Tamil Nadu - Coimbatore   

Hike in raw material prices hits engineering units

Staff Reporter

SIEMA seeks Centre's intervention

COIMBATORE: The recent hike in raw material prices, ranging from seven to 40 per cent in the last six months, has hit the engineering industries here.

The engineering units, numbering over 3,000, are unable to keep up their supply commitment or accept new orders, says C.R. Swaminathan, president of the Southern India Engineering Manufacturers' Association (SIEMA).

"They are facing a serious problem due to increase in the prices."

Prices of copper rods and wires and aluminium were going up almost on a monthly basis, and had shot up by 40 per cent. Pig iron, steel rods and sheets and electrical grade CRNO sheets saw a seven to 10 per cent hike.

"At this rate of increase, we will incur definite loss." Some of the foundries and pump and motor manufacturers have announced a five per cent hike in the product rates. However, if the raw material prices moved up further, this would have to be revised again, he said.

Mr. Swaminathan appealed to the Centre to intervene and control the hike in basic raw materials prices.

`Abnormal' increase

The Centre should issue guidelines to raw material manufacturers on pricing policy so that rates were revised once in six months or on a quarterly basis. The increase now was sudden and "abnormal". It was not just the engineering units, but also those manufacturing accessories and foundries that were affected.

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