THRISSUR: The demonetisation drive has hit the gold ornament manufacturers in the state hard. As per the data available with the Jewellery Manufacturers Association (JMA), nearly 50 per cent of the ornament manufacturing units have come to grinding halt because of lack of orders from jewellery shops. Jewellers are not giving fresh orders because of the sharp dip in sales.
“Gold is not a necessary item in people’s daily lives. So, they are not buying ornaments. But the dull business will affect more than two lakh people working in ornaments manufacturing units and allied sectors like dye shops, colouring units etc,” said JMA president Kuriappan K Erinjery.
Thomas Konnikara, owner of a manufacturing unit, said the crisis has affected his centre. “Most of the manufacturing units are running on bank loans. If the crisis persists, we will find it tough to repay our loans. We cannot give salary to workers unless we get new orders,” he said. Kuriappan said nearly Rs. 1 crore is needed in Thrissur alone to give wages to workers.
The manufacturing unit owner will get up to 2.5 per cent of the ornament’s value as his remuneration from the jewellers.
“The worst-hit areas are Thrissur, Malappuram and Kozhikode because these districts house the maximum number of manufacturing units. More than 4000 units are working in the State. Apart from the big units, there are small scale units that employs 3-4 men,” said Kuriappan.
He said the big units use several kilograms of gold while the small scale producers use 100-300 grams gold per day. “The crisis will hurt the small players more than the big units because the latter group gets very low remuneration,” said Kuriappan.
Kuriappan said the sector would require at least six months to recover from the demonetisation effect. “The sector is already going through a big financial crisis. Demonetisation is another huge blow to us,” he said.