Manufacturing takes a hit, IT sector grows in Coimbatore in 2022

With 2022 coming to an end, manufacturing industries in Coimbatore district wait to move to a new year after seeing a dip in business for almost 12 months. For the IT/ITES sector, however, it was a year of growth.

Ravi Sam, chairman of Southern India Mills’ Association, said 2022 was not a good year for the textile industry in this region. The sector confronted high raw material prices, mainly cotton. Domestic cotton prices ruled higher than the international prices. Further, there were indications of recession in many western markets.

Business and production dropped almost 30% for many in the industry.

In the backdrop of a lot of uncertainty, textile units were holding back investments. The actual market trends would be clear only by the end of February 2023, he said. The spinning mills need to focus on value addition, traceability, contamination free cotton availability, etc., for growth in the coming years, he said.

With regard to micro, small and medium-scale enterprises (MSMEs), president of Coimbatore District Small Industries Association, V. Thirugnanam, said the year started on a positive note. “But, raw material prices were a blow in the first six months.” Then came the hike in power tariff. Business and capacity utilisation dropped 20 % to 30 %, he said.

On the emerging sectors, Mr. Thirugnanam said the platform was set for the electric vehicle sector to take off here.

“Raw material prices are stabilising and there are signs of demand revival. Though there are the challenges of COVID-19 spread again and forecasts of a slowdown in global economy, we need to wait and watch the impact of these on MSMEs,” he said.

According to D. Vignesh, president of Southern India Engineering Manufacturer Association, 2022 was an “unprecedented year” of slowdown for the pumpset manufacturers. While demand for domestic pumps declined 50 % to 60 %, agri pumps saw almost 50 % drop in demand. While there were problems related to high raw material prices earlier, increase in GST to 18 % for pumpsets created a huge price difference between products of unorganised and organised manufacturers. Further, with rains across the country almost all through the year, the demand for pumpsets witnessed a sharp fall, he said. The industry was hopeful of a revival after Pongal.

Prashanth Subramanian, chairman of Confederation of Indian Industry, Coimbatore, said the entire country came out of COVID-19 and Indian market showed resilience almost all through the year. With focus on costs, western manufacturers were outsourcing more and they wanted alternative suppliers to China. These opened up opportunities for Indian companies. With several IT/ITES companies adopting hybrid working models, they wanted to be present closer to talent pools. Hence, several small and large companies were opening shop in Coimbatore. Most IT parks were expanding in Coimbatore and smaller technology parks were coming up, he said.