Poll code set to hit business of Coimbatore’s wet-grinder makers
With polls scheduled for May next year, Tamil Nadu govt’s scheme providing green ration card holders with free grinders to be stopped
Chennai: Kalavathi had to trudge a long way to the local mill to get her dosa batter ground for breakfast. “All the women in the area would get together to get this done,” said the 33-year-old mother of two.
It was a daily grind. “I would have to soak and carry the urad dal and rice all the way (to the mill) to get it ground,” she said.
Now, thanks to the ‘Amma grinder’ at home, life is a lot easier for Kalavathi, who works as a domestic help in the Chennai suburb of Tambaram. “I can easily make my own batter at home,” she added.
The ‘Amma grinder’ is part of a Tamil Nadu government scheme under which holders of green-coloured ration cards are provided with free wet grinders, along with other appliances such as ‘mixies’ and electric fans. Over the past four years, the Tamil Nadu Civil Supplies Corporation has distributed these freebies to nearly 1.85 crore women. In the first year of the scheme, 2011-12, the government sanctioned a sum of Rs.1,250 crore for this purpose.
The scheme catapulted the wet-grinder industry, which was fairly small until then, to a serious business with an over Rs.4,200 crore turnover as of June. Of the 12 big manufacturers that bagged the tenders, 10 are from Coimbatore, one from Erode and one from Chennai.
The manufacturers in Coimbatore—which emerged as a natural hub for the industry due to its entrepreneurial spirit, local talent and easy access to electric motors and natural stones—have always enjoyed a dominant share of the wet-grinder market.
All the parts essential to make wet grinders are usually sourced locally. However, in this case, owing to the volumes required under the scheme, a sizeable quantity of electric motors had to be imported from China.
Out of every 1 lakh wet grinders produced in India, around 75,000 grinders get made in Coimbatore alone.
While wet grinder use isn’t restricted to Tamil Nadu, Coimbatore and its suburbs remain the hub of its production. The 700 units in this cluster, which used to have a turnover of around Rs.225 crore per annum till 2011, now boasts a Rs.2,800-crore turnover.
“To rope in the maximum number of manufacturers, the bigger units bid as a consortium and the entire Coimbatore cluster benefited. This has significantly helped all the units in the region,” says D. Krishnamoorthy, president, Coimbatore Wet Grinders Manufacturers Association (COWMA).
As a large portion of the industry is unorganized and doesn’t have the minimum qualifications for bidding, being clubbed into a consortium with bigger players ensures profitability.
But with the assembly elections scheduled to be held around May next year, the freebie scheme must come to an end, as per the norms of the Election Commission. It is expected to wind down in September with the distribution of the last 90 lakh grinders for the fiscal years 2014-15 and 2015-16.
“We are not sure of the future now,” Krishnamoorthy said.
Amudha, a 39-year-old daily wage worker at a wet-grinder assembly unit, is uncertain about her future. “If they cut down production, I fear I may lose my job,” she said.
She may be right. While the spurt in demand tied to the government scheme had created jobs on a large scale, there is now fear of a downsizing once the scheme ends.
“Our company has notched up a turnover of nearly Rs.100 crore in the last four years due to the scheme. After capacity addition, it is now difficult to bring down the scale of production from that peak,” said P. Kumeresan of Ponmani Grinders.
D. Nandakumar, president of the Indian Chamber of Commerce and Industry, Coimbatore, said, “Major orders were bagged by Coimbatore. That is definitely a bonus. Industry cannot expect the same boom every time and should be prepared for the worst.”
Others are more optimistic.
“Most of the ration-card holders have benefited from the government scheme and are using grinders. Once they get used to the comfort of using them, they will need them for their everyday cooking,” said K. Ravi of Sri Lakshmi Industries, which has been in the business for over five decades now. “Hopefully, after a couple of years, grinder sales will pick up again. This time it will be a replacement and service market though.”
Left with no choice, many wet-grinder manufacturers are trying to find ways to better use their existing factories. “Once the scheme comes to an end, it is difficult for us to drastically reduce the turnover of these past four years. So, we are planning to make use of the newly-created capacity and venture into tapping the home appliance market with a new range of products,” said Kumeresan.
Expanding the market is another option. Demand from clients other than the state government is expected to continue.
“Grinders of over three-litre capacity are used by hotels, outdoor caterers, marriage halls, commercial batter manufacturers, etc. A lot of cottage industries in cities use commercial wet grinders to prepare batter and sell them through retail outlets,” said K. Ravi.