Tamil Nadu's deadly rains hit industries hard

As mother nature wreaked havoc with heavy rains pounding Tamil Nadu, various industries, in the State capital, which is also called the Detroit of India, were badly affected. After the recent Global Investors’ Meet (September 9-10, 2015), Tamil Nadu Government’s plans to make the State industrial giant came to a nought, albeit for a while as flood fury caused several thousand crore rupees loss during the last three weeks, starting from the first week of November.

While the Tamil Nadu government estimates the total economic loss of tier-1 cities from the recent floods at Rs 5,000 crore, trade analysts say the loss for both  small businesses and big industries could be anywhere between Rs 10,000 crore and Rs 15,000 crore.

 The State capital and its neighbouring Kancheepuram and Tiruvallur districts, which encompasses most part of city suburbs, were pounded by unprecedented heavy downpour from November 10, marooning people in various areas. For the first time, several auto majors near the State capital including Ford, Renault-Nissan, Daimler India and Yamaha were forced to down their shutters due to the record downpour as many of its employees were stranded at different parts of the region.

“Due to heavy rains and significant flooding in Chennai, we halted production at our Chennai assembly and engine plants for two days. Our prime importance was to monitor the safety of our employees, and the members of the Chennai community, and provide necessary transportation for employees from the city to the plant. Currently, we are assessing the affected places post the heavy rains,” George Elisseou, HR Director, Human Resources at Ford India, told Deccan Herald.

The production loss due to the brief non-functioning of automobile majors is expected to be about Rs 200 crore. The State’s Micro, Small and Medium Enterprises (MSMEs), which account for the largest number (15.07 percentage) in the country, too suffered setbacks during the torrential rains.

There are 6.89 lakh registered MSMEs in the State, producing over 8,000 varieties of products for a total investment of more than Rs 32,008 crore. Most of the SMEs are situated in the low-lying suburban Ambathur and Guindy areas of Chennai. “There are more than one lakh MSME units that are functioning in these areas,” a senior official from the Tamil Nadu Small Industries Development Corporation (SIDCO) said.

“The torrential rain which dislocated normal life has took a heavy toll on the trade and industry to the tune of over Rs 10,000 crore, while small scale industry across Tamil Nadu has been the worst affected,” said D S Rawat, secretary general of the Associated Chambers of Commerce and Industry of India (ASSOCHAM) on the scale of the financial fallout from heavy rains. According to him, transport services have also been severely affected along with the engineering industries, textile, tourism, and a host of other sectors.

Bus industry worst affected 

“The loss to various sectors could also be attributed to the transport industry as it is the main component for all industries, including for the workers to move from one place to another,” he said. Estimates suggest that the overall bus industry in Tamil Nadu took a hit of close to Rs 150 crore over the four days of deluge, due to heavy cancellations and seat losses. Arun Athiappan, CEO of Ticketgoose.com, a bus ticket booking portal, observed: “We had a surge in cancellations in the last four days. There were calls to our customer care requesting ticket cancellations as passengers could not travel from their houses to the bus boarding point.”

 Ravi, a Chartered Accountant, who visits his family in Bengaluru every week, said: “I held onto my ticket till the last one hour of my travel, but then with no respite from the rain and the roads being flooded, I had to cancel my trip.”

Even the supply of essential commodities and vegetables came to a standstill from November 9, as most of the trucks got stuck in the flood at various places across the State.

R Sugumar, president of the Tamil Nadu Lorry Owners Association, said: “Several thousand trucks were stranded in many highways due to flood. The trucks not only carry essential commodities, but also transport several goods for industries. Since most of the national highways, including Chennai-Bangalore, Chennai-Puducherry-Nagapittinam, and other highways that lead to southern districts were flooded, the truckers suffered a loss of about Rs 200 crore in just a week,” he said.

According to him, the supply of vegetables from neighbouring Andhra Pradesh and Karnataka were hit as lorries were stuck in many places. He said  at least 4,000 lorries are into supplying vegetables every day. About 50 per cent of the supply has been hit due to the rains,”he said.

No spark during this Diwali

The heavy rain also dampened the spirits of Diwali celebrations as the Rs 5,000-crore cracker industry suffered a huge loss with sales almost reduced to 50 per cent compared with last year. Senior advisory committee member, Tamil Nadu Fireworks and Amorces Manufacturers’ Association (TANFAMA) A Asaithambi, said sales crashed to Rs 3,000 crore this year since purchases were totally down during the two days before and after Diwali due to heavy floods and rains.

However, major IT companies in Tamil Nadu did not suffer any loss since they had facilitated ‘working from home’ option to their employees, who were stranded due to heavy floods.

Nasscom regional director Purushothaman K said that many marooned staff working for IT majors, including Wipro, Cognizant and Tata Consultancy Services, opted to discharge their official duties from their residences. “Therefore, there is no question of loss to the IT industry,” he added.

“I got stuck in my house since last Friday due to heavy water logging. However, my company allowed me to work from home following my request,” S Sriram, project manager at US-based IT company Verizon, said. IT major Wipro said due to heavy rainfall, the company shifted employees to safer locations after assessing the ground situation. Similarly, other private companies too offered similar requests to their employees.

“Though my house is not flooded, it is difficult to commute to the office as the way was fully flooded. So I opted to stay at home and work,” K Venkatesan, an artist, working for a leading publishing company, said. However, professionals like accountants, courier staff, electricians, salesmen, medical representatives and others had no other option but to wade through the flood waters to reach their respective offices.