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Cyclone devastates Gujarat industry

Syed Firdaus Ashraf

It's not windy in Kandla any more. And so the people are beginning to get back on their feet again after the cyclone devastated business in the second largest port of India. But there is a long way to go.

The destruction affected oil terminals, jetties, transportation facilities, factories, buildings, warehouses, storage tanks, timber industry and, most important, the salt industry.

"The damage to the salt industry is irreparable since Kutch produces nearly 2 million tonnes of salt. That has been affected by the cyclone," says Sukhraj A Sanghvi, managing director, Friends & Friends Shipping Pvt Ltd, the largest individual salt producer in Gujarat.

Gujarat produces nearly 7 million tonnes of salt, 70 per cent of India's requirement of 10 million tonnes. For the moment, the salt industry is down on its knees.

According to salt pan owners, the tidal waves devastated 21 salt pans spread over 32,000 hectares in Jamnagar that produced 30 per cent of Gujarat's salt. In Kandla and Gandhidham, the damage was far more extensive since nearly 100,000 acres were ruined.

Among the major salt manufacturers in Jamnagar district are the Birla Salt and Chemicals Ltd and Tata Chemicals, which own more than 15,000 acres. Huge losses were also suffered by the Chowgule group, Kamdar Industries, Ballarpur Industries and the Sikka Salt Works.

The salt producers expect the prices of salt to rise from Rs 200 per tonne to Rs 500 per tonne by next month if the government does not take proper measures.

Says Sanghvi, "Not a single owner had insured their salt pan since the premium for salt insurance is very high at Rs 25 per tonne, whereas the manufacturing cost for the salt is Rs 150 per tonne. So it does not make sense to go in for insurance. And considering the damage, it looks like these salt pans cannot return to business for another six months."

Like Sanghvi, many businessmen have advised the government to provide sop loans to the industrialists otherwise, the effect on the consumer end for salt and other goods will be devastating.

Says Shanker R Vazirani, president of the Gandhidham Chamber of Commerce and Industry, "Kandla port is the feed point for many essential commodities such as petroleum products, foodgrains and raw materials for industries to north India. If the government does not come up with some constructive plan soon the entire Indian economy will be affected."

Oil products have also suffered since Hindustan Petroleum shifted its operations from Vizag to Kandla after the fire last year.

Says Kandla Port Trust chairman A N M Kishore, "HPCL shifted its operations to our side (the west coast) after the fire iin Vizag last year. Therefore, this sector is worst affected."

Says N V Patil, chief terminal manager, Indian Oil, at Kandla, "Our company's losses will be approximately around Rs 40 million. But we hope to restore normalcy in a month's time."

The power sector has also been badly affected. According to the Gandhidham Chamber of Commerce and Industry, the loss to the Gujarat State Electricity Board is around Rs 1.25 billion. It will take at least four months to restore it to normalcy.

Says Dilip Shirodker, manager, operations, Geepee Bulk Handlers Pvt Ltd, "The storm has slowed the already sluggish export market. Foreign buyers will be apprehensive to buy Indian goods. They may feel a particular product is not 100 per cent pure."

Non-availability of labour also hinders restoration of port activities. Labour usually available for Rs 100 a day is not available today even for Rs 300. Most workers seem afraid to work at Kandla though they came because of the better pay.

Says the KPT's Kishore, "The biggest problem is to bring back the labour. Everybody has left for their villages. Those residing nearby are still shocked by the accident. Considering these factors, I feel meeting our target of handling 40 million tonnes this year will be impossible."

The worst affected are those who worked on the salt pans. Out of 1,000 salt workers in Kandla, not one is available now.

Says Raj Dhan Rama, a contractor, "I have visited at least 20 villages to persuade the salt workers to return. But nobody is willing to come due to fear. I think if this goes on, the salt operations will face a severe crisis in Kutch district."

According to Sanghvi, only the Kolis of Gujarat know the right technique of producing salt. Unless they return to work, there is no way salt production can improve.

The shipping industry too faces huge losses. Twelve ships were grounded during the storm. Some ships drifted away in the storm.

"These ships have no future except for scrap," says Brind Lee, a Sri Lankan merchant navy officer.

Says Shirodker, "The longer it takes to rebuilt the port, the longer will be the frustration of exporters as well as all the people of Kandla."

GCC&I estimates the losses thus: Timber industry -- Rs 530 million; transport industry -- Rs 1 billion; import-export -- Rs 1.5 billion; cranes and machinery -- Rs 1 billion; barges, ships and tugs -- Rs 4 billion; and the salt industry -- Rs 1.17 billion.

Says Vazirani, "This is an approximate figure, but I feel the loss can be much more higher, closer to Rs 30 billion, since nobody actually totalled the losses."

EARLIER REPORTS/FEATURES:
Bad communication sealed Kandla's fate
When death came calling -- at 195 kmph
Stricken port struggles to regain its feet