Coimbatore small units hit by power and labour shortages

Lose job orders worth Rs 2,100 crore in the past three years.

Although small and medium enterprises (SMEs) and micro units in the engineering and textile town of Coimbatore are witnessing a good order flow, negative factors such as shortages of power and labour continue to affect production.

Micro units alone have said in the past three years they have lost job orders worth Rs 2,100 crore and over 3,000 units have shut down.

There are more than 50,000 SMEs and micro units in and around Coimbatore, which is known for its engineering activities — including automotive, textile machinery, pumps and other industries.

“We are witnessing a demand resurgence and orders have begun pouring in from both overseas and domestic buyers. However, shortages of power and labour have become a cause of concern,” said K Ilango, president of the Coimbatore District Small Industries Association (CODISSIA).

Orders are available for 100 per cent capacity utilisation, but due to the power crisis current capacity utilisation is only 70 per cent, he added.

J James, district president of the Tamil Nadu Association of Cottage and Micro Enterprises (TACT) said customers of micro units (heavy industries that give job orders to micro units) are facing a compulsory power cut of four hours in the evening and irregular power cuts during the day time, leading to production stoppages in their units.

“If they don’t run their units properly, we will not get our orders,” he added.

“Power cuts are a major deterrent for us. In the past three years micro units alone have lost job orders worth Rs 2,100 crore,” said James.

This also resulted in shutdown of over 3,000 micro units in the district, which had been operating one machine, with two or three employees. “They are now setting up grocery stores or working as drivers and mechanics,” he said.

The South Indian Engineering Manufacturers’ Association (SIEMA), Coimbatore, which has more than 300 members, 80 per cent of whom manufacture domestic and agricultural pumps, said Coimbatore and Ahmedabad are the two major centres in India for the manufacture of pumps.

Earlier, 50 per cent of the production came from Coimbatore. But the power cut had led to a sharp drop in production, due to a diversion of orders to Ahmedabad.

Coimbatore is also a major supplier of cylinder heads, aluminum die-castings, moulds, dashboard instruments, controls and door-locking mechanisms to automobile companies such as Maruti Suzuki, Hyundai Motors, Tata Motors, the TVS group and others.

The situation is aggravated by low voltage, which damages equipment. In the event of damage to the customer’s material, the unit that has undertaken the job order has to pay damages that are several times the value of the job order, said the representative of an engineering company.

“We cannot afford to run the units on diesel generator sets. Besides, there is a shortage of diesel, forcing industries to store it,” said James.

The other major issue is the shortage of manpower. Illango estimates that the engineering industry alone currently requires 10,000 skilled and 25,000 unskilled people. Many industrialists said the labour shortage posed a bigger problem and predicted that the solution lay in automation, which will be a costly solution for micro units.

James added customers were losing confidence in industrial units based in Coimbatore, since for much of the time their machines were idle due to the power cuts.