Foundries and engineering industries in worry

Foundries and engineering industries in Coimbatore are faced with a serious dent to their fortunes due to the spiralling prices of raw material and other input costs.Coimbatore, once known as the 'Manchester of South India', is the second largest city of Tamil Nadu and contributes considerably in the country's sixth position internationally in manufacturing cast iron products.Reportedly, around 4500 foundries here produce five million tonnes of cast iron products annually worth around Rs. 24,000 crores. The constant price hike in the input materials has amplified the manufacturing cost of cast iron by 20 per cent in the last two years. Consequently, the iron industry has hinted at a 13 percent rise in the selling prices of their products which the end users are sure to object. According to Muthuswami, the President of the Coimbatore District Small Industries Association, these trends may reflect negatively in the industry's overall annual performance.

"In today's scenario, around 7,000 iron industries are there in South India and out of the total, 5,000 are there in Coimbatore, which are involved in the production of pumps, motors and other manufacturing products. The price revision in cast iron and other raw material leads to an increase of nine to ten per cent in selling prices. Our customers insist over a five per cent price reduction of price annually. They say that the products which they are getting from China and other countries are cheaper then our products. Thus the small industry is facing a price problem," said Muthusami.A scarcity of pig iron and the incessant rise in the price of pig iron and metallurgical coke has shaken the industrial units here which are also known as Kovai. This has seriously affected both the domestic and export markets of light engineering goods. Reportedly, the problem has been provoked by the rise in the price of imported low ash metallurgical Chinese coke. A solution to these problems is possible says Shanmuga Sundaram, President of South India Engineering Manufactures Association (SEMA).

In his view, the Government should scrap the exiting five percent custom duty on copper to zero and the tariffs on other raw materials too should be relaxed so as to save the South Indian industry from worse days ahead. "There is no margin for us because of raw material prices. If it continues for some more time, the industry is going to doldrums. In the last budget also we sent a memorandum to the Finance Minister requesting abolition of import duty of copper and he has reduced it to five per cent from seven per cent. But still the copper sale has reduced from 2005 levels. So we are requesting the government again and again to reduce the import duty to nil," said Sundaram.Citing the Government's intention to promote the use of steel among Indians considerably by increasing its per capita consumption from 29 kilograms per annum to levels closer in the developed countries which is in the range of 400 kilograms, Sundaram said that these objectives seem to falling short of desired results.

Related Posts by Categories

Business News

• Coimbatore identified for lean manufacturing programme
• Industrial estates for smaller units sought
• BEML opens its Vendor Dev Office !!
• L & T Opens its casting unit !!
• Kannan Departmental Stores on expansion
• Chamber seeks removal of duty for fibre imports
• Tata launches Photon Plus in Coimbatore
• LMW sees increase in capacity utilisation
• Premier mills fory into luxary bed market
• India tops in BPO list !
• Ramco organises programme to explain its products
• Skill development programme
• L&T bags hospital building order at cbe !
• NEPC sets up a SEZ at Palladam !!
• Top Pricol official injured in an Attack
• Swiss delegation explores business opportunities
• Move to derecognise Coimbatore Stock Exchange stayed by HC
• ‘Made in Coimbatore’ expo in Mangalore
• Dresser establishes EOU in Coimbatore
• UNIDO launching new cluster programme !
• Powerloom strike continues.....
• Pump set price may go up !!
• Japanese delegation explores opportunities in semiconductor sector
• Duty Free Shop Inaugurated At Coimbatore Airport
• U.S Consulate Consul General @ Coimbatore