India: Coal supply curb drags unrest in SMEs of aluminium supply chain

On 25^th October 2021, the group representing Indian organizations involved in the industrial production and consumption supply chain activities across the country, the Indian Industrial Value Chain Council (IIVCC) labelled that 5000 plus SMEs who are associated with the aluminium value chain are in panic of suffering hefty losses if the ongoing coal supply distress challenging the primary aluminium industry is not immediately resolved.

Out of 5000 MSMEs, around 1000 SMEs are associated with the supply chain and ancillaries of large aluminium producers and related input manufacturing industries, whereas, around 4000 SMEs are comprehended in the aluminium downstream manufacturing and distribution ventures.

It has been also notified that any substantial unsettling in the market drift for the aluminium sector in India will have an abrupt drastic financial strike on these SMEs.

The nation is experiencing a strong economic recovery and witnessing an unanticipated surge in demand across industries in the post-pandemic phase. However, at this stage a dreadful shortage of coal on the back of supply restrains is denting the aluminium production and the industry is stumbling to sustain operations putting an alert on coal stocks of only 1.5-3 days as compared to the stipulated level of 15 days.

Abhay Raj Mishra, National Convenor and Member, IIVCC, said: "Micro, small and medium enterprise sector is today the key to India's vision of Self-reliant. Efforts taken by our government to recognise MSME as a priority sector and provide a host of supportive measures are laudable. However, a large section of Indian SMEs whose businesses are intricately linked to the aluminium industry is today staring at a bleak future."

“An acute shortage of coal for the non-power players, particularly primary aluminium manufacturers puts these plants at the risk of a sudden closure, which can spell doom for more than 5000 SMEs dependent on them across the country. We pray to the national leadership to do everything to avert this mega-crisis and save the lives and livelihoods of lakhs of people employed by these SMEs."