Hike in raw material prices hits pumpset, wet grinder units

Steep increase in prices of raw materials used by engineering units in the recent weeks has hit hard pumpset and wet grinder manufacturing units here.

According to K.V. Karthik, president of Southern India Engineering Manufacturers' Association, the manufacturers have increased the price of the end product (pumps) by 5 % and will have to increase more to sustain.

He explained that between April and September, the pumpset industry saw less than 10% decline in growth though there were no operations during April and May. The second quarter (July to September) saw good growth, especially for export orders. “The outlook for the industry was positive in the month of November,” he said.

However, the spurt in raw material prices last month has dashed the hopes of the pump manufacturers, according to Mr. Karthik. Copper prices are up from ₹450 a kg in March to ₹650 a kg now, stainless steel rods from ₹68 a kg in March to ₹80 a kg now and pig iron from ₹30,000 a tonne to ₹36,500 a tonne.

The cost of all materials, including packaging materials, has gone up by more than 10%. This has resulted in manufacturers increasing the prices of the end products.

Almost 30% of MSMEs will be forced to stop operations if the trend continues, he said.

“The association feels it is high time that the Central government intervened and stopped the sudden increase in the prices of raw materials. Ban on export of steel and iron ore can lead to lowering of steel and pig iron prices. The government should encourage export of finished value added products. This will help Indian Industries thrive,” he said.

The Coimbatore Wet grinder and Accessories Manufacturers' Association members plan to increase the price of wet grinders, though the dealers and suppliers should agree to it. The units buy raw materials according to demand. “We are seeing the prices go up for the last two months, especially steel, copper, and plastic. The units are also facing labour shortage and so wages are also up,” said R. Soundarakumar, president of the Association.

The Federation of Coimbatore Industrial Associations says the industry is just reviving after lockdown restrictions. The raw material prices are up 20% to 70% now, depending on the material. Manufacturing units that took annual orders have suffered heavy loss. The micro and small industries are affected largely. The government should have a mechanism to have fixed prices for a year, said J. James, convenor of the federation.

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Printable version | Jan 16, 2021 3:10:19 PM |

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