The Hindu Business Line : Industrial recovery muted in Coimbatore region

Coimbatore, June 10 While the Index of Industrial Production (IIP) may indicate signs of recovery in some of the sectors, the ground reality in the Coimbatore region, home to one of the largest clusters of small scale industries in the country, shows that the recovery is still some distance away.

While the SSI units seem to have shaken off the lows of the second half of the last financial year, the recovery is muted and is not uniform across different SSI units catering to varied segments of the industry.

The export market is still in a limbo and the SSI units do not see any imminent recovery on this front.

Moreover, unless the power supply improves in Tamil Nadu, the SSI sector that heavily depends on electricity board’s power supply may continue to suffer from under-utilisation of capacity.

In an interview to Business Line, Mr Jayakumar Ramdass, President, the Southern India Engineering Manufacturers’ Association (SIEMA), Coimbatore, and Mr K Ilango, President, Coimbatore District Small Industries Association (Codissia), Coimbatore, said that while some improvement is noticeable among the industries in the region, it is not uniform across all sectors.

While pumps and agro-based sectors had grown by about 5 per cent, others such as auto components, foundry, textiles were not out of the woods.

The meltdown in the overseas markets have had a severe impact, with most of the companies reporting just 25 per cent of export turnover during 2008-09 compared to the previous fiscal.

Mr Ramdasssaid while textile and foundry units worked only at 50 per cent capacity due to power cut, agro-based industries worked at 80 per cent capacity.

Mr Ilango said the pump industry escaped the brunt of the slowdown and units that catered to sectors such as power also managed to ‘weather the storm’But textiles, textile machinery, textile spares and capital goods sectors are still in a limbo.

Auto component industry catering to two wheeler and car segments had improved substantially but those supplying components to commercial vehicles manufacturers are yet to see better times.

Awaiting Budget

The SIEMA President, said “every one is waiting for the Budget to be presented in July and then make the capital investment decision’.

The Codissia President felt that the entrepreneurs should ensure that their existing capacities were fully utilised before considering fresh investments.

Mr Ramdass estimated that more than 1 lakh workers were laid off in the region due to the economic slowdown and lower capacity utilisation.

Another worrisome aspect is whether Coimbatore will be able to recover the lost ground because of the continued power shortage.

Mr Ramdass said the 40 per cent power cut enforced by the State Government last year forced the companies sourcing auto components and foundry castings to shift their dies, moulds and patterns to other tier II cities.

Mr Ilango said shortage of labour, especially skilled ones, was becoming again a bottleneck in the recovery process as many of the migrant workers who returned to their native places had found alternative jobs

More Stories on : Economy | Interview | SSI | Tamil Nadu

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