Kerala floods aftermath: In plywood hub, bankrupt entrepreneurs still wait for insurance claims

Kerala floods aftermath: In plywood hub, bankrupt entrepreneurs still wait for insurance claims

In part-2 of a three-part series, goes back to timber hub Perumbavoor where companies are staring at huge losses with relief still delayed

Kerala floods: In plywood hub, bankrupt entrepreneurs still wait for insurance claims
The heavy downpour followed by the raging floods in Kerala proved to be the death knell for Moideen and many plywood entrepreneurs in Perumbavoor. (Express Photo: Vishnu Varma)

S K Moideen is wary of attending calls on his cellphone these days. Too often, calls are made by his debtors to whom he owes a great deal of money. Sometimes, their threats are veiled. Sometimes, they are direct and open.

“Just today, I am supposed to pay one of them Rs 2 lakh. But the truth is I don’t have any cash at all,” says Moideen, sitting at a hotel in Perumbavoor, a town 40 kilometres from Kochi in Ernakulam district.

Until mid-August this year, Moideen ran one of the biggest plywood businesses in Perumbavoor, considered the hub for timber trade in Kerala. Started in 2001 doing just peeling works, his business grew and diversified over time into three units of plywood trade, two of which are owned and managed by his sons now. After the twin setbacks to the economy in the form of demonetisation in 2016 and then the roll-out of the Goods and Services Tax (GST) last year, profits in the business had come down significantly. Still, according to Moideen, his family-owned business was stable and did not incur losses. But then in mid-August, the heavy downpour followed by the raging floods in Kerala proved to be the death knell for Moideen and many plywood entrepreneurs in Perumbavoor. In several low-lying areas of the town, the floodwaters of the Periyar river rose as high as 40 ft, breaking down compound walls, sinking stocks of face veneer and wood veneer worth crores and damaging costly equipment. Within a matter of days, Moideen’s business had completely crashed. His estimated loss: Rs 3 crore.

“Ippo ithonnum paranjitu karyamila, ellam poyi. Ningalku enthengilum cheyyan pattuo? (There’s no use of talking about all that now. It’s all gone. Can you do something about it?),” an anguished Moideen said.


Over the last two months, Moideen has been making regular trips to the local banks, the sales tax office, the insurance companies and government offices to move paperwork regarding flood-related compensation. He says he had high hopes from the ruling LDF government which promised interest-free loans for businesses which were impacted by the floods in the state. But the wait so far has been disappointing, he remarks.

“Government officials came to my factory at least three times. Then industries minister AC Moideen also came and promised all help. But no decision has been reached. Unless anyone helps us, we cannot move forward,” he says.

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“We have filed all the balance sheets and documents that insurance companies asked us to submit. We are still waiting. If I have to restart operations, I would need at least Rs 2 crore. Forget that, if the interest-free loans are at least sanctioned, I can somehow clear my liabilities and begin work again,” he adds.

The prospect of restarting work and rebuilding the business from scratch, especially when he is in his 50s, against some large liabilities to pay is daunting for entrepreneurs like Moideen in Perumbavoor. The town is host to some 450 small and large-scale timber-related industries offering employment for thousands of people. The easy availability of timber, the presence of allied industries and mechanics and the supply of labour in the form of inter-state workers makes the town the perfect launchpad for plywood trade. For decades, the town even exported high-quality plywood to Gulf countries, but over the years, more affordable Chinese plywood has given tough competition. Still, major cities in India as far as Ahmedabad and Delhi regularly receives truck loads of stocks that flow from Perumbavoor.

Post floods, the small town now stares at troubled times. Close to 70 of the 450 timber businesses including some big ones like Moideen’s have suffered giant losses, many of them in excess of Rs 1.5 crore each. The state government knows the importance of the timber trade and how important it is to the state’s beleaguered industrial economy.

Biju P Abraham, general manager of the District Industries Centre (DIC), which brought the plywood businessmen for talks with district administration and the insurance companies, said the government is seriously introspecting about a programme aimed at alleviating the losses of flood-affected sectors.

“It’s not official yet so I can’t talk about it. But talks are going on in Thiruvananthapuram. At the DIC level, we held talks with the plywood businesses and the insurance companies. We have got around 18 complaints regarding delay in disbursement of insurance claims. The next meeting will be attended by the collector,” said Abraham.

But Moideen is clear about his plans if government assistance doesn’t come on time. “I will just sell the business off. I don’t know if I will get any money for it, but I will just do it,” he said.

A few kilometres away, at Chaithanya Plywoods, Meeran Kunju has slowly restarted operations, albeit with some extremely tough measures. With the floods washing away stocks worth Rs 1.5 crore, Meeran Kunju and his sons, both involved in the business, had to look for some urgent working capital to offset mounting losses. Every day the factory remains shut, the losses keep piling up.

“There are a lot of friends who are aware of our circumstances. We borrowed money from them. We also had to sell off gold and jewelry belonging to the women in our family to find the required money. With the money we collected, we repaired all the equipment and began work. Orders are few and far between, but it’s important to start working,” says Kunju, sitting in his tiny office at the factory.

Like Moideen, Meeran Kunju too has submitted all the paperwork regarding the insurance claims and understands that it will take time to process.

“The total insurance amount is Rs 60 lakh. Two weeks ago, they called and said an installment is ready. Every day when we call, they say it will happen any day. We are waiting, what else can we do?” he says.


“Pratheeksha aanu ellam. Pratheeksha vechu aanu munnottu povunnath (Hope is everything. It’s because we are hopeful that we are moving forward),” he adds, with a smile.