The Hindu : Tamil Nadu News : Small foundries affected by raw material price increase

Online edition of India's National Newspaper
Monday, Jun 07, 2004

Tamil Nadu

Tamil Nadu

Small foundries affected by raw material price increase

By Our Staff Reporter

COIMBATORE, JUNE 6. A number of small foundries in the region have reduced production owing to an increase in raw material prices, according to the Coimbatore Tiny and Small Foundry Owners Association.

An association release said of the 400 foundries, some units stopped production, as they were unable to bear the increase in raw material prices.

P. Udhaya Kumar, secretary, said the cost of pig iron now was Rs. 23,000 a tonne; coke iron Rs. 15,000 a tonne and that of scrap Rs. 15,000 against Rs. 9,500 (pig iron), Rs. 9,700 (coke) and Rs. 8,000 (scrap) in January 2003. The prices increased by 100 per cent between January 2003 and January 2004. During the last five months, it had gone up further, he said.

However, the foundries were unable to increase the cost of castings. He said the foundries would have to sell the castings at Rs. 40 a kg to meet the increase in production cost.

The castings were purchased mainly by small-scale pump manufacturing and engineering units which were unable to afford the increase in price. The foundries were hence hit by the increase in raw material prices and inability to hike the cost.

During the last few months, a number of foundries stopped and many reduced production.

Hence, the association planned to appeal to the Centre for measures to control the raw material prices.

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