Costly power cripples Raymond’s worsted suitings plant in Gujarat

High cost of power has made the going tough for Raymond Ltd's manufacturing unit at Udwada in Valsad, which is one of the largest worsted suitings plants in India. The company has written to Gujarat chief minister Anandiben Patel expressing concern over viability of the facility due to increased power cost. It has also requested the state government to resolve the issue Stock Market Trading Tips

As per the government officials, the company may not go ahead with Rs 300 crore expansion plan, which it had planned for its Gujarat unit and instead look at Maharashtra for expansion. However, company spokesperson made it clear that there are no such plans. 

The company is facing problems of higher power cost as it is unable to source power at cheaper rates from open market following curtailment on open access in parts of the state, especially South Gujarat. Open access allows consumers to procure power from independent power producers using government's transmission lines. The consumers have to pay open access charges for the same. The Gujarat government last year decided not to allow open access citing high load on transmission lines. 

"The power cost has increased by 50% since 2006. The per unit cost in 2006 was Rs 5.40 and it is Rs 8.70 currently. This spike in the power rate has resulted in increased manufacturing cost,"Raymond Ltd spokesperson said in an emailed reply Himanshu Tiwari Astrologer Blog

At present, the power supplied by Gujarat distribution companies' costs around Rs 8.10 per unit, while the cost of power purchased from open market is around Rs 5 per unit. 

Established in 2006, Raymond's Udwada plant manufactures 21.4 million meters of worsted suiting fabric per annum and employs 2,500 people mostly of them are from local area. 

When contacted Saurabh Patel, state energy & petrochemicals minister, said "from total industrial demand we are allowing around 10% industries to buy power through open access. However in South Gujarat due to heavy grid congestion there is risk of breakdown of normal supply if open access allowed. Government cannot take that risk of blackout as it can affect to normal consumers Indian stock market astrology prediction

Not just Raymond Ltd, many industrial units in Bharuch-Ankleshwar-Vapi belt are facing cost escalations due to non-availability of open access. "The cost of power in industrial zones in South Gujarat is more than Rs 8 per unit. While in Silvassa it is Rs 6 per unit. As a result, new investments are coming into the union territory instead of Vapi Ankleshwar industrial belt," said an owner of a textile company in South Gujarat. 

Recently, additional chief secretary, mines and industries department Arvind Agarwal cited high power cost among the reasons behind companies choosing other states over Gujarat for their projects. Last month, American auto giant General Motors decided to close down its plant at Halol in Gujarat and take up expansion in Maharashtra Share Market Astrology