Bangalore, December 10: Manufacturers of pumpsets in the city of Coimbatore are facing tough times with declining demand amidst increasing cost of production resulting in manufacturers losing their competitive edge, published media reports suggest.
Most of the pumpset manufacturing units in the city located bordering Kerala has witnessed a drop of as much as 30 per cent in business with low power supply ascribed as a main cause for the slump in production caused by the higher output costs.
Additionally, the cost of raw material has also risen in the region with grey iron castings costing Rs.62 a kilo compared to Rs.48 priced in Agra, says the article published in The Hindu (Read the Full Story) which suggests that manufacturers in Coimbatore would be fighting a losing battle against competition from cities like Agra in Uttar Pradesh and Ahmedabad in Gujarat.
In fact, the article claims that a few big players in the region have actually started sourcing products from these cities in the north and selling them under their brands. Interestingly, there was a time when more than 60 percent of the pan India market was ruled by pumpsets made in Coimbatore.
An additional burden in the form of VAT has been added to the manufacturers by the state government. From last month, the VAT benefit has been nullified for the units that source components from local market and sell the end product in other states. This has resulted in a further increase in the cost of pumpsets, the article says quoting manufacturers.