Rising Raw Material Prices Hurting Tn Smes

The Coimbatore District Small Industries Association (CODISSIA) has expressed deep

concern over the steep hike in prices of chief inputs that is posing a threat to the sustenance and competitiveness of small-scale manufacturing units in Tamil Nadu (TN).

Key raw materials such as iron and steel as well as other by-products have registered a sharp increase in prices in the recent past, with prices soaring by nearly Rs 3,000 a tonne since January. This, in turn, has pushed up the production costs for SME manufacturing units in the state, thereby making it difficult for them to meet their raw material requirement, said K Ilango, president of CODISSIA.

Sudden spurt in raw material prices has put the small-scale manufacturing firms in turmoil as they are unable to negotiate the price change with their traders as well as customers once they have already entered into an agreement.

Micro and small industrial units that used to enjoy prominence in both domestic and global markets due to their supplies of low-cost products are now facing the danger of losing their price-competitiveness and subsequently their price-sensitive customers, said BK Bang, proprietor of Mamta Enterprises, a small-sized pump equipment manufacturer in Coimbatore.

TN SMEs have little option but to purchase inputs from local traders to cater to market demand as the stock of these raw materials are not readily available in the market due to lack of regulation on spiralling prices.

by: David Parks

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