The Hindu Business Line : TN, Karnataka, Kerala in pact to support SSIs

The States will explore opportunities for development of industrial estates, industrial infrastructure improvement schemes and cluster development schemes.

Chennai , April 6

THE small industries development corporations in Tamil Nadu, Karnataka and Kerala are trying to help the industries counter the steep increase in price of metallic raw materials.

The Tamil Nadu Small Industries Development Corporation and its counterparts in Karnataka and Kerala have entered into an agreement to assist small scale industries (SSIs) procure raw materials, and cooperate in implementing other schemes to encourage SSIs, according to industry sources.

They are looking at pooling the total requirement of iron and steel materials to achieve economies of scale. They hope to jointly procure raw materials such as aluminium, pig iron, coke, wax, scrap and plastic granules.

A working group has been constituted with representatives of the three corporations to coordinate the orders.

This way they hope to increase the size of the order and get discounts and concessions on the bulk orders.

Representatives of the three corporations have held discussions with the officials of the Steel Authority of India Ltd (SAIL).

The agreement, expected to be implemented this year, is awaiting SAIL's approval. The other areas of collaboration include joint efforts in the industrial estate schemes and marketing of SSI products.

They will explore opportunities for development of industrial estates, industrial infrastructure improvement schemes and cluster development schemes.

According to SSI representatives, the price of iron, steel and other raw materials have been on the increase from 2000. Since then various associations have been asking the Government to intervene on their behalf.

Last December the small-scale industries announced that they would take concerted steps to protest the hike.

Over the last one year pig iron prices have increased to Rs 16,000 a tonne from Rs 9,500, coke to Rs 14,250 from Rs 9,700, and scrap to Rs 13,000 from Rs 8,000, they had said.

Different segments of the small-scale industries, including foundries, grill manufacturers, steel furniture manufacturers and other engineering industries have been continuously organising demonstrations.

Meanwhile, a standing committee of the Parliament has suggested long-term and short-term measures including market intervention mechanism by the Central Government to stabilise raw material prices.

It has also suggested that industry associations can get into purchase contracts with raw material producers to get concessions and rebates.