LPG shortage, rising input costs and labour issues are severely impacting foundry MSMEs in Coimbatore, with industry bodies warning of production cuts and supply chain disruptions.
Coimbatore:
The ongoing LPG shortage, coupled with rising input costs and labour challenges, is severely affecting the foundry and engineering MSME sector in Coimbatore, industry representatives have said.
According to Velusamy, president of the Coimbatore chapter of The Institute of Indian Foundrymen, several units have already reduced production, while some are on the verge of closure due to multiple operational pressures.
The foundry sector depends heavily on LPG for key processes such as core baking, ladle preheating and heat treatment. The shortage is now impacting not only foundries but also downstream industries including automotive manufacturing, pumps and motors, valves, compressors and general engineering sectors.
Industry sources highlighted that input costs have increased significantly due to shortages and price rise in materials such as carbides, industrial oils, lubricants, packing materials and petrochemical-based products including binders, coatings and resins. This has led to increased production costs and reduced profitability for MSMEs.
Labour availability has also emerged as a major concern. Migrant workers are facing difficulties in accessing domestic LPG cylinders, affecting their ability to cook food. As a result, many workers, especially those staying in hostels, are returning to their native places, leading to labour shortages in industrial units.
The foundry sector plays a critical role in the manufacturing ecosystem, producing essential components used in engines, transmission systems, pump housings, valves and industrial machinery. Any disruption in this sector could lead to shortages of key components, affecting OEMs and other manufacturing units through supply chain delays.
Export-oriented units are also facing challenges, with production delays affecting their ability to meet contractual commitments. Companies are increasingly relying on costlier air freight options, while rising airfare has also impacted business travel and client interactions.
Industry representatives warned that the combined impact of fuel shortages, cost escalation and labour issues could trigger a wider slowdown in the manufacturing sector if not addressed immediately.
They have urged the government to ensure uninterrupted LPG supply, prioritise allocation for MSMEs, stabilise prices and availability of petrochemical inputs, promote alternative fuels such as PNG, and address labour-related challenges.
Industry bodies cautioned that failure to resolve the crisis promptly could lead to a cascading impact across the entire manufacturing value chain.
The ongoing LPG shortage, coupled with rising input costs and labour challenges, is severely affecting the foundry and engineering MSME sector in Coimbatore, industry representatives have said.
According to Velusamy, president of the Coimbatore chapter of The Institute of Indian Foundrymen, several units have already reduced production, while some are on the verge of closure due to multiple operational pressures.
The foundry sector depends heavily on LPG for key processes such as core baking, ladle preheating and heat treatment. The shortage is now impacting not only foundries but also downstream industries including automotive manufacturing, pumps and motors, valves, compressors and general engineering sectors.
Industry sources highlighted that input costs have increased significantly due to shortages and price rise in materials such as carbides, industrial oils, lubricants, packing materials and petrochemical-based products including binders, coatings and resins. This has led to increased production costs and reduced profitability for MSMEs.
Labour availability has also emerged as a major concern. Migrant workers are facing difficulties in accessing domestic LPG cylinders, affecting their ability to cook food. As a result, many workers, especially those staying in hostels, are returning to their native places, leading to labour shortages in industrial units.
The foundry sector plays a critical role in the manufacturing ecosystem, producing essential components used in engines, transmission systems, pump housings, valves and industrial machinery. Any disruption in this sector could lead to shortages of key components, affecting OEMs and other manufacturing units through supply chain delays.
Export-oriented units are also facing challenges, with production delays affecting their ability to meet contractual commitments. Companies are increasingly relying on costlier air freight options, while rising airfare has also impacted business travel and client interactions.
Industry representatives warned that the combined impact of fuel shortages, cost escalation and labour issues could trigger a wider slowdown in the manufacturing sector if not addressed immediately.
They have urged the government to ensure uninterrupted LPG supply, prioritise allocation for MSMEs, stabilise prices and availability of petrochemical inputs, promote alternative fuels such as PNG, and address labour-related challenges.
Industry bodies cautioned that failure to resolve the crisis promptly could lead to a cascading impact across the entire manufacturing value chain.