Power crisis: Kanpur tanneries see input costs rise by more than 50%

Sitting inside his cramped office in a dusty bylane of the Jajmau industrial area of Kanpur, a bespectacled Naiyer Jamal exudes an air of despair. The owner of a small scale tannery called Mukhdoom Tanning Industries, Jamal says that the frequent power cuts in the area this year have dealt a body blow to the sector which was just about coming out of the crippling impact of the Covid-19 pandemic.

“The power situation is awful this year. We are witnessing frequent power cuts without any scheduled roster. The small tannery owners especially are suffering a lot,” he says.

The Kanpur-Unnao leather cluster of Uttar Pradesh, which generates over Rs 12,000 crore annually in production and exports, has been witnessing extensive power outages. This has not only pushed up the energy input costs of the tanneries by more than 50 per cent, but have also led to significant loss of business and wastage of raw material.

Jamal, who is an office bearer of the Small Tanners’ Association in the state, says that unlike big tanneries and leather units, which have the wherewithal to install diesel generators for power backup, the smaller entities cannot afford them and are therefore left high and dry.

Says Javed Iqbal, chairman, Council for Leather Exports (CLE), central region, “When there are power outages, we have to run diesel generators, which raise our input costs. Although the industrial feeders are separate, there are stiff supply side constraints.”

Moreover, since leather tanning is a continuous process, any disruption in power supply results in the loss of the rawhide. This is further adding to the costs of tanneries which supply finished leather for a wide variety of leather goods like shoes, bags, upholstery, apparel and so on.

Kanpur’s nearly 262 functional tanneries account for almost 50 per cent of the output of leather in India.

Ashraf Rizwan, owner of Homera Tanning Pvt Ltd in Kanpur, says that if there is no power, an alternative power supply has to be immediately made available to keep the tanning process running. “Our energy costs are already up by nearly 50 per cent because we have to use diesel generators to deal with the power outages,” he says.  

Kanpur, a busy commercial city in Uttar Pradesh, is in the midst of a severe power crisis like many others across the country. The third part of a series captures the travails of tanneries from ground zero  

The daily power demand in UP has touched almost 23,800 Mw, while there is an average short supply of nearly 2,000 MW per day.  

Since the coal inventories in the state government’s thermal power plants are on the lower side, power generation has been at sub-optimum levels over the past several weeks. The Yogi Adityanath government has urged the Centre and the ministry of railways to augment the supply of coal to relieve the situation.

The state power utility, the UP Power Corporation Limited, is using a two-pronged strategy to overcome the power crisis induced by the shortage of coal. While it is subjecting consumers to unscheduled power cuts, it is also procuring power from the energy exchange at exorbitant rates to make up for the shortfall.  

Kanpur’s leather industry provides direct and indirect employment to nearly a million people and exports leather goods to the Gulf, Europe, China, Iran, and so on. The pandemic hit the industry hard due to cancelled orders and the reverse exodus of workers to their native places in Bihar and Jharkhand.

But it is not just leather — Kanpur is also famous for its hosiery industry as well as its spices and condiments. And the power crisis has impacted these industries as well.

Balram Narula, managing director, Jet Knitwears Limited, says that high coal prices, coupled with short supply ,has put the hosiery industry in a spot. “A large number of industries in Kanpur need coal to fire their boilers. Due to high coal prices, low supplies, and high demand for power because it is summer, the industrial feeder has also been affected leading to the current power crisis,” he says.

Shailendra Dubey, chairman, All India Power Engineers Federation (AIPEF), says that it is mismanagement and poor planning on the part of the state power utility that has led to an unprecedented power crisis in Uttar Pradesh.

“Despite procuring power from energy exchanges, the state is witnessing long spells of power cuts. I do not see any respite in the days and weeks to come,” Dubey says.