Steel prices rise, MSMEs in a fix

TIRUCHY: Just as Tiruchy's Micro, Small and Medium Enterprises (MSME) saw its business recuperating from the losses due to the pandemic, the soaring prices of raw materials, especially steel, has proved to be yet another setback for the already struggling units.

Steel prices that have gone up by almost 30-40% in the past six months have hampered the production capabilities of the industries in Tiruchy, as the industries are unable to fulfill the orders at the price that was agreed upon earlier.

Partial lockdown in other states has also caused a delay in the arrival of raw materials, opine industrialists. "Raw materials, which we get from states such as Maharashtra, are not getting here in time. Even the machines that we ordered are being delivered late, which affects the production. We are yet to see the effects of night lockdown," said the Former President of Tiruchy District Tiny and Small Scale Industries Association (TIDITSSIA) N Kanagasabapathy.

Industries say that April has been really bad for them, as the prices have increased manifold. Several industries, which are dependent on orders from BHEL, say that they are unable to fulfil the orders and have asked BHEL to cancel the orders.

"Steel prices have gone up more than 30% in the past six months. We can't match the prices of the orders. The second wave has impacted us a lot," says R Ilango, President of TIDITSSIA.

BHEL earlier had an escalation clause, which would take care of such an increase in raw material prices. Now, however, it is not there, which is forcing industries to request BHEL to just cancel their orders. Sources say that BHEL is telling industries that if they cancel orders, they would be blacklisted. "If we try to complete the orders with these increased raw material prices, many will lose all their money," said President of BHEL Small Scale Industries Association (BHELSIA) Rajappa Rajkumar.