With many of the small and medium fabrication units in Tiruchi turning sick in recent years, the Tamil Nadu Boilers Association has appealed to the State and Central governments to extend immediate assistance to enable the rehabilitation of the micro small and medium enterprises (MSMEs).
Fabrication units in Tiruchi, which came to be known as one of the best fabrication hubs in South Asia with the welding expertise gained with the help of the BHEL, were facing a major crisis. At one stage, Tiruchi was manufacturing more than 60% of the windmill towers required for the domestic market and came to be known as “tower city,” industry representatives’ point out.
Down the years, about 450 MSMEs were started with the annual capacity of 7 lakh metric tonnes of steel fabrication and manufacturing components. At its peak, around 40,000 employees were working directly in the sector and another 40,000 persons were extending various services to these units. Most of these units started as ancillaries serving BHEL and began light fabrication. But later many of them enhanced their capability and skills to manufacture any kind of complicated structures for boilers, windmills and other sectors.
Recessionary trends began in 2016 as many of the auxiliary units of BHEL could not get adequate orders from the public sector major. “Because of the recession due to the low order position of BHEL then, most of the units came under stress and turned non-performing assets (NPAs). The COVID-19 pandemic caused further problems, resulting in closure of around 150 units and several others turned NPAs,” said Rajappa Rajkumar, President (in-charge), Tamil Nadu Boilers Association.
Some of the units under stress were managing to survive with some interim relief measures announced by the Center in recent years. Out of the 51 units declared as NPAs, 31 were still surviving by mobilizing their own funds and through loans, in anticipation of a package from the governments.
Based on the representations, the Central and the State governments were considering some of the recommendations for implementing a rehabilitation package. “The MSME Ministry has forwarded our recommendations to the Department of Financial Services of Union Finance Ministry,” Mr.Rajkumar said.
The NPA units have been waiting for the past five years for the package. The banks after waiting for four to five years, started going for auctioning of NPAs which will be a total disaster for the industry.
“In the meantime, we initiated a legal process to stop the auctioning of the NPA units by banks and recently obtained an interim stay for eight weeks from the Madurai Bench of the Madras High Court. We approached the court purely for survival and we are not against the bankers, who we hope will consider our plea for a viable one-time settlement that could help restart our business,” Mr.Rajkumar said.
“We also request the Central and State governments to come out with a viable package at the earliest so that the capacity created and the capability gained over the past 20 to 40 years could be utilized for the growth of the MSME sector,” he added.