For the last two years, slowdown in demand, high raw material costs, and lack of prices for the products have resulted in financial stress for micro and cottage industries in Coimbatore, pushing many units to the brink of closure.
C. Sivakumar, president of Coimbatore and Tirupur District Micro and Cottage Entrepreneurs Association (COTMA), said at least 10% to 15% of the micro units were in distress. Many industries that had borrowed from banks were going for negotiations, trying to reschedule repayment periods. The smaller foundries were struggling to compete with those in the northern and western States in terms of price. Even bigger industries in Coimbatore were sourcing castings from these foundries now, he said.
The market continued to have ups and downs and there was no improvement in orders for micro units in any industrial sector in Coimbatore. The raw material prices had stabilised, but not reduced, he said.
According to J. James, president of Tamil Nadu Association of Cottage and Tiny Enterprises (TACT), more than two dozen units have moved out of business due to lack of orders and financial stress.
“There is no data with anyone on how many units have become non performing assets. But, many are shutting down operations,” he said. The main reason in financial stress. The units are unable to repay loans.
Mr. Sivakumar added that units that had taken loans from private financial institutions were affected more because there was hardly any scope for negotiation.
The TACT plans to submit a memorandum to District Collector Kranthi Kumar Pati on Monday, November 20, demanding protection for micro units so that they get time to repay loans.
Published - November 19, 2023 09:35 pm IST
