Micro units in Coimbatore face closure threat

For the micro and cottage industries in Coimbatore, especially those in the engineering sector, face several challenges that threaten their survival.

Nearly 10% of the micro units in Coimbatore district, mainly those that took up job works for larger industries, have gone out of business in the last one year, says J. James, president of the Tamil Nadu Association of Cottage and Tiny Enterprises.

The larger units are investing in automation to be cost competitive and are reducing job orders. So, the micro units that do job work are not getting orders. Even if there are orders, the industries face labour shortage, he says. There is absolutely no government support for the micro sector. The units that went out of business will not return to this sector, he adds.

According to C. Sivakumar, president of the Coimbatore Tiruppur District Cottage and Micro Entrepreneurs Association, industries located in the fringe areas of Coimbatore city and supply to new sectors such as valves, gear boxes, etc are doing well. Micro units that were supplying to the pumpset sector are the worst hit. High cost of raw materials and power are the major factors hitting the micro units. The cost of raw materials are higher in Coimbatore by at least ₹5 a kg compared with those in Gujarat. Power cost in Tamil Nadu is on the rise and the wages for an operator is ₹1000 for an eight hour shift here. It is close to 50% higher than Gujarat. Hence, engineering industries in Coimbatore are struggling to compete with those in the northern States. This, in turn, has hit the micro and cottage enterprises, he added.