Coimbatore District Small Industries Association (CODISSIA) has expressed concern over the steep hike in prices of raw materials that has led to negative impact on engineering industries.
In a press statement, CODISSIA president R. Ramamurthy and M. V. Ramesh Babu, Vice President stated that they met Chaudhary Birender Singh, Union Minister for Steel and Giriraj Singh, Union Minister of State (Independent Charge) MSME, Arun Kumar Panda, Secretary-MSME, Ministry of Micro, Small and Medium Enterprises and Binoy Kumar, Secretary-Steel, Ministry of Steel in New Delhi and submitted a memorandum seeking steps to reintroduce the system of allocation of raw materials to MSMEs at subsidised price as was done earlier, via SAIL, VIZAG, NSIC, SIDCO and other nodal state government distribution systems.
Stating that the growth of MSME sector is hindered by various factors in Finance, Marketing, Technology, Infrastructure, lack of skilled manpower and Government Policies, they said that with the prices of raw material spiralling high, MSMEs are faced with severe cash crunch, resulting in erosion of working capital to most of them.
The trend of raw material prices going up started in October 2017 and is going on, unabated till now. Hike in prices of Steel and other allied Foundry items like Coke, Pig Iron, Scrap, CI Boring, HR Sheet, CR Sheet, Copper and Aluminium, compared to July 2017 to March 2018 is between 30% and 35%.
Thousands of Small and Medium industries engaged in manufacturing activities using steel and allied raw materials, are badly affected, by not being able to keep up their commitments or to secure fresh orders for manufacture and supply.
It is learnt from the steel manufacturing sector that it would take few more months to stabilize and the prices are likely to go up until such time. This can be physically verified with the defunct sale yard of SAIL which remains non-functional for the past two years, which is directly impacting the MSMEs in Coimbatore.
If this continues, it is very imminent that industries will face huge recession, leading to joblessness and closure of units, impacting the socio-economic status of our nation.
Hence, CODISSIA seeks SAIL to open their sale yard immediately at Coimbatore to tide over the crisis of shortage of raw materials and also called upon the Central and State Governments to intervene on a war footing, to save the MSME sector by allowing import of metals and minerals and ease out the shortage.
CODISSIA Seeks Raw Materials At Subsidised Rates to MSMEs
