Tough time for rain-hit producers

Tough time for rain-hit producers

Indian diamond, gems and jewellery market has been badly hit by the incessant torrential rains...

During century-record rains in the last days of July 2005, Mumbai has experienced a nightmarish week which it would not forget for years. With torrential rains leashing the metropolis, not only industry and trade but life itself came to a standstill. More water which had to be released from the huge Koyna Dam flooded the city and the death toll crossed 900 on July 31, 2005. Army, Navy & Airforce had to be called in for rescue and relief operations.

Indian diamond, gems and jewellery market has been badly hit by the incessant torrential rains that have been lashing India’s commercial Capital of Mumbai since July 26. Rains wrecked havoc on life and property in most parts of Maharashtra, especially Mumbai. The entire city went out of gear. Most of the businesses came to a grinding halt affecting production and exports. The gems and jewellery industry suffered heavy production losses, as manufacturers had to shut down factories. The attendance of workers had been poor since Tuesday July 26. Though many offices and factories managed to run with 50% staff on Thursday and Friday, the situation worsened on Saturday, July 30. Rain was continuing until Monday August 1, preventing many export consignments from being shipped to their destinations. According to sources, Customs remained closed for two days, which added to the delay in transfer of goods. Manufacturing units have reported a 70 to 75% loss in production during the week. Factories have remained closed for over three days in SEEPZ. Low-lying areas of MIDC and Andheri made commuting to production units almost impossible. As a precautionary measure most of the units have been shut down. Within SEEPZ some of the units in low-lying areas have been affected. Diamond World spoke to some of the manufacturing units for taking stock of the situation at their end.

Says Nalini of Tara Jewels which has a production unit in SEEPZ: “There are low-lying areas in SEEPZ where the roads are not yet complete and there is lot of water logging there. There is no point in getting the workers in and getting stuck, so we have stopped production as of now. Yes, it has hit exports but not in a major way. Things will be taken care of later. June and July are usually lean months. Major work of export begins only from August-end in the pre-Christmas period. The clients abroad are aware of the calamity and our helplessness.”

Mahendrabhai, partner of C. Mahendra: “We are facing at least 70% loss production-wise. In fact we shut down the factory on Monday at 12 noon due to heavy rains. The main problem is in SEEPZ and MIDC, otherwise operations in Gujarat and Surat are going as per schedule.”

Rains did not stop Jinendra Jain, Managing Director and CEO of Tache, from getting to the factory. “We hardly have 25% attendance and the factory is almost closed.” Talking about the production loss this week, he said over 75% production has been hit due to rains. “As far as exports are concerned, what we produced on Thursday and Friday, we were finally able to ship it across on Saturday as the Customs were closed on those two days. As the media is full of news about the torrential rains, our clients abroad are concerned and are constantly in touch with us. Some understand and some don’t. But under these circumstances nothing can be done. There is not much water-logging inside SEEPZ but the surrounding areas in MIDC and Chakala are flooded.”

”The situation has been very bad,” said a worried Rajiv Shah, Director of Diamant Overseas. “We have lost four working days from last Tuesday (July 26). The factory has been shut down due to rains. Luckily there is no water logging in the factory.

After IIJS we have had huge orders to meet and due to production loss we are not able to keep up commitments. With domestic clients it is okay as they are aware of the situation but with international clients it is a bit difficult,” he said. Taking the whole month into consideration, Rajiv confessed that at least there is a 20% reduction in production.

Govind Kakadia Chairman and Founder of Sheetal Group: “Things are pretty bad at our end. Everything is stuck and at a standstill. There is too much of water logging. Every year there is water logging but this year it is too much. Probably there is a drainage problem that has not been looked into,” he said. “In both our factories this week with loss of over three working days we have registered over Rs.10-20 lakh labour-production loss. Our export orders are not being met. Clients from the US and other countries are waiting to receive the goods but nothing has left from our end. When there is no staff how can we handle the situation? Export procedures involve various stages. At some end or the other due to lack of staff the consignment is stuck. We are helpless and incurring huge losses,” he added.

The SEEPZ zone being on a higher level did not see much of water logging but the area surrounding the zone is submerged in floods. According to sources, exports consignment has not been hit badly. Said Nitin Gupte, Group HRD Manager of Livingstones: “We were able to export as per schedule last week in spite of rains. Tuesday and Wednesday the factory worked as usual and our workers stayed back. The company took care of their basic necessities. As there was a red alert on Monday, we did not risk working and had closed for the day. Our next consignment is for Saturday, August 6 and we hope to send it across as per schedule. Many clients are aware of the situation and have given one week extension.”

Marzin Shroff, CMO of Suashish: “Fortunately for us, we suffered no damage of property. However, we did lose a lot of production time during this critical spell. During the rains, a lot of our people stayed overnight in the office as well as the factory. The torrential rains brought out the best in people. Showed everyone what teamwork means. The lesson that we learnt in Suashish was that Adversity brings out the best in people.”

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