Business for Rajkot-based submersible pump manufacturers has seen a dip by over 50 per cent after Diwali on account of weak monsoon last year, which subsequently hit agricultural activity badly across the state.
According to industry sources, demand from farmers have seen 50-55 per cent reduction after Diwali last year and the industry is yet to come out of the slump period as sowing during Rabi and Kharif seasons witnessed substantial downfall.
"Farmers are direct users of our products and as monsoon in 2014 was erratic, there has been over 50 per cent reduction in purchase of submersible pumps by them. Consequently, many pump manufacturers in Rajkot have downsized production by 65 per cent after Diwali," said Jayesh Radadiya, director, Rajkot Engineering Association.
Dhirajlal Suvagiya, chairman and managing director of Falcon Pumps said, "Weak monsoon has disturbed the financial condition of farmers in Saurashtra and Kutch regions. If monsoon is good this year, we will be doing normal business."
With not much demand, many pump manufacturers have cut their working days from six days a week to five days a week over the past four months. Low demand has also resulted in liquidity crunch in the industry.
Generally, manufacturers give credit to dealers, who sell pumps to farmers on credit for a month or two.
Radadiya added, "Many pump manufacturers have extended credit limit for dealers. This has disturbed their financial conditions and expansion plans and purchase of new raw materials have been put on hold."
There are about 800-900 units manufacturing submersible pumps in Rajkot.
The industry reported an average turnover of Rs 1,400-1,500 crore in 2013-14. However, the turnover is not expected to exceed Rs 600 crore in 2014-15 because of the current slowdown. The industry provides direct employment to more than 10,000-12,000 people and indirectly employs over one lakh people.
