20 October 2017

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Golden Fibre Offers Golden Chance to Investors

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It is a criminal negligence. The Rs-6000-crore domestic coir market is left almost untapped. It is ten times bigger than the earning made form the coir export from the country. Yet coir firms are scrambling to grab overseas market without paying even a scant attention to the market at the door step.

“Of course, they are gravitated to the export market by the high profit margin mainly paid by the difference in exchange value in rupee-dollar rates. Exporters are paid in US dollars by their buyers and they convert it into rupee here for their domestic transaction. We cannot expect that such firms, which are medium to small entities, can hardly concentrate simultaneously both on domestic and overseas market”, says A.C. Eappen, a senior official with Coir Shippers Council.

But he believes that it is a blessing in disguise. Export oriented units operate on high cost and high return basis are not fit in the domestic business. It offers a sea of opportunities for fresh investors to set up units in leading coconut producing States of Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Orissa, Bengal, and the union territories of Andaman and Nicobar Islands and Lakshadweep to cash in on the demand for coir products in the domestic market.

“The main advantage of this sector is that there is scope to set up various units needing a few lakhs to crores. A tiny investor can start a de-husking, retting, de-fibring unit or a spinning unit. But those who can afford higher investment can go for weaving and dyeing, coconut pith block or geo-textile unit.”

He affirms that all these are market assured products. Some of the States in the country, which are not even heard about coir products, are virgin markets. Conventional products like mats, mattings and carpets are much effective and cheaper in resisting winter than the materials used in the several severe winter-prone areas. Coir products can save a lot of energy used for room heating in the season. In the time of rising energy cost, it matters a lot. So the US and European prefer coir products.

These apart, the innovative products like coconut pith blocks and geo-textiles have already made their presence felt in the market.

Coconut pith, the waste obtained during the de-husking of coconut husk, is good water absorbent and also can be converted to manure. It is widely used in farmlands in developed countries, especially in the Netherland. The concept is gradually picking up in the country. It is now used in vegetable and floriculture farms run by corporate houses, says Ramanathan, advisor to Coir Board.

Geo-textile which is very effective in preventing soil erosion is widely used in the West.  Coir Board, the government agency which plays the role of a facilitator for the natural fibre industry, is pushing up the products and concept is gradually gaining popularity.

Coconut fibre which is mainly used for spinning coir is now used by high-end car makers to stuff the vehicles’ seats. At present they source their requirements from Sri Lanka. Since many luminous car firms have set up their shops in India, chances are high that they will source from the local market in near future. Recently, China has also entered the coconut fibre market to purchase fibre for its mattress industry, says Mathew Thomas, an industry analyst.

The main input – coconut husk – is abundant in the country. An estimate shows that currently the country produces 3.5 lakh metric tones of coconut fibre annually, but the industry does not consume even half of it.

Until recently, the industry failed to lure cash-rich investors for two reasons. First, the human input was very high and secondly, the return on the investment was not so attractive. But the industry is slowly shedding its shabby appearance, thanks to mechanization of the process. This has made the investment in the sector more lucrative.

“When I started this unit nearly 40 years ago, 80 per cent of the work was done by the workers. With the introduction of machines, the ratio has been reversed and it has changed my fortune as well”, says Sadanandan, who runs a medium coir unit in Alappuzha, the heartland of coir industry in the country.

Now entrepreneurs do not find any difficulty in getting machines of their need as several companies are in the market. So de-husking to packing of valued-added finished goods can be done mechanically with minimum human input. Though Tamil Nadu, Karnataka and Orissa are late entrants in the coir industry, they have gone much ahead of major player Kerala where still many units, especially the small ones, resort conventional method. So their hand woven products find it difficult to compete with the tufted products produced by mechanized units in the market.

Coir Board is taking several steps to widen the contour of the market and familiarize the products with people.

“As market promotion strategies, we conduct fairs at various parts of the country, give ads in local print and media and runs retail outlets in the major cities of the country”, says the Coir Board spokesman.

But many are of the view that Coir Board is more focused on export market and only if we develop the domestic market, the industry can be insulated from shocks in overseas economy as it experiences now.

“Coir Board has to back domestic players also with some financial and other schemes as it does now to exporters. Only on level playing ground, the domestic players can perform well”, argues Sugunan who runs a de-fibring unit at Cherthala near Alappuzha.

It is an indisputable fact that the golden fibre offers golden opportunities to the investors. And the need of the hour is the genuine and judicious efforts from all parts to exploit it.

 

 

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