The government should intervene to stabilise the prices and ensure there is no shortage, MSMEs in Coimbatore say
Micro, Small and Medium-scale Enterprises (MSMEs) in Coimbatore are looking at measures to draw the government’s attention to increasing raw material prices.
“MSMEs are getting good orders. But we are unable to meet the orders because of the frequent increase in prices of raw materials. We have represented this to the government several times. Now, we are looking at ways of joining hands with MSME associations across the State and across the country too, so that we can represent jointly,” said an MSME unit owner here.
C. Sivakumar, president of Coimbatore and Tirupur District Micro and Cottage Entrepreneurs’ Association, said the price of copper was ₹493 a kg in January-February last year and rose to ₹730 a couple of days ago. On Tuesday, it was ₹750 a kg. In the case of mild steel, it was ₹49 a kg in January 2020, ₹65 in April this year and ₹67 on Tuesday. Aluminium cost ₹140 a kg a year ago and was ₹175 a kg on Tuesday.
“If we quote a price to a buyer based on that day’s raw material costs, we are unable to deliver at the same rate because the raw material price increases. Big companies are reducing job works to smaller units and are not agreeing to frequent revision in the prices they pay to the job working units. There are several micro and small units that buy raw materials from retail traders and do small components. They are unable to manage because the retail prices of raw materials are higher,” he said.
Prices used to go up in the past too. But it was neither so frequent nor so high. Many companies that imported small components from China are turning to Indian suppliers. So, there are enquiries across engineering sectors. But the MSMEs are unable to cater to the demand because of raw material prices. The government should intervene to stabilise the prices, Mr. Sivakumar said.
As many as seven industrial association heads met here on Monday and plan to have continuous meetings. They plan to join hands with industrial associations across the country and take up the issue at the national level to draw the attention of the government. It is not just price hikes, but also problems in raw material availability that are hitting the MSMEs hard.
The MSMEs have to bargain with multi-national companies and corporate companies to get a price revision for the components supplied. This situation has to be addressed and the government should take steps to control the prices, said another MSME unit owner here.