Coir industry reinventing itself to fight recession and expand
Financial express : Sandip Das
Posted: Friday, Feb 19, 2010 at 2252 hrs IST
Rajendra Paniker, a small-time coir mats producer in Alappuzha district of Kerala, is new to IT environment. Yet, these days, he is putting computers and Internet to good use to expand the market for coir products in and outside the country. Paniker is also business manager of Sarvodayapuram small-scale coirmats producers' cooperative society, the 400-member body of producers of such items as area rugs, doormats, matting and carpets. Using IT tools, he has managed to double the co-op's business from Rs 65 lakh in 2006-07 to Rs 1.3 crore during the last fiscal. Thanks to training imparted by a local IT service provider Novasoft, Paniker and most of his co-op members have learnt the basics of computer use for business expansion and data storage.
Coir Floor Furnishing, a private unit, was planning to increase its production capacity and required a working capital loan from banks. The company needed specialised financial services support to approach banks for the purpose. Thanks to the support by Gopalan Nair, an Alappuzha-based coir industry expert, the company could get a loan of Rs 35 lakh.
In this recessionary time, when the coir product exports from Kerala had been hit, timely intervention by Small Industries Development Bank of India's (SIDBI) business development services (BDS) division has supported thousands of SMEs in this coir cluster in advisory services. This, in turn, has helped coir units to expand business.
P Mahadevan of Travancore Cocotuft, an exporter of coir products from Kerala, had been using IT for carrying out most back-office operations and handling customer orders. However, his business could not grow because Cocotuft did not have a presence in the Web. He had been helped by BDS to re-engineer his business processes, touching everything from how orders are managed to his staff incentive scheme. He also has an IT-related BDS provider on retainer, updating and adding to his custom-developed back-office enterprise system.
"This was despite the fact that he had been making a strong push during the last two years to develop new mat designs and get them to the market through major global trade fairs," says Pankaj Ahir, senior manager of Cluster Pulse, the company implementing BDS project on behalf of SIDBI. With the support of Cluster Pulse, Mahadevan has uploaded in the company's website all of its 4,000 odd designs so that customers from all over the world can browse the catalogue.
More than a century-old in Kerala, the : coir industry employs more than 1.5 lakh weavers and 4 lakh spinners. The industry has been going through a bit of rough patch because of the lack of modernisation and marketing effort. "As most units are small in their operation and there are no big players in coir product manufacturing, we do not have the financial capacity to invest in market expansion and branding," says MV Viswanathan, assistant general manager, Aspinwall & Co Ltd, one of the oldest industrial units now owned by the Travancore royal family.
Coir is a natural fibre extracted from the coconut husk abundantly available in the coconut-growing state of Kerala. Coir fibre is processed through a traditional retting process and from the unretted husk through a mechanical process. Kerala's coir industry dates back to the 18th century when an industrial unit for manufacturing coir products was started by an Irish-American named Jame Darragh in 1859 in Alappuzha.
The sector mainly comprises micro enterprises that are largely promoter-driven and have limited access to specialised BDS. "This tends to affect their competitiveness and also limits the growth opportunities. So, this sector needs handholding and support over an extended period by way of affordable BDS and also access to credit," KG Alai, head of project management division, SIDBI, told FE.
Alai said under the SME Financing & Development Project, a World Bank-led multi-agency effort being implemented by SIDBI, the technical assistance component of the Department for International Development envisages intervention in identified clusters through BDS. Following support from SIDBI and its associate Cluster Pulse, the coir industry, successful mainly in tapping the export market, is now looking at the domestic market in a big way. Aspinwall has recently launched the Sparsh brand of doormats exclusively targeted to the domestic market.
Geotextiles, a byproduct from coir, has, for the first time, found a new client in the sponge-iron industry in Orissa. The demand for geotextiles, currently being used for blanketing the industry's waste mounds, is growing. According to a Coir Board official, despite the problems faced by the industry, exports of coir products would be in the range of Rs 700 crore this fiscal against Rs 580 crore achieved last year. "But there is no denying that much greater government support is needed for the industry that provides livelihood to lakhs of people," he added.
