New Raw Material Bank

A raw material bank (RMB) has been set up by the Coimbatore Industrial Infrastructural Association (COINDIA) on an acre at Chinnavedampatti in Coimbatore to help tiny and small units get raw material almost at cost price. The initiative has been made following the hardships faced by tiny and small entrepreneurs due to raw material price instability and continued pressure from original equipment manufacturers for price reduction. This leaves them little time to focus on product development and marketing.

“The objective of RMB is to get the best prices from suppliers,” said Southern India Engineering and Manufacturers’ Association president Jayakumar Ramdass. He said it was located at a strategic place and the weigh bridge will be an added advantage. Even before its formal launch, in the last 20 days this bank has distributed 600 tonnes of pig iron and 200-plus tonnes of metallurgical coke. “We want to reduce the cost of materials for major users like foundry industries, pumpset industries and general engineering industries by at least 3%-5%, said COINDIA president G Rajendran.

In the first phase, it will cover pig iron, stainless steel rods, EN8/Malleable Steel (MS) rods, enamel copper wire, metallurgical coke for foundries and ferro silicon. “In the second phase, we would make bulk purchase of MS scrap and cast iron scrap,” Rajendran said. He added that they would also look at importing scraps. The RMB project has Rs 5 crore as working capital contributed by all the associations with part funding by financial institutions. COINDIA has spent Rs 36 lakh to set up this facility. According to Rajendran, RMB can be utilised only by COINDIA members. COINDIA has 550 direct and 2,000 indirect members.

It is estimated that 600 foundry units including captive foundries and 600 pumpset manufacturers will require a minimum of 10,000 tonnes of pig iron, 1,000 tonnes of SS rods, 300 tonne SS Sheets, 500 MT of MS sheets, 250 tonne of enamel copper wire and Rs 2-3 lakhs of ball bearings per month. It will be managed by COINDIA with the help of a technical and purchase committee. “We will access the demand on a monthly basis and then place our orders with the suppliers. The tiny and small industries can take the materials from RMB,” said Rajendran.

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