Rising city

Print edition : July 01, 2011

The arterial Avinashi Road in Coimbatore. - K. ANANTHAN

Education, health care and IT are the new areas propelling growth in Coimbatore, famous for its textile and engineering units.

THESE are the best of times and the worst of times for Coimbatore, Tamil Nadu's premier textile and industrial city and an emerging hub for education and medical care. The city got a makeover when it hosted the five-day World Classical Tamil Conference in June 2010, but its textile and agricultural sectors are going through a crisis.

The city is also a favoured destination for information technology companies, several of whom are already there. A TIDEL Park, similar to the one in Chennai, is under construction on Avinashi Road.

In the area of medical care, it has several professionally run hospitals such as the Kovai Medical Centre and Hospital, the GEM Hospital and Research Centre, the Aravind Eye Hospital, the PSG Institute of Medical Sciences and Research, and the KG Hospital and Postgraduate Medical Institute. They get patients from Kerala, West Bengal and even the Gulf countries.

If Coimbatore hardly had any good hotels until a couple of years ago, its hospitality industry is booming now. Several new hotels have come up, including Le Meridien, Jenneys Residency, Park Plaza, and Residency. Among the new hotels coming up are those from Aloft and Taj and one from the Pricol group. Occupancy is high in Le Meridien and Jenney's Residency, thanks to business conferences and product launches and tourists who take a break on their way to Udhagamandalam and Kochi.

A. Sennimalai, Managing Director, Le Royal Meridien, Chennai, said: Coimbatore has the potential for good hotel business because it is a big industrial centre be it in textiles, engineering products, home appliances and, now, IT. His optimism also stems from the city's strategic location as a gateway to the hill stations of Udhagamandalam and Coonoor.

Vincent Adaikalraj, executive director, LA Group, which owns Jenney's Residency on Avinashi Road and Black Thunder water theme park in Mettupalayam, said: Coimbatore's air connectivity is really good now, with daily flights to Chennai, Mumbai, New Delhi, Bangalore and Hyderabad. If the airport's expansion takes place, Coimbatore will really develop.

All this glitter, however, cannot mask the crisis afflicting the textile and agricultural sectors in Coimbatore and neighbouring Tiruppur and Karur.

Submersible pumps manufactured at a unit of Aquasub Engineering and Aquapump Industries at Thudialur near Coimbatore.-S. SIVASARAVANAN

The textile industry is in a deep crisis, said D. Balasundaram, Chairman, Chamber Economic Forum, Indian Chamber of Commerce and Industry, Coimbatore. The price of cotton/yarn has fluctuated wildly in the past one year and this has hit the mills hard. The Union government banned the export of cotton but reversed its decision later. In February, when the price of cotton normally ruled low, it shot up to Rs.75,000 a candy (358 kg) from Rs.35,000 because of the flawed policy of the Union Textile Ministry. After traders bought the cotton at the hefty price of Rs.70,000 a candy, the price fell to Rs.40,000. Besides, the Union government periodically stopped the export of yarn. So India ceased to be a reliable supplier of yarn. All these decisions had a big impact on the textile industry, said Balasundaram.

There is an unusual midterm crisis now, with six months of textile stocks piling up. So traders are not buying yarn, textiles and readymade garments. This has forced the mills to cut down production.

The agriculture sector in Coimbatore and the neighbouring districts of Salem, Erode and Namakkal have been hit hard owing to the shortage of farm labour. Landowners blame the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) for weaning away farm labourers.

The dyeing industry in Tiruppur district, about 40 km away, has shut down. The Madras High Court, on January 28, 2011, ordered the closure of all dyeing/bleaching units and common effluent treatment plants (CETPs) in Tiruppur unless they achieved zero liquid discharge as per the court's directions of 2006.

When 734 dyeing units and 20 CETPs in Tiruppur district closed in the end of January, 30,000 men lost their jobs. This was a major issue during the recent elections to the State Assembly, and the Dravida Munnetra Kazhagam (DMK) government's seeming insensitivity to the issue led to its rout in Tiruppur, Coimbatore and Salem districts.

One of the first initiatives of the All India Anna Dravida Munnetra Kazhagam (AIADMK) government after it assumed office in May was to discuss ways and means to open the dyeing units.

The closure had a chain effect on associated units such as knitting mills, suppliers of chemicals and dyes, and tailoring and embroidery units. Without the dyeing units, nobody will buy cotton. There will be no jobs in knitting, tailoring and hosiery units, said R. Annadurai, coordinator of the Tiruppur Industrial Protection Committee.

The 30 per cent power cut for high-tension industries plus the load-shedding for a minimum of three hours a day has ravaged thousands of industries in Coimbatore district. Micro and small industries are the hardest hit because they cannot afford diesel generators.

Balasundaram said: The power cut is a daily reminder of the government's failure to tackle the problem. The farther you are from a city, the longer the power cut. He himself had erected a foundry for making castings required in the petroleum industry. When the plant went into production, electricity was not available. I have incurred huge losses, Balasundaram said.

Uninterrupted electricity supply is essential for foundries making castings and forgings, said V. Krishnakumar, general manager (marketing), Aquasub Engineering and Aquapump Industries, which specialises in making a variety of pumps and motors for agricultural and domestic use. If electricity supply is cut off when the metal is being melted at a particular temperature, the molten metal will solidify and will not have the right quality, Krishnakumar explained. A foundry cannot be run on a diesel generator, he added.

M. Kandhaswami, president of the Coimbatore District Small Industries Association (CODISSIA), said the power cut was a perennial problem in Tamil Nadu. The government does not permit us to put up windmills because the grid capacity is not there, he said.

According to a monograph published by the Chamber Economic Forum, high-tension industries have been put on a 30 per cent power-cut schedule and have to limit power consumption during the peak hours to lighting alone. Thus, for about seven hours a day, they cannot consume power. In addition, during the remaining 17 hours, they must work with a reduced demand of 70 per cent.

Though low-tension consumers have no power cut, their working hours have been reduced by the peak-hour restriction. In practice, the shutdowns are for a longer period of time than specified. In addition, unannounced power shutdowns are made. Effectively, only less than 50 per cent power is available. Due to scheduled and unscheduled interruptions, industries lose more than 50 per cent of their production, states the monograph.

Shortage of manpower

Industries in the district face a severe shortage of skilled and unskilled manpower. Industrialists blame the much-vaunted MGNREGS for this situation. Besides, the only Industrial Training Institute (ITI) in the district cannot meet the demand for skilled manpower.

The MGNREGS, which offered Rs.119 a day, had lured rural labour away from factories, said Kandhaswami. They preferred the work under the NREGS for just 100 days a year although the industries were ready to offer them work round the year and higher wages. Coimbatore's foundries now get labourers from Orissa, Bihar, Jharkhand and Chhattisgarh.

D. Gandhikumar, Chairman, Industrial Trade Fair (INTEC), Coimbatore, organised by CODISSIA every year in its trade fair complex, said the manpower emerging from the ITIs could hardly meet the requirements of Coimbatore. This has led to a mismatch in the demand and supply of skilled manpower.

Globalisation had led to a big improvement in the quality of industrial processes and products and there was automation everywhere. But the syllabi in the ITIs have not been upgraded to match these developments, said Gandhikumar.

According to Kandhaswami, Coimbatore needs around 30,000 skilled personnel every year. To make skilled manpower available to industries, CODISSIA had proposed to the government that it could train school dropouts for a year in various trades. The State government and CODISSIA could give them a stipend during the period and a certificate at the end of it to help them find employment anywhere.

The sharp increase in the prices of raw materials such as aluminium, steel and iron has affected the foundries. The price of steel went up from Rs.38,000 a tonne in December 2010 to Rs.49,000 a tonne in January 2011. In this situation, industries, particularly the small- and medium-sized ones, were forced to increase the prices of their products.

Banks gave short shrift to micro and small enterprises in the matter of loan disbursal. Timely finance is what we need. Only 5 per cent of micro and small enterprises are able to get bank finances, Gandhikumar said.

Only 60 per cent of the money they needed came as loan from nationalised banks; the rest of the amount was obtained as unsecured loans from financiers.

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