Coimbatore’s motor pump makers deeply challenged by Gujarat peers

Coimbatore: Its thriving textile industry may have earned it the moniker - Manchester of South India - but Coimbatore has also long established itself as the epicentre of motor pump making in the country. The first electric motor in India was manufactured here in 1937. However, the city is fast losing its leadership in this sector and is now reduced to accounting for 40 percent of the pump sets made in the country.

Beleaguered by rising costs and challenges in sourcing raw materials, in the past decade, the industry comprising a sizeable number of micro, small and medium enterprises (MSMEs), has also had to contend with stiff competition emerging from Gujarat, which has managed to corner 35 per cent of the pump production in India.

The growth of Coimbatore’s pump industry has been fed by availability of a skilled workforce and robust supply chain. Its pumps have been put to both household and agricultural use. Some manufacturers even found export markets for their products.

But in the past decade, Gujarat has been stealing a march over this meticulously developed industry, armed with 20 per cent cheaper raw materials and government incentives, including lower power tariffs and interest subsidies.

For example, industrial power tariff in Tamil Nadu are fixed at Rs 8.50 per unit. In Gujarat it is Rs 7 per unit. The western state also offers special night tariffs for continuous industries. Tamil Nadu’s peak hour charges are fixed.

“This has caused a significant market shift toward Gujarat. Micro and small units are worst hit as they cannot sustain business in the more expensive Coimbatore,” J James, President of the Tamil Nadu Association of Cottage and Micro Enterprises (TACT), told DH.

Though around 600 motor pump manufacturing units exist on paper in Coimbatore, many have quietly gone defunct in recent years, especially post-pandemic, industry sources said.

“The motors made in Gujarat are at least 20 per cent less expensive than those produced in Coimbatore. A decade ago, Gujarat’s motors were of lower quality, but they have improved, increasing sales,” he added.

James also noted that many Coimbatore manufacturers are considering relocating, enticed by incentives offered by Gujarat and states such as Madhya Pradesh, which seek to attract new industries.

The foundry sector, closely linked to the pump industry, also faces challenges including high electricity costs, expensive raw materials, lack of working capital, and shortage of skilled labour.

K Veluswami, Chairman, Institute of Indian Foundrymen, Coimbatore Chapter, told DH that raw materials are scarce in Coimbatore and materials for manufacturing pump sets, like copper and castings, are at least 20 per cent cheaper in Gujarat. Margins have dropped from 25 per cent to around 8–9 per cent.

“Micro foundries are especially affected by the introduction of advanced high-pressure moulding machines, which reduce reliance on skilled manpower,” he noted. “Many cannot adopt this technology due to lack of capital.”

R Rajkumar, who has run a pump motor manufacturing unit in Coimbatore for 20 years, said that although their pumps are “the best in terms of quality,” they cannot compete outside Tamil Nadu due to cheaper pumps from Gujarat.

“Castings are more readily available in Gujarat because of large ship-breaking yards providing scrap metals. It is at least 20 per cent more expensive for small foundries here to purchase castings. Steel price fluctuations also pose a major challenge,” he said.

Rajkumar also urged the state government to set up small industrial parks like Gujarat’s for pump set manufacturers, so they do not have to pay high rents that are also subject to GST.

Veluswami said the government should support both foundry and pump industries by mandating large companies to procure a portion of raw materials and products from MSMEs. “Norms are so stringent that MSMEs cannot supply under the PM-KUSUM scheme. There should be concessions so we can coexist with large firms,” he added.