Date:30/08/2008 URL: http://www.thehindubusinessline.com/2008/08/30/stories/2008083051172100.htm

Back Coindia opens raw material bank near Coimbatore

Phase plans
In phase one, raw materials like pig iron, metallurgical coke will be stored.
In the next phase, there is to be bulk purchase of MS scrap, cast iron scrap.
By eliminating middlemen, Coindia hopes to keep rates competitive.

Our Bureau

Coimbatore, Aug. 29 Coimbatore Industrial Infrastructure Association (Coindia), which had taken up the Coimbatore industrial cluster project, has stepped in to meet the raw material requirements of small scale industrial units in the region by opening a raw material bank (RMB) near the city.

By eliminating middlemen, Coindia hopes that it would be able to supply the essential raw materials needed by the foundry, pump and engineering units in the region at competitive rates.

Speaking to newsmen in Coimbatore on Friday, Mr G. Rajendran, President, Coindia, and Mr Jayakumar Ramdass, President, Southern Indian Engineering Manufacturers’ Association (Siema), said that earlier, SIDCO was playing the role of raw material supplier to the industrial units in the region.

Due to various reasons, SIDCO had withdrawn from this role, and the small scale industrial units had to depend on dealers for their requirements. Because of the small quantity of raw material that the individual units procured at a time, they did not enjoy the economy of scale, which deprived them of competitive price.

Coindia has established the RMB at Chinnavedampatti near Coimbatore on a one acre plot and in the first phase, raw materials like pig iron, stainless steel rods, MS rods, enamel copper wire, metallurgical coke and ferro silicon would be stored. The yard has the capacity to store 2,000 tonnes of pig iron, 1,500 tonnes of met coke, and 500 tonnes of MS/SS rods among others. In the next phase, Coindia has plans to make bulk purchase of MS scrap and cast iron scrap, which could be imported.

Mr Rajendran expected the micro, small and medium units to save up to 10 per cent in raw material cost by purchasing from Coindia which would enjoy the advantage of making bulk purchase from the raw material manufacturers.

He said that in the first full year of operation, the RMB might generate a business volume of Rs 100 crore which would double in the second year. The bank would supply raw materials required by small and medium industries that cater to the domestic markets.

Mr Ramdass said the RMB would help insulate the micro/small/medium units from the impact of raw material price volatility since the bank would have adequate stock of essential raw materials. It would work without any profit motive and would only factor the administrative cost while fixing the price for materials, he said.

The RMB will be inaugurated on September 1 by the Minister for Rural Industries, Tamil Nadu, Mr Pongalur N. Palanisamy, in the presence of the Union Minister of State for Textiles, Mr E.V.K.S. Elangovan.