Can Coir industry stand on its own feet?

Has Coir industry found its feet? Coir industry is Kerala’s poor man’s industry, a legacy of the British, where women outnumbered men in doing jobs that saw Coconut fibre turn into lively brown, which was taunted as God’s Own Country’s traditional industry. The first spinning wheel perfected by the Englishmen, started defibering coconut fibres to coir yarn in 1857 when, elsewhere, Indian soldiers started showing dissidence to their superiors and this unrest was called the First War of Indian independence. Down the line after 150 years, is the Coir industry standing on its firm feet? If we compare the Coir manufacturing industry of 2005, and the Coir industry of now (in 2012), what has been the growth accomplished by the manufacturing sector? Inclusive growth and livelihood betterment of its workers? Government’s direct support to the industry? Market growth- domestic and export? The entire industry was posting a growth of around Rs 350 Cr by way of growth in 2005. The total quantity of coir used was around 1, 25,000 metric tones. The industry has never modernized, stayed put with its obsolete machinery, fresh capital investment was practically nil, and the workforce was around 4.5 lakh, who claimed that they were getting meager wages, and saw no future in the industry hence migrated to greener pastures. Coir industry came out with a Millennium Goal Plan to take the golden fibre of God’s Own country, to new and fresh destinations through avalanche of Schemes. State Bank of India came out with a project Uptech Scheme, which was to provide a cluster model growth. Central Government also sanctioned Rs 50 Cr (in the ratio: Rs 43.5Cr:Rs10Cr) Industrial Infrastructure Up-gradation Scheme. This Scheme has been in operation for the last decade or so. In addition, SFURTI Scheme was introduced to upgrade 4 Clusters in Kerala. None of this had any impact and the severity of the manufacturing problems continued, and the industry was no where, clueless on the directions to take, indecisive on its future and directionless growth. In the meantime, around 2 lakh workers deserted the industry to take to other occupations like the Construction industry which provided them 2 times the wages they were getting in Coir industry. One superficial change occurred in the industrial landscape. Defibering of Coir was done at Pollachi and other Tamilnadu centers. Coir fibre, found surprise buyers from China, demanding around 1 lakh tonnes for which they were willing to give higher prices. Between April-Dec 2011, Rs 89.74 Cr (equivalent to 64,000 tonnes) found way as exports which were more than 25% of the total quantity of Coir end products produced in quantity by us. The handloom mat and tufted mat which had rubber content, saw export value as Rs 254.28 Cr (handloom mat), Rs 253.51 cr(tufted mat), a growth of 9.16% in quantity and 26.67% in value of the total Coir exports in respect of handloom mat and 10.38% quantity and 29.69% value in terms of tufted mats(of Coir exports). Rubber has an enlarged ratio in the end Coir products. Does it augur well for the Coir industry? Coir pith accounted for 49.17% of the total quantity of 2, 95,000 tonnes while its value on total Coir exports was 18.37% of Rs 804.05 Cr. (Direction of Exports) 25.46% of 2,95,000 tones of Coir products were directed at United states, 15.40% to China, 35.74% to Europe. In 2005, Coir industry was getting a Duty Entitlement Pass Book Credit of 1%. Today, they are getting 3.5% Duty drawback for handloom and tufted mats, 5% for Coconut mats(Chapter 57 of the ITC HS Code) under Special Focus product Scheme, Table 2 of Appendix 37D of HBP, Vol I, bonus of 2%, transport allowance of 7.5% from handloom export promotion council. A Scheme to develop the downtrodden labour known as REMOTE was envisaged with an outlay of Rs 243 Cr, with government assistance around Rs 99 Cr. People tend to create a frame around the industry saying that the industry is in doldrums. For every dollar earned, the industry gets 17.5 cents for handloom mats and 10.5 cents for tufted mats by way of inducements. In addition, interest subvention in the Pre-shipment and post shipment Credit, liberal credit under Packaging Credit under Foreign Currency, plethora of Schemes under ECGC, foreign trade participation substantially subsidized are other Schemes that stand to benefit the Coir industry. Kerala has sufficient Coconut trees, and Coconut fibre is available, but why the industry, industrial associations, bodies connected with the state/central government failed to introduce large defibering units in Kerala. It is a mystery, and not a pro -active policy for an industry which has set its eyes on 15% growth in exports. Regarding the quality of Coir fibre, why the Research Organizations in the Coir industry which is spending Crores of Rupees of Tax payers money, has not come out with viable options. Why are new machinery manufacturers not creating new innovative machines, when Jute which is having similar production methodology has introduced them? Tangible investment, higher productivity, new capacities, new innovations, R&D etc will be seen deployed in a growing industry. If Coir industry needs to remain traditional with low economies of scale, then laggard results will affect the industry. Futuristic growth, in these days of competition, must be visible at ground zero. Along with high turnover exporters, and merchant exporters who depend upon the spare capacity of industry, there are medium scale and small scale manufacturers, whose obsolete machinery and environment, and poor returns drive them out of the industry. What seems to be the future in store for them? The labourers per se. Do they get decent wages? Any measurement of growth of any industry depends upon the payment earned by the labourers and their positive attitude to the fortunes of their companies. Are their wages competitive? Is it with the times? What about the Coir markets. Does it have a domestic market? Up-country market? Has market push or market pull ever evolved. Does the industry have a marketing plan to take on the market of contemporary times? What is the contribution of the Coir ministry at the States, this being a subject in the concurrent list and the administrative ministry which administers the commodity board. Has it ever evaluated the entire industry with its futuristic growth projections, skilled labour, R&D growth, and compared the same with the picture of competitive markets? With all the support, benign assistance granted, the industry has not made any notable growth. There may be serious problems at the threshold which may need analysis. If Coir industry needs to become stable, there is a new need for re-oriented approach.