MSMEs in Tamil Nadu adversely affected due to hike steel prices
Coimbatore, Nov 23 (KNN) The sharp rise in Steel prices have adversely affected a large number of Micro, Small and Medium Enterprises (MSMEs) in Tamil Nadu.
According to Coimbatore District Small Scale Industries Association (CODISSIA) the prices of the commodity have jumped from Rs 37,000 per tonne to Rs 47,000 per tonne in the past six months and there is a secular upward trend for steels, plates, angles etc.
''The MSME industries will cease to exist, if necessary corrective action is not directed from the Ministry on the increasing prices of raw materials and other allied materials. MSMEs have already suffered due to the impact of COVID-19 and in addition, a blow to MSMEs like heavy increase in prices of raw materials due to which MSMEs are facing with cancellation of orders, uncertainty of consumption in the market and declining of exports etc.,'' Codissia said in a letter to Dharmendra Pradhan, Minister for Petroleum and Natural Gas and Steel, Nitin Gadkari, Minister for MSMEs, Nirmala Sitharaman, Minister of Finance and Corporate Affairs and Office of the Prime Minister.
The Coimbatore industry body also said that their additional 20 per cent loan to MSMEs which was sanctioned by Finance Minister through banks under the
Guaranteed Emergency Credit Line Scheme under Aatma Nirbhar Bharat, was completely absorbed due to the steel price increase.
''Coimbatore is a manufacturing hub powered by MSMEs and caters to the manufacturing of pumps, motors, compressors and many other products in addition to being in the valves and automobiles sector. The prices of steel and other allied foundry items like Coke, Pig Iron, cast iron, steel Scrap, CI Boring, HR Sheet, CR Sheet, Copper and Aluminium, have increased by 30 per cent to 35 per cent post lock down due to COVID-19,'' said Codissia president R Ramamurthy.
Besides price there is also a shortage of raw materials such as steel, copper, Zinc and brass. Zinc prices have risen from Rs 170 a kg to Rs 220 a kg, resulting into the hike in prices of end products, due to which exports of engineering goods are facing severe headwind, he added.
''When the import of raw materials like steel, wire rods etc. were allowed, the prices were very competitive. But with Import Duty being increased and with the local manufacturers not being able to supply raw materials at competitive prices, the MSMEs are getting crippled,'' Codissia said.
The association requested the ministers to look into the matter and allow imports of steel materials to India for smooth supply of steel items, which is a primary source of manufacturing activity.
The Steel Authority of India (SAIL) yard in Coimbatore was closed in 2015 due to construction of a railway over bridge should be reopened, it said.