LPG crunch, cost spike and worker exodus push Belagavi’s Udyambag units to brink

Pic: A foundry industry in Udyambag Industrial Estate of BelagaviBelagavi: Industries in Belagavi's Udyambag Industrial Estate are staring at a deepening crisis, hit by an acute shortage of LPG cylinders, sharp escalation in raw material prices and a steady exodus of migrant workers. The combined pressures have forced several manufacturing units to scale down operations, fuelling fears of partial or complete shutdowns.Gas shortage hits production linesIndustrialists said irregular LPG supply has severely disrupted operations, especially in gas-dependent sectors such as powder coating and metal processing. Many units that rely entirely on LPG have been compelled to halt sections of their production lines intermittently, reducing output and delaying order execution. This, manufacturers said, has affected client confidence and strained cash flows.Raw material prices squeeze marginsThe situation has been aggravated by a steep rise in input costs. Prices of steel and allied raw materials have climbed sharply over the past year, significantly increasing production expenses. "Raw material prices have gone up by 10% to 30% in a year, making it financially unviable to operate at full capacity," said Prabhakar Nagarmunnoli, president of the Belgaum Chamber of Commerce and Industries (BCCI). Several units, he added, have suspended operations in select departments to minimise losses.Migrant worker exodus worsens slowdownCompounding the crisis is a growing labour shortage as migrant workers return to their home states. Of the nearly 10,000 workers employed in Udyambag, a large number—mainly from Uttar Pradesh and Bihar—are leaving amid job uncertainty, fewer working days and rising living costs. The manpower crunch has further slowed industrial activity.Cost-cutting measures, falling turnoverMany factories have cut production from three shifts to two, while others have sharply reduced output due to workforce constraints. The slowdown has led to declining turnover across units, tightening financial pressure on small and medium enterprises.Nagarmunnoli said global instability and supply chain disruptions had intensified the challenges. "The spike in steel and other input costs, coupled with LPG shortages, has put enormous pressure on manufacturers," he said.The BCCI has written to the state and central governments seeking immediate intervention. Industry representatives have urged authorities to ensure uninterrupted LPG supply, stabilise raw material prices and announce relief measures to sustain operations. "Without timely support, the situation in Udyambag could worsen further," Nagarmunnoli cautioned.