If Haldia Petrochemical's production facility continues to remain shut for a few more weeks, the future of some 2,500 odd downstream units across West Bengal will turn uncertain and at least 50,000 jobs may be lost, according to the Indian Plastic Federation. As per Economic Times, Haldia Petrochem stopped production some 25 days ago due to a mechanical failure. It continues to remain shut following scarcity of working capital.
"If the shutdown continues for the next one month owing to acute shortage of raw materials for processing, it will result in a job loss of around 50,000 people. Over 80% of the small and medium-size units are already on the verge of closure following the HPL stalemate. A cluster of 150 units manufacturing high density plastic moulding has stopped production. These units are even ready to pay in advance for the products they buy from HPL so that it can help ease the company's working capital crisis. We know HPL has a problem of liquidity. Earlier too we offered advances for procuring products. A similar mechanism could be introduced again," said IPF president Pradip Nayyar. "IPF has already sent an SOS to state commerce and industries minister Amit Mitra. There was a shutdown in HPL plant in early July following a technical snag at the mother plant. It continues to remain shut. Smaller downstream units are particularly affected because they are not in a position to import raw materials due to their size.
The IPF chief indicated that HPL can mobilize around 100 crore from the processing unit through this formula. HPL used to supply 36,000 tons of materials per month nationally till the shutdown vs its optimum capacity of 80,000 tons per month. Ashok Jajodia, secretary of IPF said the state government, too, would stand to lose 80-100 crore revenue every month if most of the downstream units closed down.