New Delhi, Jan 2 (KNN) Punjab Small Industries and Export Corporation Limited's (PSIEC) decision to close down its all raw material depots in state of Punjab has come as shocker for Micro, Small and Medium Enterprises (MSMEs), said Badish Jindal, President of Federation of Punjab Small Industries Association (FOPSIA).

In a letter to Punjab Chief Minister, Captain S. Amarinder Singh, FOPSIA President said “It is indeed shocking that recently in a board meeting held on December 17, 2018 the PSIEC has decided to close down its all raw material depots in the state of Punjab.”

Expressing disappointment on this, Jindal said that these raw material depots are the back bone of steel consuming industry, and the PSIEC was selling a good quantity of steel, pig iron and coal through these depots.

The closedown is surely going to impact the MSME’s as the companies are selling their material on slab discounts, he added.

The PSIEC is selling around 50000 m tons of steel to the MSME’s through their depots. The volume was high during last years but slowly and slowly the PSIEC is discouraging this scheme, said Jindal.

He said “Last month, the slab discount of Vishakhapatnam Steel Plant was around 2700 Rs per ton, which means that the big companies/traders gets the material cheaper from the steel companies and if some MSME will buy the same material from Vishakhapatnam Steel Plant, they will have to pay around 2700 Rs per ton more for the small quantities.”

The similar is in the case of SAIL and other companies, FOPSIA President pointed.

The MSME’s are ready to pay the service charges to the PSIEC for providing the material, which can prove to be a good source of income, despite that they decided to close these depots.

“The closure of raw material deports seems to be a conspiracy with the MSME’s to give an underhand benefit to the large manufacturers”, added Jindal.

This PSIEC was started in 1962 for the promotion of MSME’s in the State and since 1970 the PSIEC is supplying the material to the Industry, said Jindal.

Jindal said “There are more than 1 lakh steel consuming industries in the state and this decision will surely put a question mark on the existence and growth of steel consuming MSME’s of the state.”

Requesting Chief Minister to look into this matter, Jindal said that due to this decision the MSME’s will left with only option to procure directly from the steel plants which will be 1500 Rs to 2500 Rs higher as compared the large companies/traders. Or the MSME’s will have to buy the steel from traders by paying higher prices.

Adding to the statement, he mentioned that PSIEC was also giving the handling and storage facilities to MSME’s and due to its closure the MSME’s will fail to get the long term contracts from large companies.

In its manifesto and as per industrial policy the state government has assured to promote the MSME’s in the state but on the contrary the government has decided to discontinue the raw material supply facility to the MSME’s which is the back bone of MSME industries, pointed Jindal.

Highlighting the issues, Jindal requested CM to kindly revert the PSIEC decision at earliest to save steel consuming MSME units.