Five paper mills in Vapi GIDC have been temporarily shut down in the past one month due to coal shortage, leaving over a thousand workers jobless. Vapi Industries Association has decided to make representations to the Central and state governments for smooth supply of coal to save the struggling paper mills.
Speaking to The Indian Express, Gujarat Paper Mill Association president Sunil Agrawal said, “Five paper mills in Vapi have shut down temporarily due to the short supply of coal over the past few days, while many others are struggling for survival. The electricity rates are high, as a result of which the industry is burdened. If the supply of lignite coal is not streamlined, more units may shut in the coming days. Over a thousand people have lost jobs as of now… Production has also been reduced.”
According to industry sources, there are around 100 kraft paper mills in the state, of which 40 are in Vapi GIDC. These mills use coal in the boiler to generate steam used to dry the wet paper. Since September, coal is short in supply, affecting work at paper mills. A single paper mill employs around 300 people, of which majority are on contract basis.
There are 40 paper mills in Vapi GIDC that consume 60,000 metric tonnes of coal per month, said Agrawal, adding, “The yearly turnover of the mills is around Rs 10,000 crore with a production of 2 lakh tonnes. Paper mills use coal imported from Indonesia, while some use local lignite coal and some use a mixture of both. Indonesian coal has high Gross Calorific Value. China recently started procuring coal from Indonesia after which supply to India got affected. The supply of lignite coal is not sufficient to fill the shortage.”
Adding that the price of imported coal has gone up from Rs 5,000 per tonne a month ago to Rs 15,000 now, Agrawal said it may cross up Rs 20,000 per tonne. “Earlier we were getting a credit period of 90 days from the day of purchase but now the traders are demanding advance payment, taking advantage of the situation,” he added.
According to Vapi Industrial Association president Kamlesh Patel, “We have decided to make representations to the state and central governments, urging smooth supply of lignite coal to save the industries. Not just paper mills, other industries that use boiler steam are also affected due to coal shortage.”
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