Financial Daily from THE HINDU group of publications
Monday, Dec 15, 2003
Financial Daily from THE HINDU group of publications Monday, Dec 15, 2003 |
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Industry & Economy
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SSI Small foundries in Coimbatore to down shutters from today R.Y. Narayanan
Coimbatore , Dec. 14 UNABLE to bear the continuous rise in the price of raw materials, nearly 500 small and tiny foundry units here will stay closed from Monday affecting more than one lakh persons employed directly and indirectly. The foundries produce castings catering to a wide spectrum of engineering industries-textile machinery, pumps, auto-components etc. The Coimbatore Tiny and Small Foundry Owners' Association (CTSFOA), which is spearheading the stir, has sought the support of the Coimbatore Small Industries Association and the Southern India Engineering Manufacturers' Association and is awaiting their decision, according to Mr P. Udayakumar, Secretary, (CTSFOA). He said while the price of pig iron has spiralled to Rs 16,000 a tonne now from Rs 9,500 in January this year, a tonne of scrap now costs Rs 12,500 (Rs 7,500) and coke now costs Rs 14,600 a tonne (Rs 8,400). While the raw material cost has been going up at regular intervals, the foundry units were unable to pass on the price increase to their own customers in tandem with the increase in raw material cost. This has affected the economic viability of the foundry units and while some have already closed down, others were on the verge of closure. He said though the Tamil Nadu Chief Minister had expressed a desire that Coimbatore should become a hub for the foundry industry, the continuous spiral in the price of raw materials had threatened the very existence of the industry. He wanted the Central and State Governments to take the initiative in making pig iron available without any hitch at reasonable price. He wanted that those tiny and small foundry units, which could not avail themselves of Modvat benefits, should be exempted from excise duty for their raw material purchase. Mr Udayakumar said nearly 400 association members and about 100 from the outside have decided to close down the foundry units from Monday affecting directly and indirectly more than one-lakh workers.
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