Industrial Dent

Industrial Dent

Valve and Cock Industry Dented by Slump

The ongoing economic deceleration and the resultant decline in industrial output have severely affected the valve and cock industry in Punjab. Domestic sales of SMEs in the sector have fallen by 25% to 30%, while the export growth has continued to take a plunge, falling by over 80%.

A steep decline in both domestic and overseas sales has dented the margins of nearly 300-350 valve and cock manufacturing units, mostly belonging to the SSI sector.

“Margins of small-scale cock and valve units have significantly eroded as demand in the international market has taken a big hit. Punjab valve exporters are also losing their competitive edge due to the cheaper products from China,” commented Pritam Sharma, CEO of Moudgil India, a small valve and cock manufacturing and exporting unit in Jalandhar and a member of Punjab Valves and Cocks Manufacturers Association.

Both India and China procure raw materials like brass and gun metal from European countries. However, China has an edge in the international market since it provides finished products at subsidised rates, while India's products are 25% to 30% costlier.

The high custom duties and tax levies on Indian import of raw materials increase the input cost significantly, pegging them behind their competitors in the global market. In view of the worsening market scenario, industry associations are seeking special packages to bail out the small-scale units from the crisis.

“The valve and cock industry of Punjab needs tax concessions and special benefits so that it can maintain its competitive edge. The lowering of excise duty from 7%-8% to 4%-5% will help small units cope with the ongoing downturn,” commented Pran Nath Bhalla, President of All India Valves and Cocks Manufacturers Association.

A number of valve and cock units in Punjab are planning to set up units in the cluster recently approved by the Ministry of MSMEs in order to enhance their competitiveness.

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About the Author

David Parks is a well known author and has written articles on SME Finance, B2B Portal, Trade Leads, suppliers, Manufactures and many other subjects.

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