Bellary steel firms spark layoff fears
Shivakumar G Malagi TNN
Bellary: Thanks to the global recession coupled with government’s decision to allow import of melting scrap, there is no single feel-good factor for employees of steel and sponge iron firms in this ore-rich region. They are counting their days as many steel firms are closing down and set to serve layoff notices to their employees soon.
Industry sources said the region’s major steel plant -JSW Steels, which had planned to expand its production capacity from the present four million tonnes per annum (mtpa) to seven mtpa by October and up to 10 mtpa by 2010, has shut down its 1.2-mtpa capacity blast furnace. After Diwali, the ghost of mass layoff began looming large over the employees.
Calling the furnace shutdown as ‘advanced maintenance shutdown’, Vinod Nowal, managing director (commercial), JSW, Torangal, says, “Now, the steel is not selling at global market. We decided to reduce production for at least two months since, we do not know the days ahead are good or bad.’’
But, insiders say that 20 percent of the production has been cut short.
On mass layoff speculations, Nowal said, “so far, we have not sacked a single person, but embarked upon optimizing the manpower by holding back all the fresh recruitment process for next two months.’’
According to labour union leaders nearly 20,000 skilled workers, most of them engineering graduates in their mid-30s working with steel plants set up on the bank of river Tungabhadra in Bellary and Koppal districts, may get pink slips if the recession does not show any sign of recovery
in the next fiscal quarter. After Diwali, mass lay-off has become a speculation among workers in many sponge iron firms in this steel zone that houses around 50 plants. “Apart from the sharp slump in steel offtake in global markets, Indian government’s decision to let import of melting scrap has virtually ‘killed’ the sponge iron plants,” says Mohammed Iqbal, MD, Hothur Ispat in Bellary. The firm has already shut down one of its two plants.
“Where would you sell the sponge iron when melting scrap is available for $ 150 which is little costly to sponge and a better quality commodity. Government should put 10-15 per cent import duty on importing melting scrap to give life to sponge iron units,” Iqbal explained.
Shivakumar G Malagi TNN
Bellary: Thanks to the global recession coupled with government’s decision to allow import of melting scrap, there is no single feel-good factor for employees of steel and sponge iron firms in this ore-rich region. They are counting their days as many steel firms are closing down and set to serve layoff notices to their employees soon.
Industry sources said the region’s major steel plant -JSW Steels, which had planned to expand its production capacity from the present four million tonnes per annum (mtpa) to seven mtpa by October and up to 10 mtpa by 2010, has shut down its 1.2-mtpa capacity blast furnace. After Diwali, the ghost of mass layoff began looming large over the employees.
Calling the furnace shutdown as ‘advanced maintenance shutdown’, Vinod Nowal, managing director (commercial), JSW, Torangal, says, “Now, the steel is not selling at global market. We decided to reduce production for at least two months since, we do not know the days ahead are good or bad.’’
But, insiders say that 20 percent of the production has been cut short.
On mass layoff speculations, Nowal said, “so far, we have not sacked a single person, but embarked upon optimizing the manpower by holding back all the fresh recruitment process for next two months.’’
According to labour union leaders nearly 20,000 skilled workers, most of them engineering graduates in their mid-30s working with steel plants set up on the bank of river Tungabhadra in Bellary and Koppal districts, may get pink slips if the recession does not show any sign of recovery
in the next fiscal quarter. After Diwali, mass lay-off has become a speculation among workers in many sponge iron firms in this steel zone that houses around 50 plants. “Apart from the sharp slump in steel offtake in global markets, Indian government’s decision to let import of melting scrap has virtually ‘killed’ the sponge iron plants,” says Mohammed Iqbal, MD, Hothur Ispat in Bellary. The firm has already shut down one of its two plants.
“Where would you sell the sponge iron when melting scrap is available for $ 150 which is little costly to sponge and a better quality commodity. Government should put 10-15 per cent import duty on importing melting scrap to give life to sponge iron units,” Iqbal explained.
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