Rising steel prices hit MH equipment
By A Business Correspondent
Material handling manufacturers are a worried lot because their problems are soaring everyday because of taxes, growing competition, poor quality of materials and now rising cost of raw materials, i.e. steel.
"Instability in steel prices is the greatest hazard against the growth of our business," aver N.B. Joshi, Senior General Manager, Millars India Ltd, and Sudhir Barve, Director, Smaco Engineering Pvt. Ltd. Most MH equipment manufacturers concur that prices of ferrous or non-ferrous metals should be reduced or at least stabilised. Government levies are high. MH equipment manufacturers have to pay approximately 16.32 per cent excise duty, 2 per cent educational cess, 15.3 per cent sales tax, 5 per cent octroi and 10 per cent service tax (depending on the states).
"Because of the instability in steel prices and high taxes our profit percentage is reduced or the cost of our products increases," Joshi points outs.
"We expect government support in the form of subsidies in taxes, water and electricity, good ports and transportation, besides quick documentation for export and import etc," adds R. Shetty, Director, Canara Engineers Pvt. Ltd.
The industry is demanding a revision of standards by the government for material handling equipment. The current standards are old though they are revised from time to time, but products lack aesthetic sense. Moreover, those players who have opted for collaboration, like Millars India Ltd with KULI, Italy, did not succeed as third party consultants rejected the resultant products which deviated from the standards (IS 3177 and IS 807) set by the Indian government.
Despite the problems there is reason for optimism. "More projects are coming up and exports are going up," Sudhir Barve of Smaco states. Adds N.B. Joshi of Millars India, "Since last year the government has launched new projects and funds are also coming in."
(Sept 16-30, 2004)