Rebar producer Mickey Metals based in eastern Indian state of West Bengal has put the integration project on hold, claiming high power tariff being charged by power distribution company, a company official said on Thursday, November 26.
He said that the power distribution company, servicing the areas around its plant, is charging INR 8/unit of electricity, while other distribution companies serving adjacent industrial areas is charging INT 4/unit, making Mickey Metal’s expansion project unviable.
According to the official, the higher electricity charges will entail input costs increase of about 10 percent on a cumulative basis, while margins from sales of finished steel rebar is not more than four percent in current market conditions.
Mickey Metal was planning to add a billet production facility to its rebar manufacturing plant as backward integration.