The Hindu Business Line : High production cost remains coir industry's bane

THE high cost of production in the coir sector has become a major impediment to the growth of the industry in the State, at a time when world over, the markets have turned into a buyers' market where price and quality are of paramount importance.

Therefore, the coir industry has to seek ways and means to cut down their costs, according Mr T.C. Manikandan Pillai of the Coir Board, who conducted a diagnostic study of the coir cluster in Kollam in Kerala, recently.

"These include reduction in unit cost of production through improved material management, fuller utilisation of capacity, modernisation and expansion of industry". In order to take advantage of modern techniques of production and economies of scale, the raw material should be purchased in bulk as the latter forms a major part of manufacturing expense, he said.

He said the industrial sector of Kerala as a whole was marked by very low levels of productivity, mainly due to the predominance of unorganised small-scale units and generally low levels of technology employed, even in the factory set-up. Since the traditional type of industries lack dynamism, one of the main tasks of coir sector is to modernise its production activities, he pointed out.

Majority of the coir workers are engaged in spinning work in household units itself. The spinning activities are conducted in open yards and prolonged adverse weather conditions affect production. During the monsoons, the extraction of fibre and spinning in the open yard is possible only for temporary durations.

Employment rate of the coir spinners is directly linked to the rate of demand in the product sector. Especially, in the case of products that are manufactured against specific export orders, there is a high rate of fluctuation and workers do not get assured employment throughout the year, he said.

Creation of regular employment can be made possible through modernisation of technology in spinning and product sectors; finding new user areas for coir such as coir-geo-textiles, pith composting, polymer composite board etc. and capturing the untapped export as well as domestic potential.

Mistrust among coir co-operative societies, he said, is found to be a major problem. The co-operatives were formed with a view to put the coir industry on a sound track and to protect the workers and entrepreneurs from exploitation by the middlemen.

A scheme for the development of coir industry on a co-operative basis was launched in the 1950s and its objective was mainly to solve the problems of the small producers and to ensure regularity of work and standard wages to the workers.

However, there are variations in the nature and methods of operations among the primary coir co-operatives in Kerala. While a few of them purchase green husk and arrange the retting and spinning operations through their members, the others began their operations by purchasing retted husk itself, which of course is not economical due to high transportation cost.

Also, some of the societies deal only in fibre. Given this situation, there is a need for formation of a horizontal network for making the procurement of raw materials economically viable and going in for market diversification, a co-operative official said.

On the other hand, low wages in Tamil Nadu, Karnataka and Andhra Pradesh, coupled with high productivity has affected the market of coir in Kerala.

The coir fibre manufactured in the State has become uncompetitive, he said. Add to this is the severe shortage of raw materials experienced here and the consequent rise in its price. Non-availability of fibre has left the traditional "ratts" idle for long. Specialisation in fibre production could by and large solve the raw material shortage problem.

The major elements of cost are high raw material cost, labour and overheads, and the labour cost at different stages of production process. The industry is highly labour-intensive and the total number of people engaged is around five lakh.

The spinning sector of the industry is by and large a cottage type, where wages are abnormally low. But, the manufacturing sector is comparatively organised and has a higher wage rate.