Indian pump manufacturing industry in dire straits

LN Revathy Coimbatore | Updated on December 05, 2020


Steep increase in the price of raw materials has dashed the hopes of the manufacturers

The steep increase in the price of raw materials and other inputs has dashed the hopes of the Indian pump manufacturing industry from emerging stronger in the aftermath of the Covid outbreak when the world started to look at moving from China.

According to KV Karthik, President, The Southern India Engineering Manufacturers Association (SIEMA), “The outlook seemed positive with exports showing signs of growth in the immediate aftermath of the lockdown. The pump industry in India posted a negative growth of less than 10 per cent in the first half of the current fiscal (April-Oct) fuelled by growth in the second quarter (July-Oct).”

“The overseas demand was picking up coupled with enquiries from new markets and the going was good till November. The sudden spurt in raw material prices is posing a threat to the survival of the MSME units,” he explained.

Industry sources said that the cost of all materials including packaging materials had gone up by more than 10 per cent.

“The price of copper has shot up from ₹450/kg in March to more than ₹650/kg now, stainless steel price has moved to ₹80/kg from ₹68/kg in March, electrical steel to ₹63/kg from ₹52/kg eight months back and pig iron from ₹30,000/tonne to ₹36,500/tonne in November. This has resulted in an escalation in the manufacturing cost by over 15 per cent. Indian pumps are proving to be uncompetitive in the global market and the difference between Indian pumps and Chinese pumps are widening,” lament industry sources said.

The industry is apprehensive about losing its share of the global business.

SIEMA has urged the government to intervene and stop the sudden spurt in the price of raw materials. “Ban on export of steel and iron ore would help lower the price. The government should encourage export of value-added products and help the domestic industry thrive,” the SIEMA president stated.

Notwithstanding the threat on the export front, industry sources say that raw material like electric steel has started becoming scarce because of the import ban. MSMEs, besides being unable to source the raw material are also finding it difficult to run the unit.

Industry insiders aver that allocation by steel majors including SAIL is prioritised for traders than manufacturers.

“If the trend continues, close to 30 per cent of the MSME units would be forced to stop operations. This could lead to social unrest and economic loss,” said Karthik, highlighting the plight of the pump manufacturing units.

Published on December 05, 2020

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