Early bonus keeps workforce in good mood

Due to boom in textile and engineering sects, bonus has been given on time

The workforce in the textile and engineering sectors in the Coimbatore belt has begun to see the benefits of the boom in the region. The Diwali season, which is often marred by friction between workers and managements over the annual bonus payment, has passed off peacefully this year.

The trade union circle in the Coimbatore region is also in a jubilant mood as payment of bonus by a large number of mills was expedited without any hassles unlike last year. A large number of mills started disbursing bonus from the beginning of October.

Usually, the talks commence by the middle of October and the settlements are reached only a week before the festival. The same pattern repeated itself in the engineering industry.

Speaking to Business Standard, U K Vellingiri, general secretary of Coimbatore District General Engineering and Mechanical Workers' Union (affiliated to CITU), said because of the growth in export level of pumps from this region and the demand for submersible pumps on the rise, the engineering units are doing well.

"At this point of time, they don't want to lose their business by dragging the bonus issue, which at times may lead to strikes and lock-outs," he added.

Though the pattern was similar in the engineering and textile sectors, the two of them have not fared equally well. The textile sector seemed to have had a better year.

The reason may be attributed to the conducive climate in the textile industry. The opening up of the global market following the expiration of the quota regime from January 2005, easy availability of cotton at competitive prices and the remunerative prices realised for cotton yarn are the reasons behind the upbeat mood.

The price of cotton came down by seven per cent while the price of yarn went up by three per cent as compared to last year. Less competition in the domestic market also helped the textile mills, which were not export-oriented, in realising better prices for their yarns. The removal of excise duty of 9.2 per cent levied on cotton yarn also boosted the performance of the textile industry.

"On the raw material front, particularly cotton, Bt technology has improved the productivity from 330 kg per hectare to 440 kg per hectare. We expect the cotton production to go up by 270 lakh bales from 230 lakh bales in 2004," S V Arumugam, chairman, Southern India Mills Association (SIMA), told Business Standard.

In the engineering sector, although there was a 30 per cent growth in exports from Coimbatore and more players have come into existence in the manufacture of submersible pumpsets, the performance of the motor pumps industry in the organised sector in the region was not satisfactory during 2004-05, according to C R Swaminathan, president, Southern India Engineering Manufacturers' Association (SIEMA).

G Rajendran, managing director of CRI Pumps, told Business Standard, "There is a shift in the usage of products from monoblocks to submersible pumpsets due to the depletion in ground water level. The submersible pumps are the ones, which are moving fast in the market."

Till the late 1970s, Coimbatore had a market share of more than 70 per cent while it is only 45 to 50 per cent in the organised sector at present. Entrepreneurs had set up manufacturing units throughout the country in order to cater to the local markets, which has affected the city's market share.