at Mancheswar Industrial Estate have similar tales of woe. Lalita Spices lost 200 kgs of tea when the cyclone hit the area. Gopan Choudhury, an official representing the unit, said: 'Tea is our key product. It was damaged by rain that came with Fani. We lost tea dust costing over Rs 1 lakh. Much of it was blown away by the winds.' Cancelled orders amounted to about Rs 5 lakh and the mangled signage requires replacement.

Many entrepreneurs at Mancheswar pointed out that the signage industry itself may have suffered damages to the tune of Rs 30 crore in Bhubaneswar, Cuttack, Khurda and Puri.

The creative head of Suntony Signage Private Limited at Mancheswar Industrial Estate, Pradipta Kumar Nath, said his company suffered loss of Rs 2 crore in damage. We were unable to complete some big projects. Many under-construction projects were destroyed. Our clients did not pay for unfinished projects.

'Now we are planning to create signages that can withstand wind speeds of up to 230 kmph. Our present signage was equipped to handle winds of only about 200 kmph. We believed these would survive Fani, but wind from multiple directions at high speed twisted and broke our signages,' he said.

Automobile dealers at the industrial estate fear they will not be able to meet sales targets for May. Utkal Automobiles Private Limited, authorized dealers of Mahindra, said they had targeted selling 350 vehicles in May but were unlikely to achieve the target.

BDM (Sales) Debi Prasad Mishra said: 'The damage to our showrooms itself could cost us Rs 3 crore to reverse. Our key customers are from Cuttack, Khurda, Bhubaneswar and Puri, the cyclone has blocked our business. Now we are afraid sales for May, may not cross 100 units. That would mean loss of business between Rs 20 lakh and Rs 30 lakh.'

Based on demands placed by different associations for SMEs, the state government had directed insurers to settle claims at the earliest. But many entrepreneurs say their claims are yet to be settled.

Shalin Agarwal of Shree Ram Aluminum Industry said insurers had not given any positive response to their claims. 'Insurers visited us and prepared a report but we are yet to receive any settlement. We expect some soft loans from financial institutions to restore damages. We were not supported adequately in 1999 after the super cyclone, we hope that will not be the case this time,' Shalin said. He urged the state government to exempt affected industries from the GST for the time being.

While some other entrepreneurs are still awaiting the insurance companies to survey their units to settle claims, there are also units where the equipment or machinery is not insured. Rabi Narayan is one such entrepreneur. 'We pay high taxes here and if we go for insurance, it will cost us lots of money,' he says. He is unsure about ways to make up for his losses

But even among the tale of losses, some industries have managed to survive Fani, partly owing to luck and partly to due diligence.

Jay Kar Techno Private Limited, an authorised dealer of Cummins Company, survived without major damage owing to pre-cyclone precautions. Director Jaspinder Singh Chahal said: 'Two days prior to the cyclone, we had shifted all major equipment and machines to a safe place. Precautions are necessary to avoid damages.'

Kalinga Automobiles Private Limited, dealer of JCB backhoe loaders, said it suffered minimal damages as the industry was surrounded by big buildings. 'We were saved by the buildings all around. Also, as backhoe loaders are heavy the cyclone could not actually blow them away,' he said but added that the company's customers in Puri had faced severe damages. 'Many of our customers asked us to provide them quotations so that they can make insurance claims. We have already provided insurance related documents to 10 customers,' he said.

Although the industries department had formed a team to survey the damage suffered by industries in Rasulgarh and Mancheswar, among other places, entrepreneurs of these industrial estates say no team has visited them.

The Odisha Assembly of Small and Medium Enterprises (OASME), and Utkal Chamber of Commerce and Industry (UCCI) had recently claimed that more than 50,000 small and medium enterprises from Cuttack, Khurda, Puri and Jagatsinghpur were affected adversely by Fani. The body also said these industries faced losses to the tune of Rs 4,000 crore.

The president of UCCI Ramesh Mohapatra claimed that about 50,000 MSMEs were affected by Fani and losses to production and property were an estimated Rs 4,000 crore.

The associations also sought the state and central government to help industries recover from losses. The UCCI has also requested the state government to cut interest rates on loans, relaxation on GST and partial waiver of loans and grant of subsidy to revive MSMEs hit by Fani.

It wrote to chief minister Naveen Patnaik seeking waiver on demand charges on electricity bill for at least a month and electricity duty exemption for at least three months. Besides, the apex chamber has sought grant of rehabilitation subsidy for MSME units.

In the letter, it was also requested to recast loans, waive interest for at least three months. The association urged to provide required funds to MSME units for restoration.