Cyclone Michaung: Brand Chennai takes a hit as production in key industrial units disrupted

“The MD of SIPCOT was deputed to take action early today. Our team worked swiftly and ensured that the industrial areas were drained,” he said.

SIPCOT is also involved in recovery efforts within industrial parks, focussing on firms providing essential supplies. They  are clearing fallen trees, restoring power, ensuring water supply, and pumping out water in order to maintain a continuous supply of commodities to the general public.

Key industries impacted

Chennai is home to several key automotive and chemical plants, including TVS, Wheels India, Sundaram Fasteners, Brakes India, etc., which witnessed production delays on December 4.

Major companies like Hyundai and Royal Enfield, along with international players like Taiwan's Foxconn and Pegatron, were compelled to halt production, impacting the supply chain, particularly for Apple iPhones.

However, Foxconn and Pegatron have resumed operations in a phased manner, sources close to the development told Moneycontrol.

Chennai's tech corridor, the Velachery-Perungudi-Sholinganallur belt, along with the key industrial area Ambattur, was also severely affected.

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“Ambattur Industrial Estate was severely affected, with initial estimates indicating a loss of around Rs 2,000 crore,” G Aravind, president, Ambattur Industrial Estate Manufacturers’ Association, told Moneycontrol. More than 1,500 manufacturing units and companies in Ambattur have suffered losses.

“Our initial estimates put the loss at around Rs 2,000 crore, but it may increase. It will take seven days to a month for units to reopen. Power has been partly restored, but in many units, the machinery has been damaged due to flooding from the nearby Ambattur lake. The impact was more severe than in the 2015 floods." Aravind added.

K Purushothaman, former regional director of NASSCOM, said calamity hit 45 km-long Old Mahabalipuram Road tech-corridor especially hard.

“The waterlogging, power outages, mobile internet disruptions affected the living conditions of people. They are recovering, but it will take some time. For most tech companies, there are always back-up resources when a particular area is affected by calamities or other emergencies, where employees in other places pitch in,” he added.

Toll on SMEs

Several SMEs belonging to the textile, auto parts,  and other industries faced heavy losses due to flooding and lack of electricity.

The Kakkalur Industrial Estate in Tiruvallur is among those affected. K Baskaran, Secretary, Kakkalur Industrial Estate Manufacturers Association (KIEMA), told Moneycontrol, "There are around 350 micro, small, and medium units here, mostly belonging to the auto sector. Water entered about six to seven units. On Monday and Tuesday, all units were shut down due to lack of power. We received power only on Wednesday evening. We are yet to assess the losses.”

Return to normality

Several automobile companies in Kancheepuram and other areas also incurred significant losses, running into crores. They are now striving to return to normality and resume production.

“There may not be any change in production targets, but it is a grim situation in Chennai. Delayed transportation of goods and a labour shortage due to the floods is one of the major issues we are facing,” said an executive at a manufacturing firm.

Industries have asked for better infrastructure in Chennai.

"The government is doing its job, but there should be a strategy involving all stakeholders, including private firms, investors, and the workforce, to tackle disasters in the future. While 2015 flood was a man-made disaster, 2023 flood was a natural one. Many volunteers, NGOs, and others are involved in rescue operations," said Purushothaman.

Due to severe weather conditions, the Tamil Nadu government declared a public holiday on December 5 in Chennai, Tiruvallur, Kancheepuram, and Chengalpattu districts, and issued a work-from-home advisory to private companies.

One of the country's largest manufacturing hubs, Chennai has been hit by floods in 2015, Cyclone Vardah in 2016, and  now this. Strangely, all these disasters occurred in December, giving rise to familiar challenges: flooded roads, submerged low-lying areas and subways, power outages, and disruptions in mobile and internet services.

Thousands of people were stranded due to the closure of the airport, triggered by the Adyar river overflowing onto the runway. Train services were disrupted as well due to water-logging of the tracks. Many residents, especially senior citizens, women, and children, were rescued by boats as their houses were inundated. This once again exposed the poor preparedness of the government, besides the city's poor infrastructure.

Greater Chennai Corporation officials said the city had received unprecedented rainfall. According to them, rainfall from Cyclone Michaung exceeded the total rainfall during the 2015 floods. From December 1 to 4, 2023, Chennai received 89 cm of rainfall, about 20 cm (or 29 percent) more than normal.

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