After the commissioning of the Rourkela Steel Plant (RSP) in February, 1959, many ancillary industries were set up in Sundargarh district with private initiatives.
This not only gave a fillip to the economy of the locality but also brought out significant changes in the lives of the people in the tribal-dominated district. As Rourkela grew up as a dominant business hub and a metro city, gradually many businessmen from other States poured in and started their ventures here.
A decade back, the establishment of small and medium industries was rapid in the district when demand for iron was at its peak in the international market. But the presently many of the industries which were established before 2007 are in a move to shut down fully or partially due to recession, shortage of raw materials, hike in electricity charges and lack of Government support.
Though the State Government has been promoting industrialisation in the State by giving a lot of sops to the big ticket ventures, it has gone virtually nonchalant about the small units. As a result, now the situation has come to such a pass that these units are heading for a shutdown. If the situation continues, it will trigger unemployment and retard growth of the locality, warned experts.
Source said in 2000 the mineral and metal industries were set up in a large number in the district. Subsequently, about 45 sponge iron units and 60 induction furnaces were established. Initially, these units were earning 100 per cent profit and now that has come down to 30 per cent. It is due to shortage of coal and iron price hike by three times, said experts. Similarly, the electricity charges too have gone up.
In order to curb loss, many have either closed down or are running by huge cut in manpower and other expenses. There was a time when the State used to export steel rod, sponge iron and ingots, but now, the State is importing them all.
A Government report says so far 15 sponge iron units have been closed down and 30 others have reduced their production in Sundergarh.
Similarly, 32 induction furnaces, eight rolling mills, 89 iron ore crushers, 10 stone crushers, nine ferro alloys units, 10 rice mills and more than 100 SSIs have been closed down.