Cyclone Michaung: How Chennai’s industrial landscape is dealing with the aftermath

Ravaging effects of floodwater

In the industrial heartland of Manali, the Vichoor SIDCO estate, home to 110 companies predominantly in the chemical and paint industries, stands inundated.

As of Thursday (December 7), floodwaters standing at an alarming height of 8 to 10 feet at several points, have submerged whole industrial units which employ hundreds of workers, and amounted to damage of about Rs 160 crores.

One of the hardest hit is SM Tower Technologies, owned by SA Shafique, having suffered a loss of a whopping Rs 3 crores. His plant, once bustling with activity, now lies in ruins with the zinc bath, and the adjoining section for collecting zinc ash destroyed. Approximately 20-30 tonnes of zinc ash, intended for recycling and valued at Rs 1.5 crores rupees, is now just a part of the flood’s wreckage.

But for Vichoor’s industrial units, the devastation doesn’t end there. Expensive electrical machinery equipped with sensors has also been rendered useless by the floodwaters. While this is not Chennai’s first flood, as Shafique himself pointed out on Wednesday, nothing compares to the magnitude of destruction this time.

For some companies, revival is far from certain. Take Shafique’s neighbouring facility, Sriram Cold Forgings Private Limited, as an example. “Here too, all electrical machinery is damaged. The absence of power only adds to the grim scenario, casting a shadow of uncertainty over the company’s revival,” Shafique said.

Larger companies able to restart operations

Shankar Vanavarayar, Chairman of the Confederation of Indian Industries (CII), spoke to The Indian Express about the extensive damage across Chennai and neighbouring districts due to floods on Monday.

“Industries affected are largely IT industries in Old Mahabalipuram Road (OMR), as the entire stretch upto Sholinganallur was heavily impacted. Commercial establishments and industrial units operating in Chennai, Kancheepuram, Chengalpet and Thiruvallur districts have also been affected due to the cyclone,” Vanavarayar said.

Among bigger players, IT companies have taken the hardest hit with flooded facilities keeping employees out for the second day running. “IT companies have predominantly switched to work-from-home modes, barring critical operations,” he said.

Notably, despite waterlogging, larger companies and manufacturers have faced “minimal damage” when compared to smaller industries.

“We have information that very few large companies such as TVS have faced severe water logging issues, and all of them managed to run operations without a shutdown except for the first two days of the floods. Major commercial establishments have also resumed operations,” a senior CII official told The Indian Express.

MSMEs hit hardest…

K Mariappan, Chairman of the Tamil Nadu Small and Tiny Industries Association (TANSTIA), said their loss may be anywhere around Rs 1000 crore.

“Almost all MSMEs in the Chennai region suffered extensive damage. Both the Guindy and Ambattur Industrial Estates are badly affected. The waterlogging has damaged crores worth machinery and materials in several units. It may take a minimum of 2-3 weeks to resume operations in many places,” he wrote in a letter to Chief Minister MK Stalin seeking a compensation of Rs 1000 crore.

The relentless deluge has brought operations to a standstill in industrial estates such as Ambattur, Thirumudivakkam, Perungudi, and Thirumazhisai.

The Thirumazhisai Industrial Estate (TIE), which has over 300 units within its boundaries and an additional 600 outside, bore the biggest brunt of the disaster, with the whole area submerged under 3-4 feet of water. The situation in Ambattur Industrial Estate is not much better, with the Ambattur Industrial Estate Manufacturers Association (AIEMA) issuing a desperate plea for immediate intervention citing catastrophic damage, with machines, raw materials, and finished goods worth an estimated Rs 2,000 crore submerged in water.

…. but still left out of NDMA’s disaster relief framework

Mariappan said MSMEs affected by natural calamities such as storms and floods cannot receive any compensation, since they are not included in the eligible list to receive compensation under the National Disaster Management Authority (NDMA).

“This is a huge setback for industries and we should be included in the list. He added that Hundreds of MSMEs in Nagapattinam district were affected by flood damage due to Gaja cyclone in 2018 and till date the Union Government has not provided any compensation to them. We request the Tamil Nadu government and centre to take steps to give importance to the MSME companies to include them in the list of eligible companies to avail the financial assistance,” he said.

Disparity in Recovery

Thus, a stark contrast has now emerged in the plight of large industrial units, and MSMEs.

According to the state government, over 90 per cent of firms within the industrial estates managed by the State Industries Promotion Corporation of Tamil Nadu (SIPCOT) have resumed operations from Wednesday itself. This swift recovery has been attributed to the robust infrastructure facilities like land, power, water, roads, and communication networks that cater primarily to large and medium-scale industries.

However, in stark contrast, MSMEs under the purview of the Tamil Nadu Small Industries Development Corporation Ltd (SIDCO) have faced severe challenges, and borne the brunt of the floods. These units, often lacking the comprehensive infrastructure advantages of their larger counterparts, have sustained greater damages, and disruption.