The Hindu Business Line : Collective raw material sourcing on Codissia task list

Coimbatore, June 19 The spiralling iron and steel scrap prices has set Coimbatore District Small Scale Industries Association (Codissia) on the task of educating its members on competitive raw material sourcing.

With all-round price surges witnessed in the commodities cycle and international scrap prices too going up, handling the raw material situation will prove a tough task for the small and medium enterprises.

One of the tasks before the new office-bearers of the Association is to educate its members on collective sourcing of raw material and convincing the buyers of their engineering goods on the inevitable increases in selling prices, said Mr K. Ilango, the newly elected Codissia President.

Import hurdles

Towards easing the raw material situation, Codissia is also seeking removal of hurdles in import of iron and steel scraps to help the small and tiny industries in the region collectively source them at competitive prices. One of the difficulties they currently face in accessing imported raw material is the insistence by the importers on bulk supplies.

According to Mr Ilango, such bulk imports are to be done only through either Chennai or Kochi ports because of the restrictions in scrap imports. The stipulation that only notified ports could handle imported scrap has prevented ICDs in Coimbatore from handling import or storage.

ship-breaking facility

The removal of restrictions and procedures would result in import up to about 15,000 tonnes of iron and steel scrap every month in the region, Mr Ilango said, adding that creation of a ship-breaking facility within Tamil Nadu, subject to compliance of environmental angles, would be appreciated by his association members.

The new Codissia team anticipate that some of the new legislations/Acts and controls being contemplated by the government will be challenging, and call for educating the small and tiny industries on the challenges at the implementation level.

While the goods and services tax, set to eventually take the place of VAT, would go to simplifying the tax procedures for the industry, Codissia members are apprehensive of other statutes such as the fringe benefit tax or the pollution control act that may increase the investment burden.

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