In the MSME sector, due to uncertainty caused by COVID and increase in raw material prices, many units have cut production and workforce reduction to cope with the loss.
Coimbatore
In the MSME sector, due to uncertainty caused by COVID and increase in raw material prices, many units have cut production and workforce reduction to cope with the loss.
Hit by COVID last year, many industries across the State are looking forward to a more fruitful 2022, despite the Omicron threat. With higher raw material cost impacting balance sheets significantly, cost cutting and ingenuity are the mantras now.
Having weathered lockdowns and a tragic migrant crisis not long ago, entrepreneurs have become more resilient. At Tiruppur, the textile hub of India, things are finally starting to look up as garment makers look to make up for lost time.
MV Ramesh Babu, Coimbatore District Small Industries Association (CODISSIA) president, said that industrial units have lowered production by up to 40 per cent. He said that some units have declared holidays on weekends and some are operating a single shift per day in place of three. The CODISSIA president further said the units have several commitments like showing turnover to the banks and settling rent and electricity bills. Many units have cut the overtime (OT) option for their workers, he added.
The impact of rising raw material cost is being felt elsewhere too. V Nityanantham, who used to take orders from IIT-Madras, says this year, the turnover is not even Rs 75,000. Usually reliant on small orders, many Tier-III entrepreneurs are now downing shutters in Chennai.
COVID-19 may have hit the sector hard but rise in raw material cost and banks’ refusal to provide them with credit are the factors threatening them the most. The only silver lining is that exports have picked up for some MSMEs in the Ambattur Industrial Estate in Chennai.
Image Sources: Google Images
Also Read: