Cyclone Michaung Impact: MSME sector may have suffered losses greater than ₹3,000 crore

Even as Chennai picks up the pieces in the aftermath of Cyclone Michaung, fragmented reports and initial estimates from the MSME sector across four districts has pegged cyclone-related losses at MSMEs at a minimum of ₹3,000 crore.

A preliminary impact assessment carried out by the Tamil Nadu Government has said that 4,800 MSME units across 24 industrial estates have been impacted by Cyclone Michaung, of which 2,100 in Chennai, Chengalpattu, Tiruvallur and Kanchipuram were the worst affected.

Among the affected industrial zones are industrial enclaves like the Ambattur Industrial Estate, Perungudi Industrial Area, the Tamil Nadu Small Industries Development Corporation (TANSIDCO)'s industrial enclave in Vichur and the industrial zone in Villivakkam. However, a conclusive loss figure at MSME units, many of which comprise auto-ancillary units, is yet to be arrived at.

"At least ₹3,000 crore in losses may have been incurred at just six industrial estates," said a government official, adding that this was a conservative estimate at best.

CNBC-TV18 understands that the Ambattur Industrial Estate, known to be the backbone of Chennai's auto ancillary and MSME sector may have suffered losses totaling to ₹2,000 crore, while industrial estates in Perungudi and Vichur may have suffered losses of ₹400 crore and ₹160 crore, respectively. "The loss figures may go up as damage assessment continues, and insurance surveys complete in the next few days," the official added.

In the immediate aftermath of Cyclone Michaung, a number of larger plants stayed shut for a day or two on account of widespread flooding either at premises or in surrounding areas. Automobile majors like Hyundai Motor India (HMIL) and Daimler India Commercial Vehicles (DICV) suspended operations for a day, before resuming production.

Manufacturing activity at iPhone plants like Foxconn and Pegatron also saw suspension before operations resumed in a day. IT parks and Chennai's handful of global capability centres have also resumed operations after a two-day break. An overall estimate of damages to Tamil Nadu's industries and MSMEs is yet to be ascertained.