Rising raw material cost run SMEs in pump industry dry

Pump manufacturers said the price of copper has increased drastically in the last year and that they have no choice but to hike the price.

Published: 14th February 2022 11:23 AM  |   Last Updated: 14th February 2022 11:23 AM   |  A+A-

Express News Service

COIMBATORE: Rising raw material cost has pushed up the price of energised pumps multi-fold in the last couple of years, pump manufacturers said the price of copper has increased drastically in the last year and that they have no choice but to hike the price.

R Palanisamy, a pump manufacturer at Uppilipalayam in Coimbatore, said, "The price of Copper increased to Rs 950 from Rs 450 per kg in one year. Also, the price of cast iron increased to Rs 110 from Rs 65 per kg, stainless steel to Rs 140 from Rs 95 and stamping charges have risen to Rs 120 from Rs 90."

He further said the hike in raw material price led to a slow down in the industry which in turn triggered a demand. "We were manufacturing a minimum of 50 pumps a day. After the increase of raw material cost, it has come down to 10 - 15 units a day," he added.

K Maniraj, president of Kovai Power Driven Pumps and Spares' Manufacturers (KOPMA) said, "Around 3000 small scale pump manufacturing units are functioning in Coimbatore. More than 50 per cent of small units are under heavy financial crisis as they could not compete with big players on pricing."

Explaining the price of pump, he said, "The input cost for 0.5 HP pump has increased to Rs 2,500 from Rs 1500. Similarly, for a 1 HP set it has gone up to Rs 9,000 from Rs 6000 and for 5 HP pump, it has increased from Rs 16,000 to Rs 20,000."

Expressing concern that SMEs would be forced out of the sector if the situation continues, Maniraj called upon the Union government to reduce import duty on raw materials or regulate price. "Copper is primarily imported from South Korea and Vietnam. The import duty was 6 per cent prior to 2021 and it has been doubled," he pointed out.

S Nachimuthu, a farmer from Madukkarai said, "Pumps used in the agriculture sector must be serviced once in three years. When I went for service of my 7.5 HP pump recently, I was charged Rs 12,500 whereas it was Rs 6,800 two years ago. The cost of all farm inputs has gone up, but we are not getting decent returns for the produce. I have left 6 acres of my 15 acres barren as I cannot afford the cost."

"Till 2019, small industries in pump manufacturing used to give a quotation to buyers once every year. Now, we are pushed to give a quotation every ten days. Some are changing quotations every day since the raw material cost is increasing day by day. Till 2019, raw material cost increased by a maximum of 5 per cent. In the last one year, it increased by up to 200 per cent and is still increasing," said R Vadivel, who runs a small scale pump manufacturing unit at Peelamedu.

"Before GST rollout, MSME pump manufacturers paid 5 per cent tax and big operators were charged 12 per cent. So we could get the difference in the price of our product. Now, the price of pumps made by MSMEs and big players are the same, and we cannot compete with them on price. Also, we get paid for orders once in three months but have to pay GST by every 10th in a month. Otherwise, we would be penalised by Rs 50 every day," he added.


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