1. INTRODUCTION

1.1 Industry Scenario at National Level

There are an estimated six million Small Scale Industries (SSIs) in our country providing

employment to more than 20 million people. In Tamil Nadu alone there are about 1.5 lacs

SSIs as on date as against 3000 industries in 1961. The wet grinder sector is exclusively

reserved for manufacturing in the SSI sector.

There are approximately 700 units in Coimbatore, involved in the manufacturing of wet

grinders and their components. These units are located within a radius of about 25 km from

the centre of Coimbatore. It is estimated that this industry provides employment to 20,000

persons directly and 50,000 persons indirectly. Many of the raw materials except the stone

are being supplied from various parts of India. The finished product is distributed in various

cities through dealers and agents.

About 20 lakh Wet grinders are being manufactured every year in India. Out of these

around 75% are being produced in Coimbatore alone. The total turnover of this industry is

estimated to be around Rs. 300 crores per annum. Coimbatore cluster’s contribution is around

Rs. 225 crores per annum. About 80% of these wet grinders are being sold in the 4 southern

states viz Tamil Nadu, Andhra Pradesh, Karnataka and Kerala. Remaining 20% is being sold

in the other states of India as well as exported to the countries where Indians are living.

The industry has to make further advancement in the up gradation of technology in the

production area to meet both volume and quality demands. They produce various kinds of

grinders to meet out the expectations of the customers. These products meet the requirements

of the households as well as the hotel industry. The products mostly cater to the needs of

people who prefer south Indian foods.

1.2 About the Coimbatore Industries

The state of Tamil Nadu lies in the Southern part of India and is spread over an area of 1,

30,058 sq.km, with a population of 48 million people as per the 1981 census. Coimbatore is

one of the few big industrial towns of the state. It is popularly called as the “Manchester of

South India” as it has more than 350 spinning & weaving mills.

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There are nearly 40,000 registered and 10,000 unregistered Small Scale industries

functioning in and around Coimbatore, employing more than one lakh workers. Some of the

most famous industrial clusters of Coimbatore are Textiles, Motor, Pump sets, Foundry,

Power Loom, Hosiery, Agricultural Implements, Jewellery, Textile Machinery, etc. The

primary capital income of Tamil Nadu mainly depends on the industrial output of

Coimbatore, which is partly attributed to the entrepreneurial skills of this city. They account

for 25% of the total number of units in Tamil Nadu.

1.3 The Wet Grinder Cluster at Coimbatore.

Coimbatore has emerged as the natural wet grinder industry cluster due to the availability

of the natural stones suitable for wet grinders nearby. Many engineering and fabrication units

functioning in and around Coimbatore had started manufacturing wet grinders. Foundries,

mechanical fabrication units and electroplating units in and around Coimbatore supported this

cluster for its development. There are about 700 units in this cluster. This can be segregated

into three categories.

1. SSI Large - Composite Unit (50 Nos.)

2. SSI Medium – Assemblers (150 units)

3. Components (Motors, Drums, Castings, Stones, Arm sets, etc.) Suppliers (500 units)

The total turnover of the cluster is around Rs. 225 crores per annum. The product types and

their share in the market are

Conventional type - 60%

Tilting type - 10%

Table top - 20%

Commercial - 10%

In addition some of the following allied products are also manufactured

Potato peeler

Dough Kneader

Coconut scraper

Vegetable cutter

The cluster has got immense growth potential, provided some action plan is

implemented. The cluster was functioning in an unorganized manner due to high rate of sales

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tax at 12%. But the government has brought down this tax to about 4% is helping the cluster

to function in more organized manner.

1.4 Evolution of the Wet Grinder as Cluster

Wet grinder is a household appliance used for preparing batter, out of which most of

the South Indian dishes are prepared. Prior to the invention of mechanized wet grinders,

manual grinding stones were used for preparing batter. The batter is prepared by the grinding

action of a large stone, holding the ingredients in a pit, in which another stone of smaller size

is rotated. This was highly time consuming and involved lot of physical strains. So there

aroused a need for a electrical device to prepare the batter in a more convenient ways.

The wet grinder industry owes its genesis entirely to Coimbatore. In 1955, a team

headed by Mr. Sabapathy, ventured into modifying the traditional grinding stone with a

powered motor and base unit. Thus, was born the country’s first wet grinder. From then on,

the wet grinder industry has been largely confined to Coimbatore. This is primarily because

of the fact that the stone used for grinding batter is exclusively available only in this region.

Added to the natural abundance of the core raw material, the enterprising spirit of the

city, gave rise to a host of wet grinder and accessory manufacturers. The market for the wet

grinder industry is largely confined to the Southern states of India – vis-a-vis, Tamil Nadu,

Kerala, Karnataka and Andhra Pradesh. Following the large exodus of Indians to different

parts of the globe, the market is now witnessing a rapid growth in the international markets as

well. Now the wet grinders are exported to various countries like united states of America,

United Kingdom, Gulf countries, Singapore, Malaysia.

The industry is marked by a good supplier network that extends to several parts of the

country. Effective distribution networks support the sales and marketing activities. The

growth of the industry is also made more effective through monitoring and assistance lent by

support institutions.

2. OBJECTIVE OF THE STUDY

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3. WET GRINDER INDUSTRY –AN OVERVIEW

3.1 Structure of the Industry

Organized and Unorganized sectors

These industries have both organised and unorganised sector but majority of the

manufacturing units function in a unorganised manner. The major difference between the two

categories is outlined as follows

The organized sectors have a good infrastructure, necessary machinery and testing

equipments in house. In addition they are registered with various Government bodies and

associations which enables them to carry out their activities in a systematic manner.

The unorganized sectors are the ones who pick-up all the necessary components from

the nearby shops and do very little operations in house and assemble without any testing and

quality inspection. Most of their working is not systematic.

The organized sector have a structured and very good marketing channel and do

formal type of dealings whereas the unorganized sector target the low income group sector of

the market and mostly the transactions are informal in nature.

3.2 Raw Material Suppliers

The major components of the product are as given below:

a) Motor

b) Stone set

c) Drum

d) Cabinet (outer casing)

e) Armset

f) Gearbox

g) Belt and Pulley

h) Plastic components

i) Bearings

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These raw materials are obtained from the following areas:

The basic raw material, which is the grinding stone set, is procured from local

sources such as Salem, Palani, Uthukuli, Coimbatore, etc.

Stamping sheets used for making the stator and rotor of the motor is sourced from

Mumbai and Delhi markets by the dealers in Coimbatore and then supply to the

units.

Copper wire, which is used for winding the stator laminations, is another important

raw material. Only one unit is manufacturing it in Coimbatore. The remaining

quantity is sourced from Delhi market and supplied by the traders.

SS sheets used for making the drums are procured through various dealers from

Mumbai and other markets.

Two re-rolling mills situated in Coimbatore supply mild Steel angles. These are also

obtained from Salem and Vishakapattam.

ABS, which is the raw material for making tabletop grinders’ body, is supplied by

two companies in India. Distributors for these two companies are available in

Coimbatore.

The gear sets used in gearbox manufacturing are procured from North Indian

markets such as Mumbai, New Delhi, Kolkata and Ahmedabad.

The following are the groups of suppliers emerged under this industry.

a) Drum manufacturers

b) Motor manufacturers

c) Stone manufacturers

d) Plastic injection moulders

e) Arm-set manufacturers

f) Other component traders

Among the suppliers of drum, motor, stone and arm set, heavy competition is

existing, which brings down the price drastically. A cordial relationship exists between the

suppliers and the manufacturers.

Machinery suppliers

The machinery requirement for these units comprises of the lathes, hydraulic pressing

machine, drilling machine, slotting machine, cylindrical grinding machine, shaping machine,

milling machine, copper wire winding machine (manual / automatic) and motor testing

equipments. All the machines are of general purpose in nature and are provided by several

individual suppliers and manufacturers in Coimbatore. The more specialized machineries

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required are Plastic injection moulding machine and Aluminium pressure die casting

machine. All these machineries are available indigenously.

Component Traders

Ready-made components required for wet grinders such as capacitors, switches,

cables, etc. are obtained from traders having their shops and offices in the local commercial

markets in Coimbatore. The traders mostly source out parts such as stator, rotor die-castings,

copper wire, bearings, electrical fittings, etc. from Mumbai and Delhi markets and from other

parts of India.

3.3 Types of Wet Grinders

The following are the major types of wet grinders available in the market

Conventional Grinder

The conventional mechanised wet grinder was inspired from the traditional manual

wet grinder. The primary component, the stone and the mortar are made from a specific kind

of stone, found in abundance in the quarries surrounding Coimbatore.The mechanised wet

grinder of the conventional type consists of an electric motor that is mounted on a wooden or

plastic base. The base also houses the grinding stone and the mortar. A chain links the mortar

to the base unit and rotates in a faster and more efficient manner, as compared to the manual

rotating process.

The base stone is rotated using the pulley and belt mechanism, while the smaller stone

is held and rotated inside the pit though the arm set mechanism. The conventional

mechanised wet grinder was a boon in the times when electrically powered gadgets were

uncommon in the Indian kitchen. Soon, this grinder replaced the manual grinder, thus paving

the way for the growth of the conventional mechanised wet grinder industry.

The conventional wet grinder comes in capacities of 3 Litres, 4 litres and 5 litres. In

the current market conditions where there is a rise in nuclear and smaller families, the

conventional grinder is slowly being replaced by smaller grinders. However, the conventional

grinder still enjoys 60% of the market share in the wet grinder industry

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Commercial

With more and more women opting for career oriented lives, rather than restricting

themselves at home, the options in readymade home foods is becoming an increasingly viable

option. Readymade foods are seen more often on the tables of homes and this has given rise

to a spurt of growth in the food industry.

The idli and dosa varieties of foods have also been party to heralding the growth of

readymade foods in this part of the country. Packets of readymade batter are available in

virtually every grocery store and this has necessitated the production of wet grinders with a

larger capacity.

The commercial grinder segment in Coimbatore has witnessed a rapid growth in the

last couple of years. The primary target customers for this kind of grinder are the hotel

industry, and caterers. These grinders are also used in homes where the supply of batter on a

commercial basis has been opted as a revenue earning method. These grinders are also

becoming popular in retail batter selling outlets in other cities.

Commercial wet grinders are available in a wide range of capacities from 5 litres to

40 litres. Some manufacturers also cater to custom built products for select customers.

Apart from the use for food needs, the grinders are also being used in pharmaceutical

and chemical industries.

Table top

In 1995, the leading engineering medium scale unit, ELGI entered the wet grinder

market with the Table Top wet grinder. This was introduced primarily for the urban Indian

and nuclear families, where grinding has to be done in smaller quantities. With the emergence

of the table top grinder, the industry underwent a sea change and saw the beginning of an era

of competitive pricing and branding.

Today, there are several manufacturers who manufacture versions of the tabletop wet

grinder and the capacities are available in 2 litres and 3 litres models. The table top grinder

segment currently enjoys a 20% market share in the industry and poses a tremendous

opportunity in global markets where the Indian population is high.

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The table top wet grinder has been designed sheerly for ease of convenience and

offers added features like a detachable drum that can be stored in the refrigerators. The

tabletop grinder is priced higher than the conventional and tilting types, as it is designed with

trendy looking exteriors.

Tilting.

The tilting wet grinders makes the removal of bater very easy and it also helps to

clean the vessel very effectively. It currently enjoys 10% market share. The base stone in the

tilting wet grinder was replaced by a flat stone, whiles the grinding stone was substituted with

roller stone to make the grinding process easier. The combination of tilting and tabletop

grinder is now developed as tiling tapletop which is the result of the techonological

upgradation in this indusry

3.4 Support Institutions

Small Industries Service Institute (SISI)

Branch Small Industries Service Institute, Coimbatore is a Branch Office of Small

Industries Service Institute (SISI), Chennai. This is a field office of Small Industries

Development Organization (SIDO) under the Ministry of Small Scale Industries, Govt. of

India, New Delhi. SIDO acts as a policy formulating, coordinating and monitoring agency for

the development of Small Scale Industries at National level. It provides a wide range of

services through Small Industries Service Institutes and its Branch Offices.

I. Assistance to New Entrepreneurs and Existing SSI units

Testing Facilities offered to the small-scale industries are given below:

a) Electric Motor Testing (BIS recognized lab)

b) Pump Testing (BIS recognized lab)

c) Chemical Analysis (Ferrous & Nonferrous)

d) Sand Testing

e) Microstructure Analysis

f) Physical testing (Hardness, Tensile & Transverse)

g) CNC turning centre

h) Consultancy offered

i) ISO 9000, Energy audit, Project appraisal, Feasibility report

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II. Economic information service

Industrial potential survey, Market survey, Cluster study report, and Collection of statistics

III. Marketing assistance

Vendor development programme, Government store purchase programme, Participation in

exhibition, Exports promotion

District Industries Centre (DIC)

It is the State Government office for the promotion of small-scale industries sector.

The department is headed by the Commissioner of Industries and Commerce at Chennai and

the district office is headed by the General Manager.

The main functions of District Industries Centre are:

Issue of provisional SSI and permanent SSI registration certificates.

Conducting motivation and dissemination meets on industrial growth subjects.

Conducting of entrepreneurship development programme.

Helping SSI units to collect default payment from industries through the Regional

Facilitation Councils.

Motivate industries by giving them awards in various areas.

Providing loan for educated unemployed through the PMRY scheme.

NSIC (National Small Industries Corporation)

The NSIC was established in 1955 by the Government of India with a view to

promote, aid and foster the growth of small industries in the country. NSIC provides

diversified support through its wide spectrum of programme of SME’s to cater to their

different needs related to multi products and multi-locational markets.

SIDBI (Small Industries Development Bank of India)

It is a subsidiary of IDBI and started during the year 1990. The main objective of

SIDBI is to assist SSI and promote its growth.

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SIDBI offers:

Term loan to all tiny and SSI units through SFC and commercial banks by the way of

refinance.

Extending seed capital / soft loan assistance under NEF and Mahila Udyam Nidhi

scheme for SSI through specified agencies.

National equity fund scheme for SSI units.

Refinance scheme for acquisition of ISO 9000 services certificate by SSI units.

Schemes for financing activities relating to marketing of SSI products.

Scheme of direct assistance for development of industrial infrastructure for SSI sector.

Scheme for export bill financing.

Vendor development scheme.

Working capital term loan scheme for SSIs.

Credit guarantee fund scheme for small industries.

BIS (Bureau of Indian Standards)

In 1947, an organization by name Indian Standards Institution was set up which was

later made a statutory body and christened as Bureau of Indian Standards (BIS) in 1986. The

important activities of BIS include formulation of standards, product and quality system

certification, training, information service etc.

TIIC (Tamilnadu Industrial Investment Corporation)

TIIC is one of the premier state government financial institutions incorporated in

1949 to foster industrial development in the state of Tamilnadu. It provides financial

assistance catering to the needs of tiny, small and medium scale industrial units for

acquisition of fixed assets.

The various schemes available are:

Single window scheme.

Scheme for technology development and modernization.

National equity fund.

Marketing assistance scheme.

Scheme for warehouse / storage godown

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COWMA (Coimbatore Wet Grinders and Accessories Manufacturers Association)

Several wet grinder manufacturers came together and formed an association for

discussing and taking up common activities in 1995. Presently there are 400 members in the

association. It is taking up various social activities also. So far it has been representing the

Government in matters relating to Sales Tax, Central Excise, etc., now the association is

becoming more active for taking up common activities for the growth of the cluster.

CODISSIA (Coimbatore District Small Scale Industries Association)

CODISSIA started functioning in the year 1969 with 40 members and now the

membership strength is around 5000. The association serves for growth and prosperity of

industries and it has made a significant contribution towards building a strong and stable

industrial city of Coimbatore. The association besides functioning as a development oriented

association conducting series of seminars, training programmes, study tours, exhibitions,

industrial trade fairs, industrial visits, etc. so as to develop and create awareness among

industrial entrepreneurs.

CODISSIA represents in all advisory and grievance redressal forums for the small-

scale industries. The association along with SIEMA were very much instrumental for

SITARC to be established in the year 1986 with financial assistance of IDBI etc.,

It is recognized as one of the best testing centres for various activities. The association

is publishing its fortnightly journal (CODISSIA bulletin) from 1973 to disseminate valuable

information relating to industries to the members. CODISSIA has set up a permanent trade

fair complex at Coimbatore not only to conduct INTEC trade fairs comfortably but also to

help other trade fair organizers to use the infrastructural facilities for the betterment of the

trade and industry in Coimbatore.

SIEMA (The South India Engineering Manufacturers’ Association)

SIEMA was founded in 1952, with a sole aim of representing and protecting the

interest of small, medium and large scale engineering industries of this region. SIEMA was

founded in the year 1952, with only 20 members but now its strength is more than 500.

Most of its members are engaged in the manufacture of:

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Electric motors

Pumps

Submersible pump sets

Other engineering products

The main objective of the association is to inculcate awareness amongst the members.

Significant achievement of SIEMA is the awareness created amongst its members regarding

Quality Control. The association has close relationship with Bureau of Indian Standards in

connection with the formulation of Indian Standards connected with the agricultural pump

sets and motors. Considering this BIS, New Delhi has given representations in the Section

Committees. SIEMA is having representation in most of the local bodies. The association has

contributed a land measuring about 2 acres to SITARC in which the testing centre is now

functioning.

ICCI (Indian Chamber of Commerce and Industry)

It is a powerful chamber, which looks after the welfare and interest of the industrial

sector in the Coimbatore region.

Most of its functions are:

Lobbying with Government departments and representing on policy matters with the

Government.

Conducting meetings / seminars on various scenarios of industrial concerns.

TAPMA (Tamilnadu Pump and Motor Spares Manufacturers Association:

Constituted in the year 2000.

Total number of member around 100.

Mainly tiny units (investment within 25 lakhs) formed for mainly lobbying with Government

and to have co-ordination with the members in the association.

CII (Confederation of Indian Industry)

It is a powerful confederation in the national level. The main activities of the

confederation are lobbying with Government (State and Central) for the welfare of the

industry. It also conducts meetings and seminars on various scenarios in the context of

industrial growth of the country.

Commercial Banks

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The Lead Bank in this region is Canara Bank, All other nationalized banks are also

situated in and around Coimbatore. They provide finance for the concerns in various areas of

operation such as working capital, term loan and other assistance such as bill discounting,

extending cash credit facilities, etc.,

EEPC [Export Promotion Council (Engineering)

There is no office available at Coimbatore. For most of the activities regarding export

of engineering products have to be contacted at their regional office at Chennai.

SITARC (Small Industries Testing and Research Centre)

This centre was established in the year 1986. The total project cost for setting up the

lab was around 11 crores which was funded by various agencies like UNDP, Government of

India, IDBI and Government of Tamil Nadu.

The main activities are:

Testing of motors and pumps as per ISI standard (unit is recognized by BIS).

Testing of raw materials.

Provides quality awareness training and technical training.

Research & development in the area of energy efficient pumps.

3.5 Production Process

The production of wet grinders does not involve highly technical operations. But it

requires a degree of specialization in manufacturing the components required for wet

grinders. Simple machineries such as lathes, drilling machines, welding machines are

sufficient. Only few of the units are manufacturing all the components in house. Many units

are outsourcing the components from the suppliers. Specialized suppliers are available in

Coimbatore for every component being used in this industry. The production process in

general is given below:

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3.6 Testing

There is no IS specification available for wet grinders. But some of the motor

manufacturers have obtained IS marking license. These units are testing the motors as per the

relevant IS standards. The final product wet grinder is tested for its grinding performance,

running smoothness and safety. The manufacturers have developed their own method of

testing the product.

3.7 Marketing

There are about 200 units manufacturing wet grinders. Each unit has developed its

own marketing channel. There are no common marketing channels available for the cluster.

Some of the units are also exporting their products to other countries. These marketing

channels had been developed over a period by the respective units. Most of the units are

supplying directly to the showrooms. Others are supplying through agents who are selling

through dealers. The products are transported through various means such as train, lorries,

couriers, buses, etc. to various cities in India. Some agents come to Coimbatore to place

orders and take the product on their own. These traders develop a severe price competition

among the manufacturers.

The following are some common distribution channels

1) Manufacturer Branch Distributors Retailers

2) Manufacturer Distributors Showroom Retailers

3) Manufacturer Retailer

4) Manufacturer Agent Export

3.8 Units’ layout

Most of the units’ layout is in an unprofessional manner. Some of the leading units

have started professional methods of units’ layout and assembling section. Since these units

are located almost in all the areas of Coimbatore city, space is a constraint for them.

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3.9 Finance

Most of the units had been started with the own capital of the entrepreneurs. The cost

of plant and machinery is not heavy except in case of plastic injection moulding and

aluminium die-casting. Most of the marketing is done on credit basis. Hence lot of money is

locked in working capital. Since most of these units are functioning as unorganized sector,

availing of credit from banks is not easy.

3.10 Technology

The technology used in wet grinder manufacturing is the common one, which is

adopted in all engineering units. Simple processes like turning, drilling, plastic injection

moulding, aluminium die-casting, electroplating, SS polishing, motor winding, etc., are used.

No specialized technical process is used in this industry.

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4. RESEARCH METHODOLOGY

In this chapter, a brief description of the research methodology adopted in selection of

study area, selection of sample respondents, method of collection of data and various tools of

analysis used are presented and discussed.

4.1 Selection of Study Area

The study was conducted in Coimbatore city. Total of 50 respondents were made to

participate in the survey.

4.2 Collection of Data

Primary data were collected from sample respondents using a structured

questionnaire. All the respondents were chosen from various parts of Coimbatore city using

convenient random sampling. The purpose of the study was explained to the respondents so

as to get their co-operation. The data were collected from the sample respondents regarding

general characteristics like age, education, prospects and problems in the wet grinder

industry.

4.3 Period of the Study

Survey was conducted during the month of December 2008

4.4 Tools of Analysis

The data collected were coded, processed, classified and organized in order of

facilitate the analysis from which meaningful inferences could be drawn. To interpret the data

we have used Percentage Analysis. It is also supported by pictorial representations.

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5. ANALYSIS AND INTERPRETATION

Personal factors like age, gender, educational qualification are analysed to know the

impact of these factors on the wet grinder industry. The basic information like initial

investment, number of employees, type of organisation helps to know the generalised

characteristics of the cluster. The following statistical results were obtained on the analysis

of these key features.

5.1 Distribution of Respondents by Gender

Number Percent

Male 49 98

Female 1 2

Total 50 100

It was found that gender has a profound impact on this cluster. It can be inferred that this is

primarily a male dominant industry. The major reasons for this are:

It was found that majority of the respondents carry out this as a family business

wherein male heirs are given prior importance

This industry also requires much physical exertion which makes men the predominant

owners of this business.

5.1 Graphical Representation of Distribution of Respondents by Gender

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5.2 Distribution of Respondents by Age

Number Percent

Less than 30 3 6

31-40 17 34

41-50 23 46

More than 50 7 14

Total 50 100

It is inferred from the above table that 46% of the respondents are in the age group of 41 to

50 years. Nearly 34% are in the age group 31 to 40 years and meagre number of respondents

is below 30 years of age. It can be observed that this industry is rich in experience which will

serve as guidance for entrepreneurs in the future.

5.2 Graphical Representation of Distribution of Respondents by Age

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5.3 Distribution of Respondents by Educational Qualification

Number Percent

No formal education 5 10

School level 18 36

Under graduate 17 34

Post graduate 3 6

Others 7 14

Total 50 100

From the table it can be observed that nearly 46% of the respondents are not graduates.

Among them 10% of them do not have formal education at all. However it can be seen 40%

of them have good academic background. So it can be inferred that good educational

background is not mandatory for running business provided they are equipped with the

technical knowledge which can be learnt by experience.

5.3 Graphical Representation of Distribution of Respondents by

Educational Qualification

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5.4 Distribution of Respondents by Type of Organisation

Number Percent

Sole proprietorship 31 62

Partnership firm 19 38

Joint stock company 0 0

Total 50 100

Among the 50 organizations surveyed, it is found that 62% are sole proprietorship type of

organization. Remaining 38% are partnership firms and it is also found that there are no joint

stock companies surveyed. However among the partnership firms, almost half of the partners

are from the same family.

5.4 Graphical Representation of Distribution of Respondents by Type of

Organisation

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5.5 Distribution of Respondents Based on Exports

Number Percent

Yes 5 10

No 45 90

Total 50 100

As wet grinders are common household appliance for South Indians, the export market is

limited to the Indian origin people living abroad. Only 5% of our respondents cater to the

international markets by exporting. Among them 40% of the respondents export directly

while the remaining do so through dealers.

5.5 Graphical Representation of Distribution of Respondents Based on

Exports

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5.6 Distribution of respondents based on number of employees

Number Percent

Less than 10 32 64

10-25 14 28

>25 4 8

Total 50 100

The table reveals that around 92% of the organizations have less than 25 employees. Among

them 64% of the respondents have employees less than 10. As this cluster encompasses more

of small scale industries the requirement for the employees is also less.

5.6 Graphical Representation of Distribution of respondents based on

number of employees

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Initial Investment - Analysis

The initial investments of the companies vary on a wide range depending on two factors

Period the organization was started

Production capacity

The companies which were sarted couple of decades ago had a very low initial investement

of less than ten thousand rupees. The companies which were started later in the 80s and 90s

had higher investments ranging from 10000 to 1 lakh. A few companies which were started in

recent years (after 2000) have invested more than 1 lakh. This is due to the fact these new

companies have to start with higher production capacity to be competent with the existing

established organizations.

Motivational Factors for Entering This Industry

The primary factor that influenced people to enter this industry is due to its

origination in this locality. As it was invented here it served as an inspiration and motivation

for people in and around Coimbatore to venture in to this industry.

It is generally believed that people of Coimbatore have natural flair for

entrepreneurship. They are ready to take up challenges and prove themselves. They are

continuously proving that they are good players in business because of their sound

managerial skills and administrative capabilities.

One of the most important factors that influenced the development of this industry as

a cluster in Coimbatore is due to the availability of raw materials in nearby localities. This

has been agreed upon by every one of the respondents.

Coimbatore is a hub of manufacturing industries. It has many clusters like textiles,

motors and pumps, foundries etc. As the main raw material in the manufacturing process is

motors, the people who had the knowledge of motors found wet grinder industry to be a

profitable venture.

The success of established companies motivated the ambitious entrepreneurs to start

this industry. Wet grinder being natural cluster also played a significant role. They also

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believed that this industry will have good scope in the future as new markets are being

tapped.

A few people entered this industry as their academic qualification like diploma in

industrial training and mechanical engineering matched their interest. The experience of the

people who worked in the industry also motivated them. Most of the small players started an

organisation to supplement their income.

Competition

Initially when the industry was started the demand was high for the hand operated

grinding stones. They found it difficult to change the mindset of the people as they were

reluctant to switch to wet grinders. The purchasing power was also less. After gaining a

considerable share in the market they faced competition from the local players. So majority

of them feel that they face competition locally. But in recent years there are competitors

emerging in others parts of Tamilnadu like Madurai, Chennai etc.

Reasons for Coimbatore Being a Cluster for Wet Grinders

The following are the important reasons for the emergence of wet grinders as a cluster

in Coimbatore:

Its origin in Coimbatore

Availability of raw materials – easy access to the basic raw material - stones

Availability of skilled labours

Economical – Cost of production is less

Hub of industries

Renowned manufacturers of motors

Wet grinder industry was booming

Availability of good infrastructure

No constraints for investments

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5.7 Distribution of Respondents by their views on the Demand for Wet

Grinders

Number Percent

Stable 23 46

Increasing 21 42

Decreasing 1 2

Fluctuating 5 10

Total 50 100

Among the 50 respondents, 46% feels that the demand for wet grinders is stable.

While 42% is optimistic about the demand, a meagre 2% feels that the demand is decreasing.

10% of them feel that the demand depends on the season and market conditions. The season

for wet grinders is during diwali and pongal festivals in Tamilnadu, dusara in Karnataka and

onam in Kerala. They also feel that they have a good demand during marriage seasons.

5.7 Graphical Representation of Distribution of Respondents by their views

on the Demand for Wet Grinders

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Political Pressure, Government Regulations and Policies

All the respondents gave a unanimous opinion that there is no political pressure for

this industry.

In respect to the government regulation, majority of the respondents is thankful to the

government for the tax reduction. Previously the sales tax for wet grinders was at 12.5%

which increased price of the product and it reduced profit margin. But after the introduction

of Value Added Tax (VAT) the tax rate was reduced to 4%.

Expectations from the government

1. They expect the government to take initiative in the reduction of central sales tax.

2. The government can fix the prices of some of the raw materials to avoid speculation.

3. They look forward for an industrial estate to be set up by the government for this

industry.

4. If the government could implement centralised buying of raw materials, the cost of

production can be brought down.

5. They also expect subsidy from the government to support them in setting up research

and development centres.

6. If the government could introduce schemes like free wet grinders to the needy, it will

increase the demand for the product.

7. The government can provide better financial support to this industry.

Promotional Strategy

Only 10% to 20% of the respondents adopt promotional strategies like advertisements

and participating in trade fairs. The others feel that it is not economical to spend for

advertisements as it does not give expected increase in sales. They prefer convincing dealers

as a better option to promote their products. Even the organisations who adopt promotional

strategies do not indulge directly but they do it through their dealers. Most of the

manufacturers are not particular that their brand should be recognised, so they prefer

dealership.

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Major Problems of the Industry

In spite of ease of availability of raw materials, pricing of raw materials is a matter of

serious consideration. Due to lack of fixed pricing measures, the prices are determined by

the whims and fancies of the suppliers.

There is scarcity in basic raw material stone, during rainy season as the production

process of extraction of stone stagnates in quarries

Almost all the companies find it difficult to retain their employees. So they are

required to bring employees from various parts of India and provide them with various

facilities which include accommodation, food, etc. That adds to the cost of production. To

overcome this, Some of them even employ workers on contract basis(contingent work

force)

Due to high attrition rate the employees are often hired and trained. Besides increasing

the cost of production it is also time consuming

Due to frequent power failure in last few months , the production pace suffered a

dramatic slow down so manufacturers were not able to deliver the products to dealers on

promised time

The industry requires frequent up gradation of technology but the resources currently

available inadequate

If a new technology is introduced in the market, all the organisations have to adopt the

technology to remain competent.

Manufacturers are forced to sell their products to dealers on credit basis. This depletes

the availability of working capital. Chances of bad debts are high.

There is no standard measure of quality as far as wet grinders are concerned.

Customers cannot differentiate the product based on quality. This acts as a de-motivator to

manufacturers producing better quality products.

Most of the producers operate business in an unorganised manner, which hinders the

growth of the wet grinder industry itself.

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FUTURE OF THE WET GRINDER INDUSTRY

Wet grinders have become a necessary in all the households in South India.

It is estimated that for every 4 persons there is a need of one wet grinder. So the demand

for the wet grinders will always increase in south India. Now it is becoming more popular

in north India also. It is expected that the demand will considerably increase in the years to

come. So the future is highly optimistic for this industry.

SWOT ANALYSIS

Strength

This is a product invented, designed and developed at Coimbatore

The food habit of South Indians creates the market demand.

This is a natural cluster developed on its own at Coimbatore.

This cluster does not exist anywhere else in the world.

Availability of the main raw material i.e., stone suitable for wet grinders locally.

Availability of a strong, skilled labour force.

Strong reputation for Coimbatore made wet grinders in the domestic market.

Presence of well-developed industry clusters such as motors, foundry, electroplating,

stone machining, etc., which can supply components to this industry.

Presence of a large number of technical institutions in Coimbatore.

Location of the cluster in a well-developed city having a good infrastructure.

Availability of good transport linkages – 3 National Highways, 1 airport, railways and

many state highways.

Presence of most of the offices of Central and State Government Departments and

developmental agencies.

Weakness

Unprofessional way of management.

Weak marketing linkages – absence of organized marketing channels.

Most of the raw materials except the stone are bought from outside states.

The traders do Price fixation.

Non-availability of quality standard.

Usage of low quality raw materials.

Cut throat price competition among the manufacturers.

Non-employment of BDS providers.

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Poor packaging techniques.

Exploitation of export marketing opportunities by the traders.

Absence of a technical analysis of the product and professional design.

Opportunities

Improving the product quality of the cluster through standardization of the product.

Creation of new market avenues for the product by educating the people.

Development of an exclusive motor and gear box through R & D.

Dissemination of new methods of production among the entrepreneurs.

Introduction of new technologies for improving the product.

Common procurement of raw materials for availing price benefits.

Threats

Entry of a new technology in the product

Supply of finished components to other cities for assembling and thereby creating

competition to the cluster.

Emergence of new clusters in other cities where local market is available.

Practicing of informal business methods.

Chance of a large-scale manufacturer entering the market.

Unexpected threats coming from outside countries due to WTO.

6. FINDINGS AND SUGGESTION

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Findings

Though it is inferred that 98% of the proprietors where men, few organisations are

administered by women.

Majority of the companies where started in early eighties. There are more companies

is entering the field every year.

All the organisations in this industry fall under small scale sector with majority of

organisations employing less than 10 employees and rest not exceeding 25 employees

Export does not play a vital role. Only very few organisations export and is expected

to increase in future.

Wet grinder had its origin in Coimbatore which was the basic factor that motivated

many entrepreneurs to start this business.

Competition is basically from manufacturers in and around Coimbatore.

Very important change witnessed by the industry is change in technology.

The major problem faced by the industry is it is functioning as an un organised sector

that calls for remedial measures.

It is found that the demand for the product is constantly increasing.

Due to change in life style , people prefer compact and tilting wet grinder models.

There is a contrary view among the respondents regarding financial support offered

by the banks, few respondents claim if credibility is proved bank are ready to offer

loans while

There is no political pressure particularly imposed on this industry

Tax reduction from 12.5% to 4% has been a boon to this industry

There is a high attrition rate. All the manufacturers more or less face the similar

problem

Promotional strategies like advertisements are not fruitful.

COWMA- Coimbatore wet grinder manufacturer association plays a significant role

in development of this industry as a cluster

The industry has a bright future as it is venturing into new markets

Suggestions

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The wet grinder cluster at Coimbatore has developed on its own without any external

help so far. This cluster has got tremendous growth potential if a proper guidance is given.

The main areas of strategic interventions shall be

Technology up-gradation.

Creating new markets.

Taping the export potential.

Making the cluster an organized one.

Representing to the Government for rationalizing the tax.

Developing common branding for the product.

Promoting a common website.

Product standardization.

Improving the quality of wet grinders through usage of energy saving components

Development of an exclusive motor for the use in wet grinders through R & D.

Development of ISI standard for wet grinders in association with BIS.

Quality improvement through ISO 9000 implementation

7. CONCLUSION

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