Financial Daily from THE HINDU group of publications
Saturday, Apr 16, 2005
Industry & Economy
Centre approves Coimbatore industrial cluster proposal
Coimbatore , April 15
THE Ministry of Commerce and Industry has given its nod for the Rs 67-crore Coimbatore industrial cluster project under the Industrial Infrastructure Upgradation Scheme (IIUS) for the development of pump, motor and foundry units.
While the Union Government will extend a grant of Rs 50 crore, the balance amount would be mobilised through contribution from the participating associations and by way of debt. A special purpose vehicle (SPV) Coimbatore Industrial Infrastructure Association would be constituted for implementing the scheme.
The Commerce and Industry Minister, Mr Kamal Nath, has informed the Coimbatore Lok Sabha member, Mr K. Subbarayan of the approval of the proposal made by a group of industry associations from Coimbatore led by the Southern India Engineering Manufacturers' Association (SIEMA) and the Institute of Indian Foundrymen (IIF).
However, the Coimbatore District Small Industries Association (Codissia), which was one of the earliest to press for the cluster project and which later joined hands with SIEMA and IIF in pitching for it, does not figure among the organisations involved with the latest initiative.
Explaining the salient features of the proposal, Mr C.R. Swaminathan, President, SIEMA, and Mr G. Rajendran, Convenor, SIEMA and IIF Joint Project, told presspersons here that while performance improvement segment would require an investment of Rs 16.81 crore, sand reclamation plant and rapid prototype machine segment would need an investment of Rs 23 crore. The proposal envisaged an investment of Rs 8 crore for sewage water treatment and basic infrastructure development and the outlay for pump and motor segment was Rs 19.19 crore. Of the total outlay of Rs 67 crore, the grant under IIUS would be Rs 50 crore and the rest would be stakeholders' fund and debt.
The establishment of the sand reclamation plant would help small and medium foundries to recycle 75 per cent of the sand, helping to reduce the process expenses by 20 per cent. The cluster project would be particularly beneficial to the small and medium industries that may find it tough to invest in product development and improvement in view of the cost involved.
Mr Rajendran said a main problem faced by the pump manufacturers in Coimbatore in expanding their market share was in finding newer applications for the pumps. Nearly 99 per cent of the pumps produced in the region was used for water lifting. But the foreign buyers were particular that the pumps should not contain parts made of metals such as zinc and to meet such environmental considerations, the pumps would have to contain only stainless steel parts, which would be expensive. The project envisages changing construction material and upgrading technical know-how, which would help address these issues and enable Coimbatore pumps to be used in the food products and petroleum industries.
Once the project is implemented, the value of export of pumps from the region is expected to go up from Rs 33 crore (in 2003) to Rs 400 crore by 2010.
Mr Rajendran said though the capacity of the foundry industry in Coimbatore was 20,000 tonnes per month, the capacity utilisation was hardly 50-60 per cent. Once the cluster project was implemented, the small and medium foundries would be able to cater to the high quality segment that would push up capacity utilisation, thereby generating more employment.
Mr Swaminathan said the participating associations have committed their initial contribution under the cluster project. He expected work on the project to commence in June and finish in 18 months.
Commenting on the absence of Codissia in the project, he said Codissia has extended its full support for the project. In view of its commitment with the INTEC project, Codissia has not been able to involve itself with the cluster project, he said.
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