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Pune: Steep ascent in raw material costs impedes industrial recuperation

A lofty ascent in costs of crude materials, particularly that of concrete and steel, has seen Pune’s modern exercises leveling in the wake of recording month-on-month recuperation since the previous few months. With numerous units choosing to place brakes on their tasks considering misfortunes, this unforeseen brakes has confused numerous with little break in sight.

The month to month overview of mechanical exercises did by the Mahratta Chamber of Commerce Industries and Agriculture (MCCIA) likewise discussed the unexpected smoothing of the bend for December. The review, that was delivered on Saturday, indicated ventures have revealed only 1 percent expansion in their creation from November. “On an average, the surveyed companies said that their current level of production has only marginally increased from 78% in November to 79% in December 2020,” the study said. The review had announced nearly multiplying of mechanical exercises since the focal and state government has permitted the returning of the area.

One of the fundamental explanations behind this level development rate, industry specialists said was primarily the uncommonly significant expense of steel, which is the essential crude material of the greater part of the MSME units operational in the zone. Cost of steel has increased in value by more than 55 percent which has drawn consideration of the association serve Nitin Gadkari. Gadkari, had in December, kept in touch with the Prime Minister to find a way to forestall such steep ascent in crude material costs.

Industry insiders stated, considering the lofty ascent in crude material costs, a significant number of the more modest units have chosen to suspend their tasks. “If the profit margin of the unit is just 5-10 per cent this, rise in raw material prices do not warrant operations. While order books are relatively good, the cost of operations has become too high,” they brought up. Units in Pune need around 20,000 tons of steel consistently.

Sudhir Mehta, President, MCCIA stated, “While there is the month-on-month progress, we hear that MSMEs facing some acute challenges. One of the key challenges faced in recent past is that of escalating raw material prices, especially that of metals like iron, steel and aluminium and even plastic. This is making operations of many unviable. We appeal to the government to take note of this and intervene appropriately.”

Disclaimer: The views, suggestions, and opinions expressed here are the sole responsibility of the experts. No Daily Pune journalist was involved in the writing and production of this article.

 

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