“There has been a drop in demand for their products and lower production capacities due to power cuts are hurting,” he said on the sidelines of a seminar organised by the Federation of Indian Chamber of Commerce and Industry here on Friday.
A majority of the firms were auto component suppliers while units engaged in manufacture of chemicals, plastics and leather products have also fallen to the tough business environment.
By the end of 2013-14, over 9.6 lakh micro, small and medium units existed in Chennai, according to data with the State Department of Industries and Commerce.
New registrations
While new registrations are on the rise year-on-year, there has been a substantial increase in the number of companies stopping operations, said an official with the Department of Industries and Commerce.
With a great deal of investment in machinery for making auto components for one particular company, stoppage of orders strike a blow to small units, said K Gopalakrishnan, President of Tamil Nadu Small and Tiny Industries Association.
“A reduction in orders from big automotive firms in Oragadam struck the component makers,” he said.
Restructuring of operations by factories of Daimler and Ford to suit the demand situation in the market have impacted small units. These industries would have benefited had there been a strong lobby to canvass their interests, he said. R Narayan, Chief Executive Officer, Power2SME, says the company’s business is to help small units obtain raw material at competitive pricing.
It connects MSMEs with suppliers on the web, eliminating intermediaries in the supply chain. It is also building a data registry for suppliers to identify buyers on the internet. Two years in operations, the company’s revenues increased to Rs. 65 crore in 2013-14, from Rs. 19 crore in the previous year.
