Nearly 400 small-scale foundries here stopped production on Wednesday demanding measures to control prices of raw materials.
Pig iron, coke, and scrap are the main raw materials consumed at foundries. While prices of pig iron are up by more than 25 %, that of coke and scrap have increased by nearly 30 %, says Coimbatore Tiny and Small Foundry Owners’ Association (COSMAFAN) president A. Sivashanmuga Kumar.
When foundries resumed operations after the lockdown restrictions were relaxed, the industries operated at 40 % to 50 % capacity because migrant workers had returned home. Orders picked up gradually and the units now operate at 70 % to 80 % capacity. However, it is unviable as the foundry operators are shelling out 10 % to 15 % from their pocket because of the raw material price hike. “If we committed to an order in October, we are unable to supply now at the same price because of the steep increase in prices of raw materials. It is unviable,” he says.
The government should take steps immediately to control prices, there should be an active system to monitor prices, and the industries that buy castings should also pay more, he adds. The total production loss a day is estimated to be ₹ 30 crore because of the strike.
Several micro units that are members of Coimbatore and Tiruppur District Tiny and Micro Enterprises’ Association also stopped production for a day on Wednesday in support of the indefinite strike by the foundries.
“Most of the industries that supply to wet grinder, pumpset, automobile units buy castings from the small foundries. With the strike by the foundries, these units will not get castings,” according to C. Sivakumar, president of the Association.
The larger industries have started cutting down on orders because of the prices. “We waited for the raw material prices to climb down. However, there is no such indication. We are unable to absorb the loss,” he says.