It is reported that shortage of primary raw material for steel has caused four of the 5 steel industries in Pasakha at Phuentsholing in Bhutan to temporarily close down.
Except for Druk iron and steel, Lhaki steel and rolling mills, Bhutan Concast, KK steels Private Limited and Bhutan rolling mills stopped operating, with some of them being closed for more than a month.
According to the Mr Letho secretary general of the association of Bhutanese industries, raw material could not be transported as there is a delay in the placement of railway rakes in India. Also, there’s a delay in the movement of rakes carrying industrial raw material from India to Bhutan.
He said that “The Bhutanese steel industries don’t have a choice but to temporarily shut down and wait. If they have to transport the raw material through other means, then it would incur a huge cost. If the trend continues, other industries that import raw material from India, like the ferro and calcium carbide industries in Bhutan that imports coal from India are also expected to share a similar fate.”
Mr Letho that temporary close downs were quite frequent since September last year, according to association of Bhutanese industries, owing to delays in getting the raw material on time. “We didn’t raise the issue earlier but now, since it’s getting severe, we’ve submitted our petition to the government.
An industrialist, who chose anonymity, said that, with the frequent close downs, the total cash flow of the company was affected. The burden of fixed cost like depreciation, interest and wages increases and we land up defaulting the banks and our creditors.
Steel plants in Bhutan manufacture TMT bars, billets, ingots and structural steel and sold in India.
Industrialists said that the steel industry in Bhutan hasn’t seen much improvement since the global financial crisis in 2008. The issue of exemption on excise duty while purchasing raw material still remains a hindrance. |
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