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`Pump manufacturers should rework business strategy'

Our Bureau

COIMBATORE, June 23

THE domestic pump industry, which is facing an onslaught from three different sources, will have to re-work its strategy if it were to survive in the new millennium, according to the outgoing President of the Southern India Engineering Manufacturers' Ass ociation (SIEMA), Coimbatore, Mr. R. R. Balasundharam.

The emerging trend also indicated that only those companies which had an efficient marketing set up and an array of products to cater to different segments would be able to perform well, he said in a statement.

He said the data collected from secondary sources on the performance of the pump industry in 1999-2000 in the region had not given a ``rosy picture''. Though domestic segment had reported growth, agricultural segment did not match the 1995-96 level. Prof itability had taken a beating because of the increased input cost, which was compounded by the inability of the industry to get higher price due to competition.

Mr. Balasundharam said what was of concern to the organised industry was the report from Andhra Pradesh, where in the last three years, only 1.37 lakh branded submersible pumpsets had been sold as against 2.45 lakh assembled kit sets.

This not only affected the market share of the organised sector, but imposed a heavy strain on the power front because of inefficient pumps. The State Government also lost heavily due to tax evasion.

Mr. Balasundharam said a few producers with marketing muscle were able to seize the opportunity in certain areas. But most of the units had not done well during last year.

The reality was only those units with efficient marketing network, sound financial strength, a good product-mix and cost-effective production have done well.

He felt that there were only two options for the survival of the industry. One was to identify a suitable partner and form a strategic alliance to be a sub-contractor. The other was to be content with existing performance and be ready to face even the `` worst conditions'.

He called for a serious thought on an action plan to face the challenges from multinationals, foreign brands and assembled kit manufacturers.