IN the midst of the upbeat mood permeating industry in Coimbatore, three issues threaten to disrupt assembly line production and affect the supply chain: power cuts, a shortage of skilled labour and the paucity of raw materials. The 30 per cent cut in power supply to industries in Tamil Nadu and peak-hour restrictions have ravaged production schedules so much that a flight of industries to Gujarat and other States seems a real possibility. Power cut is a major deterrent for us. In the long run, Coimbatore will lose its orders, said Jayakumar Ramdass, president, South Indian Engineering Manufacturers Association (SIEMA), Coimbatore. SIEMA has more than 300 members, 80 per cent of whom manufacture domestic and agricultural pumps.
Industries in Coimbatore manufacture cylinder heads, aluminium die-castings, moulds, dashboard instruments, controls and door-locking mechanisms for car-makers such as Maruti, Hyundai and Tata, and for the TVS group. Jayakumar Ramdass said: Owing to the power cut, the output from industries in Coimbatore has come down. But the companies which buy from them are impatient. These companies give copies of dies to us, and we make the dies for them. They may now give the dies to industries in Gujarat. The biggest tragedy will be that once these dies go out of Coimbatore, industrialists in Gujarat will ensure that they do not lose their market.
The situation is aggravated by low voltage, which damages equipment. The power cuts pose a threat to the existence of a few thousand tiny and small units in Coimbatore. They cannot afford to run their units on diesel generator sets. Besides, there is a shortage of diesel, forcing industries to store it.
K.S. Balamurugan, managing director, K.U. Sodalamuthu and Company Private Limited, said these units were vendors for big units, and they were unable to meet the production schedule stipulated by the big companies. So the supply chain is getting affected, said Balamurugan. He blamed Tamil Nadus lack of vision in the electricity sector for the present crisis and said: Here, only ad hoc measures are adopted. There should be long-term planning for generation of power.
Several owners of tiny and small units said they were in a bind. Their inability to install diesel generators because of their high cost led to loss of production. Even if they installed them, the expenses involved in operating them would push up the manufacturing cost of their products, they argued.
The power cut has hit Coimbatores pump manufacturers hard because it is in summer when the water table drops that the demand for pumps peaks. V. Krishna Kumar, a former president of the Indian Pump Manufacturers Association, Mumbai, said, The demand for domestic and agricultural pumps is at its maximum during summer, but we are not able to meet it. April to July is the peak cultivating season for basmati rice in Punjab, and farmers use water from borewells for irrigation. All submersible pump manufacturers do their best business in Punjab in these four months. But the power cut has spoiled the plans of Coimbatore-based manufacturers to strike it rich. They have not been able to install diesel generators either because foundries require high-tension power. We need electricity supplied by the State Electricity Board, he said. The arbitrary changes in the timings of the power cut affect schedules.
Coimbatore and Ahmedabad are the two major centres in India for the manufacture of pumps, with 50 per cent of the production coming from Coimbatore. But the power cut has led to a sharp drop in production. We are not able to compete with Ahmedabad in sales, said Krishna Kumar.
The power cut has also affected big players such as K.P.R. Mill Limited because it has been forced to buy electricity from Tata Power. During the recession, K.P.R. Mill survived because it is a large, composite mill with spinning, weaving and dyeing units and garment-manufacturing mills. P. Nataraj, the mills managing director, explained that when the bottom line was negative [with K.P.R. Mill producing at 60 per cent of its capacity during the recession in 2008-09], it survived because it was a vertically integrated mill. When the State government brought in a new policy of allowing industries to buy power from private players and also eased the power cut from 40 per cent to 20 per cent from last November, K.P.R. Mill stepped up its capacity utilisation to 90 per cent. Unfortunately, the 20 per cent power cut has been increased to 30 per cent from March 28. Since we are buying power from a third party, we have to calculate that extra cost into production, Nataraj said.
Shortage of manpower is another problem that has bedevilled the industries of Coimbatore for the past several years. People dont want to work on the shop floor. We are facing a shortage of even unskilled labour, said Balamurugan. Many industrialists said the labour shortage posed a bigger problem than even the electricity cut and predicted that the solution lay in automation.
In their assessment, shortage of skilled personnel was the fallout of the government not establishing enough Industrial Training Institutes (ITIs) in the State. Vocational education had received short shrift at the Plus Two level. So industries were forced to hire unskilled people and train them, which cost the industries money. Coimbatore only has one government-run ITI and a few private ITIs. In the long term, Coimbatores manufacturing capability will come down if we dont get the right people to do the work. The government should set up at least 10 ITIs in the State, Jayakumar Ramdass said.
The shortage of skilled personnel is so acute that campus recruitment is taking place in polytechnics and ITIs. A pump manufacturer admitted that his company had rounded up many students who had passed the Plus Two examinations and trained them as machine operators. The company was getting a hostel ready so that it could offer them accommodation, which would help retain them.
The increase in the price of raw materials such as textile yarn, steel, copper, pig iron and coke is another area of concern. A. Sakthivel, president of the Tirupur Exporters Association, said recently that the mills had increased the yarn prices abnormally in an unexpected manner during the last four months (The Hindu, Coimbatore edition, March 30). The price of steel had shot up by Rs.6,000 a tonne and that of pig iron by Rs.5,000 a tonne. The price of copper, coke and rubber had increased. Despite all these odds, the Coimbatore industrialists are carrying on gamely
One of the main hurdles to the growth of industries in Coimbatore is its poor connectivity with ports of Kochi, Tuticorin and Chennai, say city industrialists. It does not have an international airport either. We have been fighting these odds and we have overcome the hurdles by our hard work, said K.S. Balamurugan. His company, K.U. Sodalamuthu and Co. Pvt. Ltd., manufactures machinery for production of paper cones, paper tubes, fibre drums, composite cans, and edge protectors under the brand name Sodaltech. All our products are recyclable because they are made of paper, said K.S. Viswanathan, director of the company. It exports machinery to Mexico, Nigeria, Egypt, Thailand, Turkey, South Africa, Iran, Libya, Russia and Bulgaria.
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