Recovery Far From Sight for Coimbatore SMEs

The SME segment in Coimbatore was hoping for an economic recovery in the region post improvement in the Index of Industrial Production (IIP) numbers. However, their hopes have been belied by the inconsistent growth figures of different SSI units in the district. While the IIP has shown some improvement, growth of the SME sector has remained subdued reflecting the industrial recovery trend in the region.

Though the SME segment in the Coimbatore district has managed to deal with the adverse economic climate, it has been difficult for small players to sustain a consistent growth level. Moreover, growth has not been uniform across SSI units pertaining to varied industry verticals.

Not yet out of the woods

While some industries in Coimbatore like pumps and agro-based sectors have witnessed a 5% growth, other prominent industrial segments have not seen much improvement during the current financial year.

Auto components, Textiles Manufacturers, textile machinery, capital goods, foundry, export and SSI sectors are still facing increasing obstacles as the global market condition continues to worsen.

"A weak global demand, negative trading sentiment and absence of adequate government assistance are making it difficult for small industrial units to achieve desired growth results," commented C Laddha, executive spokesperson, Marble Kingdom, a Chennai-based mid-sized marble exporting unit with a warehouse in Coimbatore.

Besides recessionary pressures, the persistent problem of power shortage in the region has added to the woes of SMEs. The crippling power cuts have hampered the production flow and led to under-utilisation of capacity, thereby squeezing the margins of small enterprises. That apart, shortage of skilled labour is also hurting the SSIs in the region.

"The inadequate power supply is forcing small units to work at nearly half of their production capacities. While this has compelled some units to shut shop temporarily, others are shifting their base to maintain their production level," said S Kumar, an executive working at MB Textiles in Coimbatore.

The SME segment is now banking on the upcoming budget to get some fiscal incentives and tax relief. However, with the export sector still in doldrums and the market scenario looking far from encouraging, the SSI segment in the Coimbatore district will have to tread with caution.

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David Parks is a well known author and has written articles on Toys Manufacturers, B2B Portal, Business Trade Leads, suppliers, Manufactures and many other subjects.