Coimbatore's Protest Against Raw Material Price Hike

Representatives of industry associations taking out a rally in the city on Saturday, to protest against the steep rise in iron and steel prices Nearly 5,000 small and medium-scale entrepreneurs took out a rally here on Saturday demanding control of steel and pig iron prices and measures to have a stable price for at least two years.

Coimbatore has about 40,000 registered small-scale units and almost an equal number of unregistered ones.

As many as 16 industrial associations of Coimbatore related to the engineering sector organised the rally. Representatives of the associations submitted a memorandum to the District Collector. And, they planned to send their memorandum to the Central Government too. Coimbatore has about 40,000 registered small-scale units and almost an equal number of unregistered ones. Most of them supply components or undertake orders for larger units. They have annual rate contract with the larger units for this.

According to C. Muthusami, president of the Coimbatore District Small Industries Association, because of the contract the smaller units are unable to negotiate higher price for the products. However, the raw material prices (steel and pig iron) have gone up by 70 per cent during the last one year and nearly 35 per cent of the jump came in the last three months. He points out that the price of construction steel, which was Rs. 31,600 a tonne in April 2007, shot up to Rs. 49,000 a tonne in March this year. Similarly, pig iron, which cost Rs. 22,000 a tonne in April last year skyrocketed to Rs. 31,500 in March 2008.

Mr. Muthusami said that the casting price was Rs. 36 a kg in January and now it was quoted at Rs. 55 a kg. The foundries attributed the escalating pig iron prices as the reason for such a development. This is leading to slow down in production and loss of jobs and common man is facing increasing inflation trends. The Government should intervene before the situation went out of control. The associations would meet again in 10 days to decide their further course of action if the Government were to fail to take any step to control the prices, Mr. Muthusami said.

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