On road to recovery

Print edition : May 07, 2010

One of the halls at the CODISSIA complex, the venue of the upcoming World Classical Tamil Conference.-K. ANANTHAN

THE gloom that pervaded the textile units, foundries and engineering and automobile component units in Tamil Nadus Coimbatore district in 2009-10 has lifted, and there are signs aplenty of an economic revival. For instance, at Aquasub Engineering works at Thudiyalur, workers are busy transporting castings and coke in wheelbarrows or assembling a variety of domestic and irrigation pumps, including open-well submersibles, agricultural monoblocs, and pressure-boosting pumps.

At K.P.R. Mill Limited at Arasur, 20 kilometres from Coimbatore, hundreds of young women are operating machines that cut cloth and then stitching the cloth into garments and embroidering them with tasteful designs. The company is one of the largest in India that specialises in the production and export of knitted apparel.

At Kirtilals, which makes diamond jewellery, an employee scans a piece of gold to test its quality, while another is busy setting diamonds in a gold ornament.

At K.U. Sodalamuthu and Company Private Limited, workers man machines churning out paper cones around which textile yarn is wound and fibre drums or composite cans used for packing tea, chocolate drinks, potato wafers and panchamirtham and aravana prasadam of temples in Tamil Nadu and Kerala.

Out on the roads, workers are toiling in the sun to widen Tiruchi Road. The six-laning of Avinashi Road has been completed. A western bypass that will connect Mettupalayam Road with Palghat Road is coming up at a cost of Rs.284 crore. The Chengampalli-Walayar Road will be widened at a cost of Rs.700 crore. Underground electricity cabling is under way on Tiruchi Road, Kamaraj Road and Avinashi Road. State highways that lead to Coimbatore from Tiruppur, Perur and Marudamalai will be widened at a cost of Rs.60 crore. The Hope College bridge is finally being widened.

Employees of K.P.R. Mill Pvt. Ltd. moving around on roller skates. This helps them fix yarn breaks quickly and reduce machine breakdown time.-K. ANANTHAN

The city is gearing up to host the World Classical Tamil Conference from June 23 to 27, which will attract hundreds of Tamil enthusiasts and scholars. The conference venue will be the 40-acre trade fair complex of the Coimbatore District Small Industries Association (CODISSIA). The complex has five sprawling exhibition halls, four conference halls and a food court, all of which cover an area of 3.5 lakh square feet. The exhibition halls are pillar-free constructions.

K. Ilango, president of CODISSIA, said, On the whole, Coimbatore is witnessing one of the brightest phases in its economy in decades. Foundries, industries that fabricate automobile components, textile mills, units that make pumps and even job-work units are working to full capacity.

He was proud that Coimbatore was emerging as the industrial valve manufacturing capital of the country. These valves are used on oil and water pipelines. Several Italian companies have established units in Coimbatore to assemble these valves. Besides, Italian automobile components manufacturers were shifting their units to Coimbatore. While they had earlier sourced the basic castings for these components from Coimbatore, now they are making value-added sub-assemblies in the city. (Audco India Limited, Larsen & Toubros associate company, now produces industrial valves at its 300-acre manufacturing hub at Malumichampatti, near Coimbatore.)

Jayakumar Ramdass, president of the Southern Indian Engineering Manufacturers Association (SIEMA), was jubilant that overall, 2009-2010 has been a good year for Coimbatore although it [the upturn in the economy] has not reached the 2007 level. He was, however, confident that with all textile mills doing well, all industries doing well, we will exceed the 2007-level in 2010-2011.

Sales of agricultural drip irrigation systems soared in 2009-10. Their sales grew by 30 per cent in 2009-10, according to P. Sivaramakrishnan, vice-president (marketing), and B. Balakrishnan, director (operations), of Elgi Ultra Industries Limited. They attributed the burgeoning sales to farmers using the subsidies announced by the government for drip irrigation systems. Besides, we increased the area of our operations, said Sivaramakrishnan. Elgi Ultra Industries had earlier targeted coconut farmers but now also sells its systems to those who grow sugarcane, vegetables, guavas, bananas and horticultural crops. Sales of the Elgi groups industrial products such as transmission belts, extruded plastic hoses and cast films went up in this period. The companys industrial division grew by 20 per cent, according to the two senior officials.

Coimbatore is Indias leader in the manufacture of wet grinders and electric pumps, two sectors that escaped the mauling during the recession in 2008-2009. There has been a big boom in the sales of both domestic and agricultural pumps and tabletop wet grinders in 2009-2010.

An artisan sets diamonds in gold at a unit of Kirtilals in the city.-K. ANANTHAN

Last year [2009-10] was a good period for the pump industry, said V. Krishna Kumar, general manager (marketing), Aquasub Engineering, Coimbatore. The demand for agricultural pumps was so high that Coimbatores units were unable to meet it, he said. His company received the award for best productivity in the pump industry from the Japanese Institute of Productive Management. It also received, for the seventh time, an award for exports from the Indian Engineering Export Promotion Council of India. Aquasub is now into the niche market of making pressure-boosting pumps that will help in pumping water to high-rise apartments. This is a new segment. The market is picking up, Krishna Kumar said.

Coimbatore produced one out of every two pump sets made in India. Krishna Kumar attributed the market boom to three reasons: product quality, increase in farmers purchasing power, and drought in some parts of several States. Besides, more farmers had money to spend because of the increase in the procurement prices for cotton, wheat and paddy. So for the first time they went in for branded pumps instead of the locally made products they used to buy earlier. We are, therefore, unable to meet the demand, he said.

The recession has not hit the pump industry, agrees V. Lakshminarayanaswamy, managing director of the Suguna group. The group makes domestic and agricultural pumps, including submersibles, and a variety of pumps for industrial and other applications. The group has two foundries one for making casting for captive use in the manufacture of pumps and the other for automobile components. In our golden jubilee year, we will be modernising all our factories, said Lakshminarayanaswamy, whose group also runs a spinning mill.

Jayakumar Ramdass, who is also the managing director of Mahendra Submersible Pumps, attributed the demand for branded pumps to the value-added tax (VAT) system, which had reduced the price difference between locally made pumps and branded products to about eight per cent. His company has been the largest supplier of pumps for internal combustion engines for Honda, Greaves and Birla Yamaha for the past 25 years. The company did well in 2009-10, he said. He added: We have established new markets in Australia, Turkey, Vietnam, Egypt and countries in Africa for both domestic and agricultural pumps.

There is a burgeoning demand in the different segments of the textile industry as well. The demand for textile yarn in both the domestic and export market has gone up. In the last three to four months, the recovery has begun. Textiles are doing well, said P. Nataraj, the managing director of K.P.R. Mill. While the turnover in 2008-09 was Rs.750 crore, it was Rs.600 crore in the nine months from April to December 2009, said Nataraj. He expected a 40 per cent growth in our garment exports in future.

The technical textiles segment is a Rs.42,000-crore market. Of this, the medical textile segment accounts for about Rs.2,000 crore, says A. Shanmugavasan, managing director of the KOB Medical Textiles, a 100 per cent subsidiary of Karl Otto Braun GmbH & Company, Germany. The products include sanitary napkins, surgical dressings (Rs.600 crore each), sutures (Rs.450 crore), and diapers (Rs.300 crore). We are into speciality bandages that have various applications in treating sprains, varicose veins, sports injuries, burns and post-operative care, he said. These bandages are made at the companys factory at Palladam near Coimbatore and exported to several countries.

The outlook for consumer durables, which was negative a couple of years ago, has turned rosy now. Elgi Ultra Industries Sivaramakrishnan said the companys tabletop wet grinders Ultra Grind + Slimline, Ultra Pride + and UItra Perfect + have become a hit with housewives. We have a 35 per cent market share in the tabletop wet grinder segment and are its largest sellers in India, he said. The wet grinders made a few years ago were heavy and had to be kept on the floor. Elgi Ultra Industries introduced lightweight wet grinders that can be kept on the table. With additional attachments, the grinders can also be used to knead atta. Our chairman [L.G. Varadaraj] came up with the idea of tabletop wet grinders because the floor grinders were heavy, said Balakrishnan.

Industrialists pointed out that in 2007-08, there was excessive speculation and money flow, and prices reached proportions that were not sustainable. This was especially true in real estate, with the prices of apartments going far beyond the reach of even middle-class families. Then a slowdown hit the Indian economy in 2008-09. Industrialists attributed this to a scare in the minds of the people after the slump in the markets in the United States and Europe. But this situation has since passed.

Products of KOB Medical Textiles are exported to several countries. There is a Rs.2,000-crore market for medical textiles.-BY SPECIAL ARRANGEMENT

The sales of diamond jewellery items dipped in 2008-09 but started looking up from Akshaya Tritiya, which fell on May 16, 2009, said Kishore G. Paramasivan, chief operating officer of Kirtilals. There was a shift, with people buying diamond jewellery instead of gold ornaments, he added.

Mines to the market is the philosophy that drives Kirtilals. The Dimexon group, including its retail arm, Kirtilals, works end-to-end: from mining diamonds, to cutting, polishing, designing and marketing. Kirtilals has a big jewellery-making unit in Coimbatore. We are poised for big growth, said Paramasivan. The retailer has introduced a lounge concept, where it customised diamond jewellery as per the customers preferences.

Here, it is cheerful times for Sree Kumaran Thanga Maligai, too, which specialises in making gold, diamond and platinum jewellery and silverware. We are doing well because of our honesty, claimed P.K. Aroomugam, its managing director. We lay stress on quality, he added.

With women now preferring sleek jewellery over heavy pieces, Sree Kumarans stylish Tanuja collection, designed in-house, was a great hit with youngsters, said Aroomugam. They sell marriage sets comprising different kinds of jewellery.

Amid all this, Coimbatore faces plenty of problems that threaten to make its industries uncompetitive. The first and foremost is the power shortage. This has put an artificial cap on our ability to scale up production, said Ilango. (The Tamil Nadu government has slapped a 30 per cent power cut on high-tension industries in the State.) Big textile mills and units that make pumps cannot do with diesel generator sets. They need power from the grid. There is no plentiful supply of diesel any way. With only one government-run Industrial Training Institute (ITI) situated in Coimbatore and no stress on vocational education at the secondary school level, there is a debilitating shortage of skilled manpower. The cost of raw materials such as copper, coke, steel, pig iron and rubber used in the pump industry has also shot up. Industrialists fear that if the electricity shortage and the paucity of skilled labour continue Coimbatores industries will lose their orders in the long run.

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