1

Current Status of the Coir Industry in Kerala:

A Critique (2015)

Draft Report
(for comments and corrections)

February, 2016

Prepared by:

Kerala Institute of Labour and Employment ( KILE)

Thozhil Bhavan, Vikas Bhavan,
Thiruvananthapuram
 2
Contents

Page
No

Preface

Chapter I Introduction ……………………………………………………………………. 1

Chapter II Coir Manufacturing Companies ………………………………………….. 19

Chapter III Coir Cooperative Societies ………………………………………………... 57

Chapter IV Small-scale and Household units ………………………………………… 109

Chapter V Observations and Recommendations ………………………………… 116

Appendix A References

Appendix B Bibliography

Appendix C1 Interview Schedule for Cooperative

Coir Mattings Society

Appendix C2 Interview Schedule for Private Entrepreneurs

Appendix C3 Questionnaire for Mats and Matting Units

Appendix D XIIth Five Year Plan of Kerala

Appendix E Innovation in Coir Products

Appendix F Evaluation Study of Domestic Market

Development Assistance Scheme implemented
by Coir Board (2008)
By APITCO Ltd. Engineering Growth

Appendix G Schemes of the Governments (GoK & GoI) for

the Promotion of Coir Industry in Kerala

Appendix H Coir Kerala 2016

Appendix I Tabulated Data and Interpretation

 3

List of Abbreviations

AACC : Anathalavattom Anandan Coir Commission

ASI : Annual Survey of Industries
CBS : Coir Board Study
CFC : Common Facility Center
CCRI : Central Coir research Institute
CICT : Central Institute of Coir Technology
CIRC : Coir Industrial Relations Committee

COIRFED : The Kerala State Co-operative Coir Marketing

Federation
CSES : Centre for the Study of Economy and Society
CVCS : Coir Vyavasaya Cooperative Society
FICEA : Federation of Indian Coir Exporters Associations
FOMIL : Foam Matgtings India Limited
GoI : Government of India
GoK : Government of Kerala
ICDP : Integrated Coir Development Project
KITCO : Kerala Industrial and Technical Consultancy
Organisation
MDA : Market Development Assistance
MMS : Mats and Mattings Societies
MNREGS : Mahatma Gandhi National Rural Employment
Guarantee Scheme
MSME : Micro, Small and Medium Enterprise
PMI : Production Marketing Incentive
PPES : Purchase Price (Enforcement) Scheme
PPSS : Purchase Price Stabilisation scheme
TN : Tamil Nadu
TVCS : Thondu Vyavasaya Cooperative Society
 4
List of Tables

Table Page
Title
No. No.
1.1 Details of the amount spent for the various coir promotion schemes by
the Coir Development Department from 2010-11 to 2015 March 1

1.2 Proforma: Export of Coir and Coir Products by Coir Public Sector
Undertakings/Coirfed 18

2.1 Current Status of Fiber Export 21

2.2 Wage comparison (based on DA increase ) of daily paid workers
including benefits - Mar '13 & June '15 24

2.3 Details of Minimum Wages of Various Industries of Kerala –

1st March 2013 Vs 1st July 15 25

2.4 Quarterly wage comparison on DA increase- Coir Vs Plantation industries

– March 2013 to June 2015 27

2.5 Quarterly wage comparison on DA increase- Coir Vs Traditional industries

– March 2013 to June 2015 29

2.6 Comparison of Fixed & Variable component in wages – Coir Vs.

Traditional Industries – March '13 & June '15 31

2.7 Purchase price increase of Handloom Mats Vs. Coir Tufted PVC Mats from
2007 to 2014 37

2.8 Price difference / Sq.ft between BC1 Mats Vs. Coir Tufted PVC Mats from
2007 to 2014 37

2.9 India's Exports of Coir and Coir Products from 1995-96 to 2014-15 38 -41
th
2.10 List of Tufters as on 18 Aug. 2015 42
2.11 Estimated number of workers in the coir Industry 43
2.12 Wages - Daily Rated comparison as on 1st Mar. '13 Vs. 1st July. '1 45 & 46
3.1
Coir Cooperative Societies in Kerala 58 & 59
3.2 Proforma: Activities of Coir Co-operative Societies 60
3.3 Details of Coir Projects in Kerala and Kollam circle 65
3.4 Functional Classification –Category-wise 2014-15 Kollam Circle 66
3.5 Operational Summary of CVCS, Kollam Circle 67
3.6 Statement of Output, Kollam Circle (2005-06 to 2014-15) 68
3.7 Stock turnover ratio of Coir Co-operative Society in Kundara Circle 69
3.8
Comparative Income Statement of Vellimon CVCS No. 293
70
for the year ended 2014 and 2015
3.9
Performance Evaluation Statement of CVCS (Kundara Circle) 2013-14 72 & 73
3.10 75 &76
Statement of Labour Efficiency of CVCS Kundara Circle 2014-15
3.11 Gross Profit/Loss of Coir Co-operative Societies in Karunagapally circle 78 & 79
3.12
Stock turnover ratio of Coir Co-operative Societies in Karunagapally circle 79 & 80 5
3.13
Comparative Income Statement of Aadhinadu North CVCS No. 488 for
81
the year ended 2014 and 2015
3.14 Statement of Labour Efficiency (2014-15) Circle: Karunagapally 82
3.15
Statement of profit or loss for the year 2014-15
84 & 85
(CVCS Karunagapally Circle)
3.16
Summarised Report of Alappuzha Coir Project 2014-15 87
3.17 Volume of Production, Sales and Profit 2014-15: CVCS Cherthala Circle 88
3.18
Comparative Functional Statement of CVCS Under Cherthala Circle 88
3.19
Current Status of Cooperative Societies 105
4.1 Proforma: Product Sector: Mats & Mattings & Small-scale Producer
112
Cooperatives

List of Diagrams

Diagram Page
Title
No. No.
2.1 Quarterly wage comparison on DA increase- Coir Vs Plantation 28
industries – March 2013 to June 2015
2.2 Quarterly wage comparison on DA increase- Coir Vs 30
Traditional industries – March 2013 to June 2015

2.3 Comparison of Fixed & Variable component in wages - Coir Vs. 32

Traditional Industries – March '13, 2015

2.4 Comparison of Fixed & Variable component in wages – Coir 33

Vs. Traditional Industries – June '15, 2015
2.5 Comparison - Cost of Raw Material & Labour in Handloom 34
2.6 Comparison - Cost of Raw Material & Labour in Machine- 35
made
2.7 Price Comparison between Handloom Coir Mats & Coir Tufted 36
PVC Mats (2007 to 2014)
2.8 Estimated number of workers in the coir Industry 44
3.1 Internal Factors Adversely Impacting on Cooperative Societies 107
3.2 External Factors Adversely Impacting on Cooperative Societies 108
5.1 Automatic Spinning Unit 121
 Preface 6
The study is conceived not as a typical academic research project. Rather,
this is more of a fact-finding investigation – just to assess the current status of the
coir industry in Kerala, understand its needs and problems and suggest feasible
remedial measures. It is a diagnostic study of cause-effect relationships: why a
good number of cooperative societies and small units have failed or struggling to
survive and at the same time, how some of them are financially stable and
prosperous and ensure 20-25 days of work per month and regular payment. The
project tries to learn lessons from the experiences of a good number of primary
stakeholders in the industry.
Likewise, the large organized industrial units in and around Alapuzha suffers
from restrictions unwittingly imposed by the powerful trade unions in respect of
mechanization, optimization of production and productivity and profitability.
The study also examines the large number of household units engaged in
retting, beating and spinning and understand their needs. The focus is on primary
data collected directly from the various units through personal interactive sessions.
This will be supplemented and complemented with the facts and figures obtained
from the leaders of trade unions, Coir Inspectors, officials of Coirfed, Coir Board,
Coir Development Department, Federation of Indian Coir Exporters Associations
(FICEA) and other related institutions.
The Central and the State Governments have done a lot to put the coir
industry on the right track. Somehow or other, the performance of the industry
except the large units is somewhat disappointing and a good number of workers
have lost their jobs and wages. Something is amiss in the management of the coir
industry by those who are in charge of it, at the grassroots level. This investigation
intends to find out the stark ground realities.
A good number of studies have already been undertaken by the Commissions
appointed by the Government, Ph.D scholars, Coir Board and a host of others
regarding the various aspects of the coir industry in Kerala and in other states.
Among them, studies conducted since 2000 have been gone through thoroughly and
their findings are examined. Their findings are very valuable since they reflect the
field realities. These were verified in the field and if found to exist even now, they
were considered for analysis. Many of their recommendations are found to be very
relevant and pragmatic and hence, they are accepted with acknowledgments and
gratitude.
The theoretical framework of the study consists of entrepreneurship and
principles and norms of modern business management. The traditional industrial
sectors such as coir, cashew, handloom, bamboo, pottery and handy-crafts should
not be and could not be looked at as sectors ever depending upon the special
charity of the government. At best, the government can provide the infrastructural
facilities and the initial capital.
 7

Chapter I

Introduction

1.1 The background

Coir which is known as “the golden fiber”, is put to a variety of uses, both
industrial and agricultural. Coir industry is perhaps the largest industry in the
coastal villages of Kerala. The State, with its favourable ecological setting,
abundant supply of coconut, and skilled labour, has provided the conditions
necessary for its growth and development.

The process of production begins with de-husking, which is largely

concentrated in Kerala, as this State produces sufficient quantity of nuts (4,886
million nuts) in 2014-15. (The Hindu, dt., 28-04-2015) In addition to this,
facilities like lakes and lagoons for retting the husk and the availability of
traditional expertise of the people in coir work also added to the phenomenal
growth of the industry in Kerala.

History tells that ancient Greece, Egypt and Rome used coir ropes made in
Kerala for the construction of houses, citadels, ship mast and mansions. It was
with the arrival of the Portguese in Kerala that the coir trade spread to the
European countries. The British interest on Kerala's coir products made them
conduct an exhibition on coir products in London in 1851.

The industry is comprised of fiber making, yarn making, mats and

mattings, rubber backed mats, synthetic backed mats, rubberised beds and
various other useful products.

The first coir factory in the country was started in 1854 by an Irish man
named James Darragh, at Kulachal and Alappuzha. The factory was named,
“James Darragh, Smail & Co. Ltd.” with its registered offices in London and New
York. The success of Darragh's company attracted many enterprising
businessmen to Kerala to set up similar factories in the State for production and
export. In course of time, demand for coir and coir products increased and
several coir factories in and around Alappuzha came into existence.
 After Independence (1947), the foreigners left the coir scene and most of8
the large factories were closed down. Some of them were taken over by the
workers’ unions themselves and re-oragnised on cooperative basis. But, lack of
competence of workers to manage the units on commercial basis affected the
growth of the coir sector. Coir exports dwindled. Large number of workers lost
their employment. (V.S. Jose 2002)

One-third of the villages in the State may be called as ‘coir villages’ and
one-third of land in Kerala is used for coconut cultivation (Coir Board, 2001; GoK,
2009). The industry attracts considerable budgetary support each year from the
State and the Central Governments and is also a large earner of revenue through
export. In the last financial year, (2013-14) coir & coir products generated about
1630 crores worth of foreign exchange. (Federation of Indian Coir Exporters Associations
(FICEA)

The household units are engaged mostly in spinning, weaving and fiber
extraction work; of which spinning accounts for 75% of household employment
in the industry. The characteristic of this industry is that it is traditional, labour
intensive and of a self-employed production structure. It has become the main
source of non-agricultural employment in the region in the nineteenth and
twentieth centuries (Isaac et al., 1992).

Though modernisation and innovations were introduced in the industry

across the twentieth century, the response to mechanisation has been negative
in Kerala, during most of these decades. The resistance to mechanisation and
large-firm entrepreneurships was at its height from the 1950s to the 1980s,
threatening to escort the industry into a long-term technology lock-in. For the
local trade unions, efforts at mechanisation actually became the ‘struggle’ against
labour displacement within ‘capitalist’ mode of production. So strong was the
trade union movement in this industry, that most of the literature finds it hard to
separate the analysis of technological change in coir from the saga of trade
union movement in the State.

From the late 1990s onwards, trade unionism and the coir industry in
Kerala slowly began weakening their bond – not out of any ideological defeat,
but out of desperation in the industry. Though not a contemporary work, Isaac
et al. (1992) is a useful reference for a detailed description of the evolution of
technologies for the production of coir fiber. This work also critiques the
feasibility of each innovation of synthetic substitutes, far more attractive and less
expensive, signalled that only a huge overhaul in the coir industry could save it
from the eventual replacement of coir by these substitutes. Also, severe
shortages of coconut husks (the chief source of the fiber) and a shortage of
young new labour willing to work in this industry gave a further inevitability to
consider modernisation very seriously. Due to these two factors, the coir industry
slowly became by the 1990s, a ‘sick’ traditional industry. (Anant Kamath, 2009)
 9
The industry that earlier vociferously resisted technical change and prided
on its traditional technologies, now saw itself in critical need for innovation in
production techniques. Earning, being on a piece-rate basis, depended principally
on productivity, thus necessitating new technologies in place of (or in harmony
with) older traditional techniques. By the end of the 1990s, the only path to
survival appeared to lay through technological advancement in machinery and in
process innovations as well as product innovations.

Introduction of technological change since then has been more of a top-

down approach in Kerala, and has only superficially reached the household
sector – the broadest part of the industry. In fact, a comprehensive survey of the
coir industry by the Centre for the Study of Economy and Society (CSES) in 2008
showed that the majority of households in the State used mostly intermediate
technologies, despite the highly subsidised availability and rigorous promotion of
advanced innovations across all stages of coir fiber production.

The interesting twist to the tale of the coir industry in Kerala arose in the
decade after the 1990s. It was discovered that the solution for survival and
prosperity of coir in Kerala lay not only in process innovations, but also in
product innovations in the domestic and industrial applications of the fiber and
by-products of its production. Until the beginning of the decade, most R&D
focused on process innovations at each stage of production of the fiber:

1. Bio-chemical treatment was introduced to replace the polluting and

drudgingly slow traditional method of retting (ie. submerging large
numbers of coconut husks, bound together, in fresh water for eight
to ten months to loosen fibers from the coconut shell).
2. De-fibering machines were introduced to eliminate the unhygienic
and potentially dangerous method of manually beating away the
fiber from the husk by hand after the retting process; and
3. Spinning machines were introduced whereby, the spinner could
simply sit down rather than walk lengthy hours a day in front of
hand-operated spinning wheels, spinning the yarn from fiber that
was extracted from the coconut after retting and beating.

It was assumed that introduction of innovations in each major stage of

creation of coir yarn would result on the whole production process eventually
becoming mechanised and more efficient. Earlier studies (Isaac et al., 1992;
Rammohan, 1999) focused on the economics of the process innovations such as
these, while newer studies and policy documents (Coir Board, 2001; Rajan and
Kumar, 2004; GoK, 2009) highlight the product innovations in the coir fiber itself.
(Anant Kamath, 2009)
 10

1.2 The problem and its significance

In spite of various promotional agencies such as the Coir Board (1953),

Coirfed (1979), Kerala State Coir Corporation (1969), the Directorate of Coir
Development and other support systems, the State Government feels that the
coir industry is somewhat in a crisis situation at present except the large
organized units.

DR. K.S. Manoj, MP in the Indian Parliament on 21 March, 2005 spoke

about the declining trend in the coir industry in Kerala:

“I would like to draw the attention of the Parliament as well as the Hon.
Minister for Agro and Rural Industries to the sad plight of the traditional coir
factory workers in Kerala. There are about four lakhs coir workers out of which
two lakhs are women. They are working in the traditional sector. There are about
12,000 coir factory co-operative societies. But the future of these coir factory co-
operative societies and also those who are working in these factories is in
danger.

“Sir, formerly, in order to facilitate production and marketing of coir

products, subsidies and rebates were given, but now all the rebates and
subsidies are withdrawn. Instead of rebates, MDA, that is, Marketing
Development Assistance is given. But this is not given timely. These co-operative
societies are not allowed to use the MDA for their day-to-day activities. So, I
urge upon the Government that instead of MDA, rebate should be given. Also,
formerly, there was minimum export price as well as minimum purchase price for
the coir products, but now it is not there. So, the small-scale manufacturers as
well as the co-operative societies have to give their products at a very low price.
The exporters make them sell their products at a very low price. So, I urge upon
the Government that minimum export price as well as minimum purchase price
for the coir products should be re-instituted, and instead of MDA, rebates should
be given to the coir products.”

Inaugurating a national seminar on “Possibilities for Coir Co-operative

Sector” at Coir Kerala 2014 by Sri. K.C. Venugopal, Minister, Central Government
said that the coir societies play a major role in ensuring jobs to lakhs of coir
workers.
 11

“We need to seriously probe the reasons why the benefits are not
reaching the coir workers. The Public Sector Undertakings (PSUs) like Coirfed
and Coir Corporation should devise measures to help the coir societies which are
the lifeline of the traditional coir industry,” he said.

The Minister suggested that the Coirfed should consider allocating mobile
fiber extraction machines to the coir societies and help them explore innovations
in coir products. He also suggested increasing the work days of coir workers in a
month. “Workers are complaining that they are getting work only for five days in
a month. We need to increase the number of work days to ensure that they get
a decent wage to run their family,” he added.

The coir cooperatives comprising about 800 and odd units, did not prosper
in spite of strong financial support and direct supervision by the State Coir
Development Department. The same can be said about the 9000 and odd small
units as well as the large number of household units. The daily wage is as low
as – Rs. 250 – 300 per day, the number of working days per month is less than
20, production and labour productivity is low due to manual labour, bereft of
machinery and modern tools and lack of business perspectives and skills among
the primary and secondary stakeholders. Job opportunities in the sector are
declining and the younger generation is reluctant to take up work in the coir
sector. The situation is further complicated by shortage of husks at present and
stiff competition from Tamil Nadu, Karnataka and Andhra Pradesh.

A diagnostic analysis of the crisis in the coir sector is necessary in order to

arrest its decline and disintegration. Factors (variables) that are responsible for
the crisis – internal and external need to be identified and eliminated.

1.3 Objectives of the study

1. To assess the current status of the coir industry in Kerala and examine
whether the industry is progressing or declining in terms of certain
standard parameters. The economics at the micro, meso and the
macro levels of the industry will be thoroughly studied from a business
point of view.
2. To identify the positive and the negative factors (variables) which
impact on the industry and its business prospects. In this respect, the
functioning of the various promoting institutions such as the Coir
Board, Coirfed, Coir Development Department, Coir Co-operative
Societies etc. will be looked into.
 12
3. To examine the scope for mechanizing and modernizing the coir
industry, appropriate to the micro, meso and macro levels to enhance
productivity and profitability
4. To assess the wage structure and other benefits enjoyed by the
workers of the various sub-sectors of the coir industry and examine
their adequacy vis a vis the productivity of labour and the paying
capacity of the units
5. To elicit the view points of the various primary and secondary
stakeholders of the industry for developing appropriate strategies and
support systems to rejuvenate the industry and ensure job security
and prosperity for the stakeholders.

1.4 Basic Questions

1. What is the need for enrolling 600 – 900 share holders in a typical coir
cooperative society while the number of actual workers directly
engaged in production is less than 20 and the average number of
working days is also less than 20 per month?
2. One of the chronic grievances among the small-scale and household
units is that the market price of their products is so low that their net
gain is rendered very low and hence, insufficient and unattractive. In
this context, it is necessary to find out, who is controlling and fixing
the price of coir products in the internal market?
3. What are the local factors that motivate or compel the big coir
factories in the Alappuzha – Cherthala belt to set up branch units in
the Pollachi – Thoothukudi industrial corridor?
4. In spite of diseases such as mandari, kattuveezhcha, coombu cheeyal,
manjalippu, Kerala produces sufficient nuts and husks for the coir
industry. Yet, what is it that prevents the local coir producers from
mobilizing and procuring sufficient husks from the households and the
large number of copra units?

These objectives, basic questions and the methodology given in the

project proposal were presented first at a meeting of the representatives of the
managements of big organized coir units and later, at a meeting of a group of
senior union leaders who are active in the coir sector. Their suggestions were
accepted and incorporated.
 13
1.5 Theoretical background of the study
As indicated earlier, the coir industry in Kerala, except the large organized
ones, is in a crisis situation. The cooperative sector consisting of about 800 and
odd units, the small-scale sector consisting of about 10,000 units and the public
sector units such as Foam Mattings (India) Limited (FOMIL), units of Coirfed etc.
are in difficulties. Most of these units were prosperous in the beginning but
slowly started declining due to various factors – frequent increase in the price of
raw materials, increase in the cost of production leading to low productivity, lack
of appropriate mechanization, non-availability of labour when required, mismatch
between the cost of production per unit and the price of products in the market
and competition from Tamil Nadu and other states. In other words, the coir
sector except the large ones, is on the verge of what is known as “industrial
sickness”.

1.5.1 Definition of industrial sickness

According to Sick Industrial Companies Act, 1985, a unit is defined as sick
industrial company where:

(a) a company is registered for not less than seven years

(b) It incurred cash losses for the current and preceding financial year.
(c) Its net worth was eroded.

Even 50% or more of the net worth of the past 5 financial years is
eroded because of accumulated losses

1.5.2 Definition for small-scale sick units:

(a) Incurred losses in previous and current year

(b) Due to cumulative losses, 50% or more of its peak net worth during the
past 5 years should be eroded.
(c) They must have continuously defaulted 4 consecutive installment of
interest or 2 half-yearly installment of principal.
(d) Large small-scale unit – all 3 criteria should be fulfilled
(e) Small small-scale unit - any 1 of the criteria should be fulfilled

1.5.3 Causes of Industrial Sickness

a. External causes
1) Govt. policy
2) Erratic supply of inputs
3) Demand and credit restraints
4) Technological factors
5) Power cuts
 14
b. Internal causes

1) Outdated technology
2) Financial problem
3) Management problems
4) Labour problems
5) Marketing and sickness

According to Dr. Navaneet Singh, “As per the nature of the sick unit, it can
be categorized under three groups viz., Born Sick, Become Sick and Made
Sick.

1. Born Sick
Sickness is not always a post-implementation feature. Some
industrial projects are born sick from the very inception owing to ill-
conceived projects, bad planning and poor appraisal, wrong choice of
location and product selection, inadequate market surveys, false fixed
investment decisions, poor financial management and one customer – one
product, type situation etc. Mostly the units established by the
government under social welfare scheme come in this category.

2. Become Sick

Some industrial projects may become sick due to internal causes.

In such circumstances, sickness starts at last stage of project
implementation as a result of poor management and deliberate
diversion of funds. The factors like wrong recruitment and faulty
management policies are responsible for this.

3. Made Sick

In this category, sickness is thrust upon them due to external

causes beyond the control of the management, mostly attributed to
environmental factors such as sudden changes in government policies,
technological changes, macro – political, social and economic problems. It
is a product of malafide inheritor or weak management policy of
entrepreneur.

1.5.4 Causes of sickness in small-scale industry

The different types of industrial sickness in Small Scale Industry (SSI) fall
under two important categories. (Dr. Navneet Singh, 2011) They are as follows:
a. Internal causes for sickness
15
Internal causes are those pertaining to the factors which are within the
control of management. This sickness arises due to internal disorder in the
areas justified as following:

1) Lack of Finance:
This including weak equity base, poor utilization of assets,
inefficient working capital management, absence of costing & pricing,
absence of planning and budgeting and inappropriate utilization or
diversion of funds.
2) Inappropriate production policies:
Another very important reason for sickness is wrong selection of
site which is related to production, inappropriate plant & machinery,
poor maintenance of plant & machinery, lack of quality control, lack of
standard research & development and so on.
3) Marketing and sickness:
This is another aspect which always affects the health of any sector
as well as SSI. This includes wrong demand-forecasting, selection of
inappropriate product mix, absence of product planning, wrong market
research methods, and bad sales promotions.
4) Inappropriate Personnel Management:
This is another internal reason for the sickness of SSIs:
inappropriate personnel management policies which include bad wages
and salary administration, bad labour relations and lack of behavioural
approach causes dissatisfaction among the employees.

5) Ineffective Corporate Management:

Another reason for the sickness of SSIs is ineffective or
bad corporate management which includes improper corporate planning,
lack of integrity in top management, lack of coordination and control.

b. External causes for sickness

1) Personnel constraint:
The first foremost important reason for the sickness of small-scale
industries is non-availability of skilled labour or manpower wages
disparity in similar industry and general labour invested in the area.

2) Marketing constraints:
The second cause for the sickness is related to marketing. The
sickness arrives due to liberal licensing policies, restrain of purchase by
bulk purchasers, changes in global marketing scenario, excessive tax
policies by govt. and market recession.
 3) Production constraints:
16
This is another reason for the sickness which comes under external
cause of sickness. This arises due to shortage of raw material, shortage
of power, fuel and high prices, import-export restrictions.

4) Finance constraints:
Another external cause for the sickness of SSIs is lack of finance.
This arises due to credit restrains policy, delay in disbursement of loan
by govt., unfavorable investments, fear of nationalization.

5) Credit squeeze initiated by the government policies.

1.5.5 Consequences of industrial sickness
• Set-back to employment
• Fear of industrial unrest
• Wastage of resources
• Adverse impact on related units
• Adverse effect on investors & entrepreneurs
• Losses to banks and financial institutions
• Loss of revenue to government

1.5.6 Remedial Measures

1. Steps taken by commercial banks:
 Policy frame work was framed in 1981
 They were responsible in detection of sickness at the early stage
 Ministry were given more responsibility

2. Policy frame work of the govt.

 Remedial measures & excise loan were provided
 Margin money scheme was introduced
 No. of concessions was given by the govt. They are:

1. The Industrial Investment Bank of India: Establishment of

Reconstruction Corporation of India to provide all kinds of
assistance
2. IRCI converted to IRBI (Industrial Reconstruction Bank Of
India)
3. Board for Industrial & Financial Reconstruction: Rehabilitation
package - Operating agencies will design the scheme

To conclude, the sick units may be attempted to be turned around

through efficient management, change of top level executive and executing a
turnaround strategy.
 17
1.6 Design of the study

It is felt that there is no need for one more academic type of study,
strictly observing the norms of social science research. This is a diagnostic type
of inquiry, seeking the causative factors – socio-economic, institutional and the
dynamics of the market - responsible for the crisis situation in the industry, with
the purpose of developing pragmatic solutions.

We found that a good number of research studies and reports on the

various aspects of the coir industry in Kerala (See the list of References) have
already been carried out by institutions such as the Dept. of Economics and
Statistics, the Coir Board, the State Planning Board, Centre for Development
Studies, subject experts, Ph.D. scholars, journalists and others. As the saying
goes, there is no need for reinventing the wheel.

1.6.1 Review of studies

Hence, the first step obviously, was to go through the reports of these
studies in detail and collect facts and figures (secondary data) relevant to the
present inquiry – a review of existing literature on the subject. This has provided
us an overview of the coir sector and its functioning at present.

The next step was to prepare a list of the major findings of the
studies in respect of the MSMEs in the sector. In fact, the present study began
from that point onwards. The major findings were verified and validated in the
field through primary data. Relevant findings and the new findings were listed
for detailed analysis.

Likewise, recommendations given in the previous studies were listed

and examined thoroughly in the field for their relevance, validity and feasibility
for implementation. And finally, these recommendations/solutions were vetted
by the Core Committee on Research (KILE) and also by a few subject experts,
representatives of unions and managements.

The primary stakeholders consist of women or men who directly operate

micro units, independently or as members of coir cooperative societies and the
proprietors of small-scale and medium-scale units. Secondary stakeholders
consisting of prominent leaders of trade unions in the coir sector, officials of the
Coir Board, Coirfed, cooperative societies, Kerala State Coir Corporation, Coir
Development Department (GoK), traders and exporters.
 18
The objectives of the study were discussed several times with the
President of Federation of Indian Coir Exporters’ Association (FICEA) and the
union leaders and finalized.
The design of the study which is explained, in detail, below was discussed
and approved by the members of the Core Committee on Research of KILE on
19-09-2015.
In order to gain some understanding of the working of the big units, the
study team under the leadership of Sri. Veerakumar, Executive Director, KILE
visited Alappuzha on 20.08.2015. There were interactive sessions with the
members of FICEA and also representatives of workers on the work-related
problems of the companies.
Meanwhile, in response to our request, Sri. M.P. Pavithran, President,
Kerala State Small Scale Coir Manufactures’ Federation, Alappuzha had promptly
sent us a detailed write-up on the current status of small scale units, their needs
and problems. It was very helpful.
Just to understand the ground realities, a detailed pilot study was
undertaken in October. Members of the study team met the Project Officers of
Thiruvananthapuram, Kollam and Alappuzha of the Coir Development
Department and sought their help. Their responses were very positive and
instructed the Coir Inspectors to assist the study team. The Investigators visited
a few cooperative and small-scale units in Chirayinkeezhuu, Kollam,
Karunagappally and Harippad and had interactive sessions with the Presidents of
the societies and Member workers. The team also collected data through
observation of the production activities of the units. On the basis of the first
hand information collected from the field, the tools for data collection were
developed.
1.6.2 Sub-sectors
The coir sector in the State is heterogenous and consists of several sub-
sectors such as:

1. the large factories in Alappuzha-Cherthala belt and elsewhere

(popularly known as the organized sector)
2. the coir vyavasaya cooperative societies
3. small-scale units (owned by individuals and some cooperatives)
4. household units

Obviously, sample units were selected from each of these sub-sectors based on
two criteria:
(1) consistently successful units which have achieved financial
stability and offer regular work for labour
(2) units that are failing or already failed
 1.6.3 Tools of data collection 19
1. semi-structured interview schedules were used for collection of data
from the CVCS and small units
2. semi-structured interview schedules were used for collecting data from
the household units
3. interview guides used for interacting sessions with the representatives
of FICEA and unions of employees
4. interview guides for discussion with representatives of Coirfed, Coir
Board, Coir Development Department, Coir Inspectors and Secretaries
of CVCS
1.6.3.1 Observation
Using a semi-structured observation schedule, the work places and the
work-process of coir and coir products, the environment etc were taken note of.
1.6.3.2 Records
There were difficulties in getting basic records from the units as well as
from supporting institutions. The presumption is that either the units do not
maintain records properly or they are suspicious of the investigators. While
responding to questions regarding statistics of production, sales bank deposits,
debt burden etc, they did not refer the records. They give facts and figures of
their memory. The Investigators were really in helpless situations. Even the
supporting agencies were found to be very reluctant to lend their records for
perusal. The team had to be satisfied with their annual reports.
1.7 Feedback
The major findings of the study were recorded and placed at three group
meetings of FICEA representatives, the senior leaders of coir workers’ unions and
officials of the various supporting agencies such as Coirfed, Coir Development
Department, Coir Board etc. The analysis and findings were subjected to positive
criticism by the group members and many of their view-points incorporated in
the final report. Along with criticism, very valuable, pragmatic suggestions for
improving coir industry in Kerala were given by the participants. These were
accepted and incorporated in the report after examining their feasibility and
viability.
1.8 Limitations of the study
During the field work, the investigators experienced difficulty in getting
the facts and figures needed for the study according to the prescribed
methodology. The large coir factories politely refused access to their business
data – especially audited statement of accounts and the changing trends in the
international coir market. However, they were cooperative in providing us with
information regarding the wage structure and other benefits enjoyed by their
work force as well as the operational difficulties they experience due to
resistance from labour. The household units are not in the habit of maintaining
accounts of their financial transactions. About 400 and odd cooperatives are
dysfunctional. The rest, except a few are struggling to survive. In the absence
of authentic records, we had to accept whatever they orally expressed. On the
other hand, the Coir Development Department provided us with all the facts and
figures we needed.
 Table No. 1.1 20

Details of the amount spent for

the various coir promotion schemes by
the Coir Development Department

from 2010-11 to 2015 March

Non-plan Plan
Budget Expenditure Budget Expenditure Percentage
Year Amount Amount Amount Amount of Utilisation
(Lakh) (Lakh) (Lakh) (Lakh)
7170.00
(including the
2009-10 616.07 582.64 GoI’s 7077.35 98.71
contribution of
Rs. 375 lakh

2010-11 702.91 636.41 11131.43 10555.08 95.00

99.92
2011-12 973.10 968.70 9005.01 8997.50
97.79
2012-13 4100.80 4061.01 10470.00 10238.39
61.36
2013-14 3587.66 2473.80 11637.00 7140.75
52.78
2014-15 6499.15 6322.06 12193.90 6435.44
---
2015-16 4407.71 --- 11695.00 ---
Source: Coir Development Directorate 2015-16

Table No. 1.2

Proforma
Export of Coir and Coir Products by Coir Public Sector Undertakings/Coirfed (Rs. In Lakh)
Kerala State Coir
Foam Mattings (India) Ltd. Coirfed
Year Corporation
Value Quantity Value Quantity Value Quantity

2019-11 10.55 20000 sq.m 3360617 73607 213.97 4567.55

2011-12 Nil Nil 2598925 51325 179.05 3259.12

2012-13 112.09 25000 sq.m 4379112 56929 150 3376.89

2013-14 245.4 60000 sq.m 7223854 56140 419.47 6428.96

2014-15 416 115000 sq.m 4999807 42386 336.5 6168.79

Source: Coir Development Directorate - 2015

 21
Chapter II
Coir Manufacturing Companies
2.1 Introduction
Coir industry is perhaps, the most important employment generator
among the traditional industries in Kerala. It provided direct and indirect
employment for about 5 lakh workers during its glorious years of which 85%
were women in the rural areas. In 2013-14, coir and coir products generated
about 1,630 crores worthy of foreign exchange.

Kerala had a monopoly in coconuts and related industries in the past. The
estimated average annual production of coconuts in Kerala comes to 5000 million
nuts (2014-15). Only a marginal percentage of these husks is put to industrial
use in the State. With the Kerala Land Reforms Act of 1963, the large coconut
farms disappeared and the incentive to nurture coconut tree was also lost. At the
same time, large coconut plantations started to come up in the other southern
states.

The study team visited a few factories and cooperative societies in

Alappuzha – Cherthala area on 20.08.2015. In the forenoon, the team visited
M/s. William Goodacre & Sons India (P) Ltd., Travancore Coir Factory and Farm
Fiber, held discussion with the managements of these factories. The following
representatives of the managements participated in the discussions:

1. Sri. John Chacko, Chairman , Federation of Indian Coir Exporters

Association (FICEA) and Member CIRC
2. Sri. Sajan. B. Nair, Secretary General, Federation of Indian Coir
Exporters Association (FICEA) and Member CIRC
3. Sri. ………………….. (Brother of Sri. M.V. Prasad)
4. Sri. M.V. Prasad, Managing Director, Travancore Mat and Mattings,
Cherthala
5. Sri.Vivek Venugopal, Managing Director, M/s. William Goodacre & Sons
India (P) Ltd.
6. Sri.Pavithran, Managing Director, Floor Décor
7. Sri. Jose Paul, ManagingDirector, Farm Fiber

Due to the stiff opposition from local trade unions, when mechanical de-
fibering machines were introduced, the companies were not allowed to set up
such units in Kerala but Tamil Nadu rapidly established several units.
 22
With retting and manual extraction becoming more and more difficult and
costly, the yarn-spinning industry started to use more and more un-retted Tamil
Nadu fiber. Initially, it was a 10% TN fiber mixed with 90% Kerala retted fiber
and this equation slowly shifted to 100% TN fiber for most qualities of yarn. The
Kerala coir industry now is more or less dependent on Tamil Nadu for fiber. With
the gradual disappearance of the retting activity in Kerala due to ecological and
social reasons, the scope of fiber production in Kerala is very minimal.

Source: The Hindu, April 28, 2015

Since Independence, with the disappearance of the European employers,

there was a disintegration of large-scale European factories which gave rise to
decentralisation of the industry in 1960 into small-scale manufacturing sector
which in turn, started supplying semi-finished products to the Indian export
companies.

The different layers in the coir sector, in general, are:

1. Fiber extraction
The traditional method of extraction of fiber after retting of husk
was totally manual. Now, the fiber extraction is mainly a mechanical
process done by highly advanced fiber mills, mostly concentrated in Tamil
Nadu. The focus of the fiber extraction mills has shifted to export to
China.
 Table No. 2.1
23
Current Status of Fiber Export

Period Quantity of Export Value

in Tons in Rs. Lakhs
1999-2000 809.88 117.16
2004-2005 1,350.45 186.03
2009-10 73,074.93 9,742.03
2014-15 219,103.00 41,923.34

This has lead to change in the extraction process and the staple
length is shorter, leading to more shedding and poor quality of the
product. There is a need to develop a process of fiber extraction that can
give better quality fiber for the spinning and product sector.

2. Spinning
Most of the spinning is done by hand, mostly in the cottage sector,
spread along the coast line of Kerala. The co-operative societies and the
private sector agents collect this yarn and supply it to the manufacturers
and the exporters. With the development of mechanical spinning
machines in Tamil Nadu, aggressive efforts are being made by their
entrepreneurs to produce and supply mechanically-spun yarn to Kerala.
This is a serious threat to the hand-spinning sector from the TN machine-
spun yarn. Hence, substantial investment needs to be done in Kerala in
the immediate future to enhance mechanical spinning. If not, the spinning
sector will have the same fate as the fiber sector and the hand-spun yarn
will not be able to compete with the machine-spun yarn.

3. Weaving
There are large number of tiny producers in Kerala who weave
products in the premises of their houses. They generally have 2 to 3
looms in a shed. The products made by them are supplied to the co-
operative societies. With the installation of more and more tufting
machines, this sector is on its way to extinction. Already, the PVC tufted
product is half the price of the hand-made mat. Unless, there is some
serious effort is taken to increase the productivity of the looms, the
product becomes less and less competitive with every increase in wages.

4. Public sector undertakings (PSU)

The various PSUs of Kerala are the Kerala State Coir Corporation,
which procures semi-finished products from the co-operatives & small-
scale manufacturers and supplies it to the exporters as per their
requirements.
 24
The Kerala State Co-operative Coir Marketing Federation (Coirfed)
supplies coir fiber to the spinning sector, converts it into yarn and supplies
it to the manufacturers. They also market the products domestically
through show rooms. Being Govt. companies, the workers in this sector
are paid wages based on the DA index from time to time, bonus and other
benefits stipulated by CIRC.

5. Exporters & organized factories at the apex

This is the most important sector of the industry, which brings in
foreign exchange. It has large investments and establishments in factories
and provides regular employment to a large workforce. Most of the
machine-made and value-added products are being produced in these
factories through their continued efforts in product development and R&D.
By their traditional contacts, goodwill and aggressive marketing efforts,
they are always in the forefront in developing the export industry.

The workers in this sector are paid all legitimate wages and
benefits as stipulated by labour law. This amounts to CIRC bonus and
other benefits, totaling to more than 60%. They employ daily-paid
workers as per the DA, from time to time and piece-rated workers (who
gets between Rs. 500 - 1,000/- per day without fringe benefits) covered
by bilateral long-term agreements (generally, for a three-year period).

6. Finishing factories
These units undertake the finishing work of those exporters who
do not have their own facilities or supplement their in-house capacity from
time to time. The embellishment work of most of the semi-finished goods
produced in the cottage and factory sectors like – sheering, stenciling /
printing, bleaching, packing and other related work, are done in these
factories. The stenciling workers are paid wages as per CIRC and the
helpers are paid mutually agreed wages.

2.2 Wage structure in the organized industries

Since these are large manufacturing units, they are guided by labour laws,
policies of the government and the agreements/decisions taken at CIRC. By and
large, they are law-abiding and desire peace and harmony in industrial relations
so that they could optimize their production and sales without any hassles.

The tables and graphics given below provide an overview of the current
wage structure and fringe benefits in the company sector in Kerala.
 25
Table No. 2.2

Wage comparison (based on DA increase ) of daily paid workers

including benefits - Mar '13 & June '15

ALLEPPEY AREA ALLEPPEY AREA

CLI NOV '12 19969 CLI April '15 25044
104.76
DA JAN '13(Incl.FDA) 83.432 DA June '15(Incl.FDA) 8

Wage calculation Male Female Wage calculation Male Female

2.583 2.16 2.583 2.160
104.76 104.76
D.A for Re.1 83.43 83.43 D.A for Re.1 8 2
Plus basic 1.00 1.00 Plus basic 1.000 1.000
105.76 105.76
84.43 84.43 8 2
Devaluation increase 22% 18.58 18.58 Devaluation increase 22% 23.269 23.268
129.03 129.03
103.01 103.01 7 0
Devaluation increase 23% 23.69 23.69 Devaluation increase 23% 29.679 29.677
158.71 158.70
126.70 126.70 5 6
Interim increase 10% 12.67 12.67 Interim increase 10% 15.872 15.871
174.58 174.57
Total Wage of Re.1/- 139.37 139.37 Total Wage of Re.1/- 7 7

ACTUAL WAGE 359.99 301.04 ACTUAL WAGE 450.96 377.09

Benefits Benefits
Bonus at 30.04% 108.14 90.43 Bonus at 30.13% 135.87 113.62
PF at 11.36% 40.89 34.20 PF at 11.36% 51.23 42.84
ESI at 4.75% 17.10 14.30 ESI at 4.75% 21.42 17.91
Leave with Wages at 5% 18.00 15.05 Leave with Wages at 5% 22.55 18.85
Holiday Wages at 4.25% 15.30 12.79 Holiday Wages at 4.25% 19.17 16.03
Gratuity at 5% 18.00 15.05 Gratuity at 5% 22.55 18.85
Total 217.43 181.83 Total 272.78 228.10

577.4 482.8
Cost to the Company 2 6 Cost to the Company 723.74 605.19

This will give an idea of increase in wages due to the DA element alone
since the last wage settlement. Also shown is the impact with total benefits.
 26

Table No. 2.3

Details of Minimum Wages of Various Industries of Kerala –

1st March 2013 Vs 1st July 15

Totals
Industry Basic DA (Rs.) Basis for DA Calculation
FISHERIES - base CLI Cochin.
as on 1st Mar.
13 Rs.138 Rs.79.05 217.05 223 points - 130 points = 93 points x Rs. 0.82 = Rs.79.05
as on 1st July 15 Rs.138 Rs.118.08 256.08 274 points - 130 points = points x Rs. 0.82 = Rs.118.08
Variance Rs. 39.03
Variance % 17.98

Note : In the case of time rated and monthly paid employess who have completed not less than 3 years service as on the date of
coming into force of this notification , service weightage shall be allowed at 1 % of the revised wages for each completed year of
service subject to the maximum of 15 % .

CASHEW - base CLI Kollam

as on 1st Mar.
13 Rs.180 Rs.58.01 238.01 24518 points - 14850 points = 9668 points / 5 x Rs.0.03 = Rs.58.01

as on 1st July 15 Rs.180 Rs.83.36 263.36 28743 points - 14850 points = 13893 points / 5 x Rs.0.03 = Rs.83.36

Variance Rs. 25.35

Variance % 10.65

HANDLOOM - base CLI Kannur.

as on 1st Mar.
13 Rs.118 Rs.85.28 203.28 224 points - 120 points = 104 points x Rs.0.82 = Rs.85.28
as on 1st July 15 Rs.118 Rs.125.46 243.46 273 points - 120 points = 153 points x Rs.0.82 = Rs.125.46
 27

Variance Rs. 40.18

Variance % 19.77

KHADI - base CLI Kannur.

as on 1st Mar.
13 Rs.115 Rs.85.28 200.28 224 points - 120 points = 104 points x Rs.0.82 = Rs.85.28
as on 1st July 15 Rs.115 Rs.125.46 240.46 273 points - 120 points = 153 points x Rs.0.82 = Rs.125.46
Variance Rs. 40.18
Variance % 20.06

BEEDI - base CLI Kannur.

as on 1st Mar.
13 Rs.115 Rs.59.71 174.71 2253 points - 1400 points x Rs.0.07 = Rs.59.71
as on 1st July 15 Rs.115 Rs.94.22 209.22 2746 points - 1400 points x Rs.0.07 = Rs.94.22
Variance Rs. 34.51
Variance % 19.75
Note :
1. A minimum production of 900 beedies per day
2. A minimum of 125 packs per day for labelling.

For your ready reference please find a graphical representation of the quarterly wage comparison on DA
increase – Coir Vs Traditional industries for the period March ’13 to June ’15
 28

Table No. 2.4

Quarterly wage comparison on DA increase- Coir Vs Plantation industries –

March 2013 to June 2015

Mar June Sep. Dec Mar June Sep. Dec Mar June
'13 '13 '13 '13 '14 '14 '14 '14 '15 '15

Coir 372.7 375.93 398.49 407.8 414.25 425.35 443.08 444.69 446.3 450.96

Rubber 282.55 286.64 291.39 295.48 302.57 304.65 306.4 312.84 318.88 319.53

Cardomem 227.68 231.77 236.52 240.61 247.7 249.78 251.53 257.97 264.01 264.66

Tea 195.93 200.02 204.77 208.86 215.95 218.03 219.78 226.22 232.26 232.91

Coffee 192.68 196.77 201.52 205.61 212.7 214.78 216.53 222.97 229.01 229.66

For your ready reference please find a graphical representation of the quarterly wage
comparison of DA increase – Coir Vs Plantation industries for the period March ’13 to June ’15
 29

Diagram No. 2.1

Quarterly wage comparison on DA increase- Coir Vs Plantation industries –

March 2013 to June 2015

500

450

400

350

300 Coir
Rubber
250
Cardomem
200 Tea
Coffee
150

100

50

0
Mar '13 June '13 Sep. '13 Dec '13 Mar '14 June '14 Sep. '14 Dec '14 Mar '15 June '15
 30

Table No. 2.5

Quarterly wage comparison on DA increase- Coir Vs Traditional industries –

March 2013 to June 2015

Mar '13 June '13 Sep. '13 Dec '13 Mar '14 June '14 Sep. '14 Dec '14 Mar '15 June '15

Coir 372.7 375.93 398.49 407.8 414.25 425.35 443.08 444.69 446.3 450.96

Cashew 238.01 241.83 249.42 251.95 253.86 259.53 262.74 263.97 264.65 265.89

Fisheries 214.26 216.72 228.2 232.3 233.12 240.5 248.7 251.16 254.44 256.08

Handloom 203.28 207.38 218.86 222.96 225.42 227.88 236.9 240.18 238.54 243.46

Khadi 200.28 204.38 215.86 219.96 222.42 224.88 233.9 237.18 235.54 240.46

Beedi 174.74 178.26 188.12 191.64 193.75 195.87 203.61 206.43 205.02 209.25

As you note the variable component is far ahead in coir when compared to other industries
 31

Diagram No. 2.2

Quarterly wage comparison on DA increase- Coir Vs Traditional industries –

March 2013 to June 2015

500

450

400

350
Coir
300
Cashew

250 Fisheries
Handloom
200
Khadi
150 Beedi

100

50

0
Mar '13 June '13 Sep. '13 Dec '13 Mar '14 June '14 Sep. '14 Dec '14 Mar '15 June '15
 32

Table No. 2.6

Comparison of Fixed & Variable component in wages - Coir Vs. Traditional Industries –
March '13 & June '15

As on 1/3/13

Beedi Khadi Handloom Fisheries Cashew Coir

Fixed component 115 115 118 138 180 2.583

Variable component 59.74 85.28 85.28 76.26 58.01 370.117

As on 1/6/15

Beedi Khadi Handloom Fisheries Cashew Coir

Fixed component 115 115 118 138 180 2.583

Variable component 94.25 125.5 125.46 118.08 85.89 448.377

 33

Diagram No. 2.3

Comparison of Fixed & Variable component in wages - Coir Vs. Traditional Industries –
March '13, 2015

400
350
300
250
200
150 Fixed component
100 Variable component
50
0

Handloom
Khadi

Fisheries

Coir
Beedi

Cashew
As on 1/3/13
 34

Diagram No. 2.4

Comparison of Fixed & Variable component in wages - Coir Vs. Traditional Industries –
June '15, 2015

500
450
400
350
300
250
200
Fixed component
150
Variable component
100
50
0
Handloom
Khadi

Fisheries

Coir
Beedi

Cashew
As on 1/6/15
 35

Diagram No.2.5

Comparison - Cost of Raw Material & Labour

in Handloom

FM2 Mat
cost of labour
69%

cost of raw
material
31%
 36

Diagram No.2.6

Comparison - Cost of Raw Material & Labour

in Machine Made

Coir Tufted PVC Mat

cost of labour
10%

cost of raw
material
90%
 37

Diagram No. 2.7

Price Comparison between

Handloom Coir Mats & Coir Tufted PVC Mats (2007 to 2014)

120.00

100.00

80.00

FM2
60.00
BC1
Coir - PVC
40.00

20.00

0.00
2007 2008 2009 2010 2011 2012 2013 2014
 38

Table No. 2.7

Purchase price increase of Handloom Mats Vs. Coir Tufted PVC Mats
from 2007 to 2014

Purchase price in Rs. / Sq.ft % of increase

Quality from 2007 to
2007 2008 2009 2010 2011 2012 2013 2014 2014
FM2 43.00 53.10 58.41 67.46 85.00 80.75 97.99 106.65 148.02
BC1 23.96 28.99 32.66 38.93 47.00 44.65 52.64 58.75 145.20
Coir - PVC 23.23 24.15 24.62 26.48 30.19 31.23 31.87 32.52 39.99

Table No. 2.8

Price difference / Sq.ft between BC1 Mats Vs. Coir Tufted PVC Mats
from 2007 to 2014

Year BC1 Coir - PVC % diff.

2007 23.96 23.23 3.14
2008 28.99 24.15 20.04
2009 32.66 24.62 32.66
2010 38.93 26.48 47.02
2011 47.00 30.19 55.68
2012 44.65 31.23 42.97
2013 52.64 31.87 65.17
2014 58.75 32.52 80.66
 39

Table No. 2.9

India's Exports of Coir and Coir Products from 1995-96 to 2014-15

(Four Tables)

Qty in Tons Value in Rs. Lakhs

1995-96 1996-97 1997-998 1998-99 1999-2000
Sl.No. Items
Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value
1 Coir Fibre 303 27.09 337.00 49.59 243.00 27.93 646.00 91.46 809.88 117.16
2 Coir Yarn 14839 3434.48 13645.00 3263.18 15889.00 4123.65 16539.00 4827.41 13052.59 3738.39
3 H L Mats 20338 10131.77 21091.00 11396.68 21039.00 12467.03 21943.00 14878.52 24292.92 15688.71
4 P L Mat 1042.61 699.12
5 Tufted Mat 1567.70 793.77
6 H L Matting 7591 4621.28 6578.00 4126.05 7107.00 4650.02 6571.00 4729.86 6238.58 4338.55
7 P L Matting 531.36 395.05
8 Geo textiles 474 167.8 361.00 149.46 739.00 313.31 1208.00 546.91 1711.25 808.41
9 Rugs & Carpets 2818 1867.91 2306.00 1705.15 1957.00 1441.55 2934.00 2300.56 2889.64 2259.62
10 Coir Rope 121 26.27 78.00 21.68 92.00 24.51 211.00 59.25 286.63 73.41
11 Curled Coir 1156 112.89 715.00 85.94 642.00 80.33 445.00 76.38 657.28 114.57
12 Rubberised Coir 174 113.4 212.00 152.32 288.00 234.12 573.00 427.01 522.88 387.52
13 Coir pith 109 5.39 468.00 51.69 755.00 87.76 2216.00 251.26 6501.59 562.77
14 Coir Other Sorts 353 176.36 578.00 256.52 1099.00 442.69 2204.00 1030.26 925.98 328.30
TOTAL 48276 20684.64 46369.00 21258.26 49850.00 23892.90 55490.00 29218.88 61030.89 30305.35
 40

2000-01 2001-02 2002-03 2003-04 2004-05

Sl.No. Items
Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value
1 Coir Fibre 1053.98 148.17 1010.30 122.15 1036.87 103.81 1120.75 142.44 1350.45 186.03
2 Coir Yarn 14607.30 4187.50 13206.90 3728.59 11482.47 2996.76 12364.43 3498.71 10987.60 3358.16
3 H L Mats 24716.44 15917.69 26147.89 17009.85 33058.75 20711.79 36303.99 22133.69 40127.35 25129.27
4 P L Mat 606.97 442.72 686.50 458.19 954.85 585.52 1026.28 672.13 1433.22 931.16
5 Tufted Mat 3835.64 2104.17 7129.54 4112.38 6429.03 3434.71 11772.50 6359.52 16502.26 9499.05
6 H L Matting 6323.37 4287.86 4423.27 2921.04 4772.62 3191.44 4545.56 2838.66 3518.90 2334.04
7 P L Matting 410.71 284.04 274.04 226.10 183.18 111.79 309.04 215.44 188.94 138.92
8 Geo textiles 1402.29 625.38 1752.05 780.13 2140.69 985.23 2599.54 1184.74 2323.20 1049.75
9 Rugs & Carpets 2720.44 1958.64 1329.97 1039.76 1327.08 932.42 1694.56 1071.36 1727.33 1002.64
10 Coir Rope 482.12 145.21 348.64 108.04 332.40 102.05 308.88 111.46 299.67 116.91
11 Curled Coir 533.57 80.33 572.53 80.63 492.37 80.05 76.54 14.02 69.00 11.97
12 Rubberised Coir 385.06 267.24 454.64 350.38 535.22 403.43 461.78 334.67 475.92 340.57
13 Coir pith 9926.97 752.79 13725.65 1014.30 21064.20 1493.01 29179.35 1975.92 43420.54 3042.40
14 Coir Other Sorts 488.23 164.48 272.91 106.82 372.85 138.56 490.21 196.90 502.41 199.38
TOTAL 67493.08 31366.23 71334.81 32058.35 84182.58 35270.57 102253.40 40749.67 122926.79 47340.25
 41

2005-06 2006-07 2007-08 2008-09 2009-10

Sl.No. Items
Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value
1 Coir Fibre 1552.98 196.05 9356.54 1075.80 11101.64 1224.14 14554.69 1837.65 73074.93 9742.03
2 Coir Yarn 9582.52 3019.00 9691.17 3161.57 8407.09 2666.90 5335.09 1925.92 6108.35 2461.21
3 H L Mats 42516.42 26698.73 42986.07 27370.67 40917.35 24299.85 35553.43 23537.53 36297.71 25428.01
4 P L Mat 1609.94 1027.10 246.21 168.84 75.06 52.69 54.21 40.06 2.84 2.03
5 Tufted Mat 19671.49 11605.96 29017.02 18213.02 33950.35 19910.98 33689.27 22598.15 36991.21 25351.24
6 H L Matting 2915.91 1913.38 3642.27 2354.63 3013.71 1879.33 2368.45 1716.56 1832.24 1425.28
7 P L Matting 155.95 118.89 104.75 85.11 115.82 88.30 87.52 85.09 2.41 3.04
8 Geo textiles 2512.32 1140.56 3044.51 1335.22 3364.72 1444.65 3251.52 1591.05 3754.44 2023.77
9 Rugs & Carpets 1242.70 730.38 488.31 328.55 178.14 134.40 63.83 67.63 46.17 45.38
10 Coir Rope 162.73 70.41 154.25 68.87 372.26 139.99 370.28 164.60 430.56 165.92
11 Curled Coir 0.00 0.00 1804.03 208.34 1279.99 152.06 1193.38 197.04 3365.7 668.33
12 Rubberised Coir 536.50 377.05 947.31 697.86 1120.35 852.19 1222.59 1174.77 629.78 713.39
13 Coir pith 53444.48 3872.60 67152.99 5382.07 83613.24 6384.77 96996.32 8462.30 131916.67 12347.06
14 Coir Other Sorts 123.03 74.65 119.31 66.04 57.02 57.83 50.50 19.03 55.04 28.53
TOTAL 136026.97 50844.75 168754.75 60516.59 187566.74 59288.08 194791.08 63417.38 294508.05 80405.22
 42

2010-11 2011-12 2012-13 2013-14 2014-15

Sl.No. Items
Quantity Value Quantity Value Quantity Value Quantity Value Quantity Value
1 Coir Fibre 83393.01 12148.55 119684.54 20323.98 140692.93 20707.66 173901.72 32878.11 219103 41923.34
2 Coir Yarn 5021.96 2685.34 5562.87 3140.7 4202.3 2387.22 4246.88 2848.26 4070 3000.89
3 H L Mats 29409 21525.8 27656.17 23545 24150.93 22810.1 22608.9 23623.82 25354 23946.91
4 P L Mat 0 0 36.14 24.56 1.94 3.15 234.21 278.36 161 225.25
5 Tufted Mat 33349.2 23968.41 33021.17 27745.26 37288.51 33572.91 43751.79 41776.39 41284 39725.96
6 H L Matting 1406.49 1244.72 1473.78 1582.83 1418.31 1702.76 3425.63 3353.91 1667 1835.28
7 P L Matting 0 0 0 0 0 0.00 0 0 28 43.93
8 Geo textiles 3266.63 1823.05 3680.91 2433.12 3597.3 2628.74 4468.27 3503.78 4236 3270.28
9 Rugs & Carpets 1146.81 826.22 191 185.55 94.83 133.37 93.43 105.99 135 146.1
10 Coir Rope 211.56 86.72 792.82 340.99 419.62 282.41 497.84 390.17 614 391.92
11 Curled Coir 5527.08 1056.52 11855.97 3171.3 8883.14 2112.46 11262.66 2947.93 12621 3732
12 Rubberised Coir 383.39 476.89 415.6 549.8 321.47 495.02 965.43 1560.76 897 1410.88
13 Coir pith 157854.93 14829.02 206424.57 22150.7 208399.28 24727.61 271494.76 34173.23 316425 43295.24
14 Coir Other Sorts 45.96 35.84 58.36 68.75 30.36 39.33 88.86 163.13 71 85.79
TOTAL 321016.02 80707.08 410853.90 105262.54 429500.92 111602.74 537040.38 147603.84 626666 163033.77
Source : Coir Board
 43

Table No. 2.10

List of Tufters as on 18th Aug. 2015

Period of establishment In Alpy area Outside Alpy area Number of Tufting heads
Under Pvt. Sector
Till 2000 9 8 17
2000 - 2005 2 2
2005 - 2010 4 8 12
2010 - 2015 3 10 13
Total 18 26 44
0
Under Co-operative Sector 0
Till 2000 0
2000 - 2005 0
2005 - 2010 1 1
2010 - 2015 1 1
Total 2 0 2
0
Proposed 0
Till 2000 0
2000 - 2005 0
2005 - 2010 0
2010 - 2015 1 2 3
Total 1 2 3
Grand Total 21 28 49
 44

Table No. 2.11

Estimated number of workers in the coir Industry

Sl.
No. Sectors Nos.
1 Fibre extraction 7,500
2 Spinning sector 60,000
3 Cottage industries & house hold 20,000
4 Co-operative societies/small scale manufacturing
sector 40,000
5 Public sector undertakings 750
6 Exporters & organised factories 5,000
7 Finishing units 2,500

Total 135,750
 45

Diagram No. 2.8

Estimated number of workers in the coir Industry

Fibre extraction

Spinning sector

Cottage industries & house hold

Co-operative societies/small scale

manufacturig sector
Public sector undertakings

Exporters & organised factories

Finishing units
 46

Table No. 2.12

WAGES - DAILY RATED comparison as on 1st Mar. '13 Vs. 1st July. '15

Industry Basic D.A Total

Tea
as on 1st Mar.13 85.88 110.05 195.93
as on 1st July.15 85.88 149.37 235.25
Variance in Rs. 39.32
Variance in % 20.07

Rubber
as on 1st Mar.13 172.5 110.05 282.55
as on 1st July.15 172.5 149.37 321.87
Variance in Rs. 39.32
Variance in % 13.92

Coffee
as on 1st Mar.13 82.63 110.05 192.68
as on 1st July.15 82.63 149.37 232.00
Variance in Rs. 39.32
Variance in % 20.41
 47

Cardamom
as on 1st Mar.13 117.63 110.05 227.68
as on 1st July.15 117.63 149.37 267.00
Variance in Rs. 39.32
Variance in % 17.27

Coir
as on 1st Mar.13 2.583 357.407 359.990
as on 1st July.15 2.583 448.377 450.960
Variance in Rs. 90.970
Variance in % 25.27
Source :

for Plantations - APK.

 48

An overview of current status of wages and fringe benefits enjoyed by

6000 and odd workers in the 50 and odd factories in the organized sector are
given above. To complement the generalisation given through the Tables, the
wage structure of M/s. William Goodacre & Sons India (P) Ltd. is given below:

The permanent workers get Rs. 700 - 770 as daily wage plus 60%
benefits as per Labour Laws. The contract workers get Rs. 360 plus 40%
benefits. Long-term settlements are made once in every three years. The last
one was signed in April 2013. Wages differ a little, between units.

New factories are not coming up in the Alappuzha - Cherthala belt.

However, they are being set up in the Vaikom, Adoor, Kunnathanam, and
Changanassery regions.

2.3 Issues raised by the managements

During the interactive sessions with the top managements of the coir
companies, several unresolved issues related to labour and their unions were
mentioned, seeking redressal through CIRC with the support of the Hon. Minister
for Labour. Some of the major issues are listed below:

1. Irrational way of paying exchange benefit

Since the companies are market-driven, on the basis of the exchange

rate of dollars, wage should be enhanced, (as demanded by labour) but once
it is enhanced, it cannot be reverted when the situation changes. This
irrational way of paying exchange benefit is seriously affecting the economics
of their business. Due to frequent increase in the production cost, finding out
market for the products is a serious issue. The existence of the factory is only
due to other products manufactured such as handloom, jute, latex, poly
propylene and not due to coir products.

2. Shortage of raw materials

Sufficient raw materials are not available in the State. They are mainly
brought from Tamil Nadu. Even partly manufactured items are brought and
made into final products and exported from here. Part of the benefits goes to
TN factories.
 49

3. Variable Dearness Allowance

The variable component of DA is above 90% (99.24%). The fixed
component is 50-60% and the other constitutes the rest. They are not
against in enhancing wages to the workers engaged in small-scale units
including co-operative societies and family units. But the compulsion to
enhance the DA of company workers whenever the DA of workers in
cooperative and small-scale units is very unscientific. Even those factories
having their own long-term settlements (LTS) are also not spared from this
common approach.

4. Resistance to productivity
There is productivity-resistance from workers. Though major factories
are mechanised, they are not getting the benefit of it. “We cannot increase
the production. None of the management will retrench the workers due to
mechanisation. Even if mechanisation is introduced, workers are not inclined
to increase their unit production. Though they can enhance the take-away
amount and the company also gets benefit due to it, they are not inclined to
enhance their production. So, unless the productivity is enhanced, there is no
chance of further enhancement of wages. Periodical unscientific enhancement
of wages will affect the company’s existence.”

5. Inter -union rivalry

This is a perennial problem in the organized coir industry, creating
functional difficulties at the shop floor. Day-to-day work-related problems
could not be resolved because of lack of unity among the unions. What the
leaders agree individually in private discussion, they disagree when they
come together for collective negotiation. Because of this, problems remain
unresolved.

6. Strikes and unfair practices of unions

Frequent strikes are another reason for the situation. They have to
face the consequences on the failure of other factories or units to comply
with the statutory or other terms and conditions already agreed upon. Eg. If
any problem in a stencilling unit or of an unit of another factory, the unions
will resort to strike in the industry in toto, just to press their demands. Even
the legally abiding factories/units are also not spared from their action.
These situations compel other managements also to compromise on their
production. It makes the situation further worse. In 2002-2003 there was a
long strike of one month. However, for the past five years, strike has come
down in the industry.
 50

7. Industry wide issues

All exporters may not be paying the wages agreed at meetings. But,
instead of treating such units differently, the unions adopt an inimical attitude
towards all the companies irrespective of their involvement/non-involvement
in the issue. They even go on strike thereby, paralyzing all the companies.

In addition to these issues, the managements have given us a write-

up highlighting some more constraints experienced by them in managing
their business:

“On the outset, we thank you for your sincere interest for the well-
being and revival of our Coir industry and dedicating your valuable time to
study and resolve the issues being faced by us in Kerala. This is a refreshing
change and gives us immense hope. We greatly appreciate you seeking our
input with respect to the scope of study being initiated by KILE. Our trade
associations, represented by FICEA, have met with KILE officials at least
twice and have also given detailed inputs on the issues being faced by Coir
industry and areas to be studied. We have given detailed written note
supported by data and graphs. A few additional points were also added by
FICEA and are being sent separately for your consideration.

What we have here is a joint representation from the Coir IRC members
representing the Coir Export community in Kerala. Between the 4 of us, we
have a combined experience of more than 135 years in this industry. Based on
our experience, we would like to put in perspective the path taken by Coir
industry in Kerala over the years, the current challenges and possible outcomes
for the Coir industry in Kerala in general. We would like to focus on 3 main
themes – Productivity, High wages and Highly politicized/unionized
environment :

1. From the 50’s up until 90’s there was widespread opposition to

mechanization
2. The de-fibering industry which was extremely labour intensive and
polluting was the first sector that got mechanized in a large way. But
that mechanization happened in neighboring Tamil Nadu – not in
Kerala because the trade unions and even the governments in Kerala
opposed it
 51

3. With that move and the spread of commercial, large scale farming of
coconut trees in Tamil Nadu, the entire Coir fiber production started
shifting to Tamil Nadu. They had the coconuts in abundance, relatively
cheap labour force and far more efficient methods of production
4. The investors in Tamil Nadu who were running these fiber extraction
mills, continuously invested time and resources in improving the
efficiency of the whole fiber extraction process. Developing new and
more efficient machines, connecting various stages of fiber extraction
using conveyor systems, using customized low-cost tractors for
handling of husks, spreading of fiber for drying, etc… Just in the past
10 years, they have improved labour productivity by a factor of at least
5. That means they are at least 5 X times more productive today in
converting husk to fiber than 10 years back. And this process of
continuous improvement is never ending in Tamil Nadu and the
investors who invest in those machines and production systems reap
the benefits due to increase in productivity and resultant lower
incidence of labor cost, better economies of scale, etc.
5. This is something that could never happen in Kerala. Here, if we bring
in a machine to one of our organized factories, the unions will first run
the machine at half or lower of its rated output. Then they will fix a
basic piece rate for that job. From then on, that piece rate is not going
down – it will only go up based on periodic negotiations, strikes,
increases announced by Minister, etc. And most importantly, since
the wages have an almost 99.24% variable DA component, it will
shoot up with increasing DA. Even if you bring in a machine that is
twice as efficient, the unions will never agree to touch that basic piece
rate. So the investor who is investing in that new machine will end up
paying double the wages (total) but same unit rate with no
productivity gain. This is the reason why all mechanized forms of
production are leaving Kerala in general and Amabalappuzha/Cherthala
taluks in particular. No investor would ever want to invest in
mechanized forms of production in this area.
6. What was explained above with respect to Coir fiber extraction is now
coming true for Coir yarn spinning as well. Kerala is still predominantly
doing hand spinning. The output about 10 Kgs/person/day – hasn’t
changed in decades. Whereas, in Tamil Nadu, they have gone through
at least 4 to 5 generations of automated spinning machines wherein
the output currently stands at about 60 Kgs/person/day. And
increasing every year.
 52

7. The single largest item of export among Coir products today is PVC
backed Coir mat. Five years back, 100% of yarn required for the PVC
backing lines in Kerala was produced in Kerala. In fact, even the few
PVC backing lines in Tamil Nadu were taking yarn from Kerala.
Mechanized yarn production started catching up in Tamil Nadu over
past few years in a very large scale and they started to cater to needs
of PVC backing lines in Kerala and Tamil Nadu. Today all of the PVC
backing lines in Tamil Nadu and at least 50% of the units in Kerala are
using yarn from Tamil Nadu – all machine spun. The way it is going, it
will become 100% in Kerala in just a couple of years.
8. The government of Kerala is subsidizing the yarn spinning by paying
almost Rs 150 per day/worker in the Coir yarn spinning sector. Even
after that, they are not able to compete with the machine spun yarn
from Tamil Nadu both in quality and productivity/cost. The answer to
this can be even more subsidy to support a lost cause or adopting
modern and efficient methods of production that ensure good quality
of yarn to the industry and decent living wages to workers. The longer
we wait to make the decision, harder it is going to be to revive the
industry and larger the amount of money we will be spending on such
subsidies
9. The common thread is that the industry stayed in Kerala as long as
manual forms of production which required traditional skills of workers
was essential. Even though the productivity was low, there was no
option but to use those skill sets available only in Kerala in general and
Ambalappuzha/Cherthala taluks in particular. Then came mechanized
forms of production (by way of mechanized fiber extraction and
mechanized spinning) and the local industry – mainly the unions –
opposed it vehemently (like destroying fiber extraction machines in the
70’s) or took positions that killed any productivity gains (by refusing to
adjust piece rates according productivity gains). And
specialized/traditional skills were not needed to run these machines.
They could work anywhere with unskilled labour. Industry moved to
other areas where such mechanization was welcomed and fruits of
productivity gains could be shared fairly between the investors and
workers.
10. In the Coir industry, we have 3 main sectors: (1) Coir fiber extraction,
(2) Coir yarn spinning and (3) Coir mats/matting production. Fate of
the first and second sectors is explained above. The 3rd sectors
production of mats/mattings. It is the exact same scenario as the first
 53

two sectors. Traditional handlooms that produced these mats and

mattings have same productivity figures for decades. There were some
efforts by some investors to bring in power-looms. The same attitude
of unions in curtailing productivity gains and lack of encouragement by
government for modernization severely limited the spread of such
efforts. Over the past 25 years, PVC backing lines that are 100+ times
more productive (output per person/day) than traditional handlooms
have almost taken over the market. And these machines initially got
installed in the Amabalauzha/Cherthala region in the 1990’s as the raw
material (Hand-spun Coir yarn) was available only in this area. Today,
wages in these factories are about Rs 810/day or higher (Cost to
Company basis) whereas wages in neighboring Tamil Nadu is barely Rs
368.21 (again, Cost to Company basis) for exact same job. And Coir
yarn available in Tamil Nadu is cheaper and of better quality than what
is available in Kerala. With such a drastic difference in wages, there is
no way that this industry can survive here for long term in the current
form. Already newer units have started to function outside of
Amabalappuzha/Cherthala taluk and in other parts of Kerala closer to
Tamil Nadu and several units in Tamil Nadu. Detailed list if units are
available in our earlier notes.
11. To all these adverse factors, add the complexity of working in an
environment that is every bit politicized/unionized. Especially true for
the units working in Ambalappuzha/ Cherthala taluks. Frequent strikes
in different sectors – each and every one of them bringing the industry
to a halt. Delayed shipments result in huge penalties or cancellation of
orders. The unions always target the few remaining medium/large
scale organized factories in Ambalappuzha/ Cherthala taluks that pay
all the agreed wages and statutory benefits. There is a constant
demand for higher and higher wages in these units with absolutely no
inclination to even discuss about increase the productivity. Constant,
never ending cycle of negotiations leave the investors with little time
to concentrate on real business issues related to finance, marketing,
sales, product development, etc. It is evident now that new and
modern methods of production is needed in Coir industry. That calls
for organized, vertically integrated factories and such factories are
literally assaulted on a daily basis by the whole union/political system
prevailing here in this region. One more reason why new methods of
production is never going to catch up in Kerala in general and
Ambalauzha/Cherthala taluks in particular. And sorry to say that the
attitude of governments that come in power from time to time have
also not been supportive of sustaining the industry in this region. The
fundamental issues are never addressed by the changing
governments.
 54

This is where we are today. The remaining units in Kerala – especially in

Amabalappuzha/ Cherthala taluks – are finding it difficult to compete with more
efficient units working in Tamil Nadu and even in other parts of Kerala. It is only
a matter of time – few years – before the Coir industry in Kerala, especially in
Amabalappuzha/ Cherthala taluk will find it difficult to survive and will be forced
to close one by one. 2 out of 3 sectors have almost gone already. If we have to
sustain this industry here, we have to make some fundamental changes:
1. Wages: The wages prevalent in the Coir industry in Kerala, especially
in Ambalappuzha/ Cherthala taluks, is extremely high compared to
wages prevalent in Tamil Nadu for comparable jobs. We understand
that wages cannot be reduced. But the unprecedented increase in
wages over time which is due to almost 100% (99.24% now) link to
Variable DA has to be corrected. Part of the current variable DA
component has to be merged with basic wages. Any future increase
should only be in the basic (fixed) component. All common wage
revisions should be carefully studied, approved and implemented
by CIRC across Kerala.
2. Productivity: We have lost decades worth of productivity improvement
mainly because the unionized system prevalent in the industry that
was adamant for large increase in wages with absolutely no gain in
productivity. This has to change. We need to have a system where
decent living wages are ensured to the workers and such wages are
updated from time to time based primarily on improvement in
productivity.
3. Modernization: To have such improvement in productivity, the industry
has to invest in new machines and methods of production. It can be
very capital intensive. The Coir industry in Kerala is already in a weak
state competing with stronger emerging competitors in neighboring
states. Industry needs help from the government in this modernization
effort by way of grants/subsidies. That way, the workers can earn
more, the exporters can be more competitive and the industry as a
whole will be sustainable.
4. Industrial Peace: The constant cycle of strikes, work stoppages in
various sectors (in Handloom sector, finishing sector, organized
factories, stencil plate makers) cannot continue like this as that has
already given the Coir industry in Kerala a bad name as being
unreliable as compared to units working in Tamil Nadu. We need to
have long term agreements in place that are fairly negotiated and
settled from time to time and there should be industrial peace in
between letting business owners concentrate on critical business
functions. This is what we think is needed. We hope that you will
consider this overall perspective while formulating the final terms of
reference for this important KILE study. We thank you for your time
and attention so far.”
 55

2.4 Shifting of units to Tamil Nadu

Many of the major factories have already established factories in Tuticorin,
Pollachi, Thirupur and other parts of Tamil Nadu. Part of the manufacturing
process are carried out in these units and brought to the State for the final
conversion and export.
Eg. Aspinwall&Co.
Alleppey Coir Co.,
NC John & Co.
Floor Décor
Travancore Coir Company
Farm Fiber etc.

All the works are not now carried out in TN. Tufting has been started.
Mechanised spinning is fully established. Export of items has only commenced.
But major chunk of exports are done from the State. However, the frequent
strikes in the Cochin Port will influence the managements to shifting the export
to Tamil Nadu.

2.4.1 Reasons for the shifting of units to Tamil Nadu

The major reasons exposed by the managements for the shifting of the
units to TN are:
 difference in the cost of inputs
 Comparatively low wages,
 uninterrupted production,
 No trade unions,
 better quality
 disciplined work force
 machine mode of production
 gain in the benefits of mechanization
 uninterrupted power supply (improved recently)
 No strikes and sudden stoppages of work (No man days lost due to
strike for the past 11 years in a unit started 11 years ago)

Since the major factories have commenced their units in Tamil Nadu , if
the present issues in the industry in Kerala are not considered and
scientifically resolved the shifting of their whole business to the units in Tamil
Nadu in the near future cannot be discarded.
 56

2.5 Conclusion

The problem of managing labour especially in the large factories in

Alappuzha, Ambalappuzha and Cherthala has been highlighted with clarity and
concern. Senior leaders of the unions are requested to take the initiative and
objectively examine the facts and figures given in the write-up of the companies
whether the grievances of the managements are genuine and factually true from
the business point of view, especially in the context of strong competition posed
by the coir factories in Tamil Nadu and the frequent price fluctuation in the
international market.

Full exploitation of the current installed capacity of each factory has to

be assessed and the percentage of utilization could be easily worked out by a
small team consisting of representatives of senior union leaders, workers, FICEA,
Dept. of Labour and subject experts. The team could also assess the current
productivity status of labour and the overall cost of production per unit of each
product. Wages and perks have to be linked to their performance in
terms of standard outputs. It is desirable that negotiation for wage
settlements based on unscientific collective bargaining once in 3 – 5 years as a
practice has to give way to scientific facts and figures and business economics.
Integration of the interests of the management and that of labour through direct
negotiations sans strikes and lockouts should be the guiding principle in industrial
relations.

………………..
Chapter III
Coir Cooperative Societies

3.1 The context

Co-operativisation in coir sector was an important step to contribute to the
healthy growth of the industry. A widely held notion about co-operatives is that
coir co-operatives could provide optimum employment to the unemployed people
in the coastal areas and help improve their living conditions. Here, an attempt is
made to verify this claim.
The withdrawal of foreign capitalists from the coir sector and the inflow of
local industrialists and middlemen into the arena, created immense problems in
the sector. Middlemen and the local capitalists knocked off all profits from the
industry. Workers and small producers who depend entirely on the coir sector
had neither the capital nor any organisation to resist the onslaught of the local
capitalists and middlemen and hence, subjected to all kinds of exploitation.' This
state of affairs drew the attention of the Central and the state Governments.
 57

Consequently, the Government of India [1945] appointed a Committee

under the Chairmanship of KC. Karunakaran and the Government of Travancore
[1949] constituted another Committee under the Chairmanship of Smith to study
the issues related to the coir industry. These Committees recommended the re-
organisation of the industry on co-operative basis and a scheme was launched by
the erstwhile Government of Travancore in 1950 to cooperativise the industry.
(V.S. Jose, 2002)

The scheme was intended to assist the formation of viable coir co-
operative societies, and for the revitalisation of dormant societies. About 76 per
cent of the total coir societies in India are located in Kerala, followed by Tamil
Nadu, Andhra Pradesh and Karnataka. Ninety-three per cent of the members of
the coir societies and 74 per cent of the work-force belong to Kerala.
Membership in cooperative sector is more in Kerala than in other states.

Table No. 3.1

Coir Cooperative Societies in Kerala

Sl. No. of Societies as No. of Societies as

Type of Society
No. on 31-03-2014 on 31-03-2015
1 Primary Cooperative Societies (Yarn Sector)
a) Working 391 420
i. Profit 109 109
ii. Loss 282 311
iii. Total (1a) 391 420
b) New societies which have not started working 142 120
c) Dormant Societies 85 74
Total (1) 618 614
2 Manufacturing Societies (Mats & Mattings)
a) Working (started production) 31 31
i. Profit 15 12
ii. Loss 16 19
iii. Total (2a) 31 31
b) New Societies which have not started working 4 3
c) Dormant Societies 17 18
Total (2) 52 52
3 Small-scale Producers Cooperative Societies
 58

a) Working 54 49
i. Profit 26 37
ii. Loss 28 12
iii. Total (3a) 54 49
b) New Societies which have not started working 4 5
c) Dormant Societies 5 9
Total (3) 63 63
4 Husk Procurement and Distribution Societies
a) Working 1 1
i. Profit
ii. Loss 1 1
iii. Total (4a) 1 1
b) New Societies which have not started working
c) Dormant Societies
Total (4)
Continued on next page
5 Fiber Societies (DF Mill Socities)
a) Working 21 22
i. Profit 4 6
ii. Loss 17 16
iii. Total (5a) 21 22
b) New Societies which have not started working 21 20
c) Dormant Societies 29 26
Total (5) 71 68
6 Samyojitha Society
a) Working 5 13
i. Profit
ii. Loss 5 13
iii. Total (6a) 5 13
b) New Societies which have not started working 55 43
c) Dormant Societies
Total (6) 60 64
7 Cooperative Coir Marketing Federartion
8 ICDP Societies
a) Working 56 56
i. Profit 13 13
ii. Loss 43 43
iii. Total (8a) 56 56
 59

b) New Societies which have not started working 4 4

c) Dormant Societies 3 3
Total (8) 63 63
9 Total No. of Cooperative Societies
a) Working 503 536
i. Profit 154 164
ii. Loss 349 372
iii. Total (9a) 503 536
b) New Societies which have not started working 226 191
c) Dormant Societies 136 137
d) Societies under liquidation 105 129
Total (9) 970 993
Source: Coir Development Directorate, GoK
 60

Table No. 3.2

Proforma
Activities of Coir Co-operative Societies
a. Yarn sector
Husk Purchased Fiber Purchased Yarn Produced
No. of
No. of Number (in Qty Qty Wages paid
Year working Value (lakh) Value (lakh) Value (lakh)
workers lakh) (Tonnes) (Tonnes) (in lakh)
societies

2009-10 314 145904 100.33 61.02 7683.58 626.49 7298.66 1417.31 619.14

2010-11 378 165341 69.22 3620.14 10354.09 1356.43 44834.56 4038.47 1287.22

2011-12 378 155832 84.12 127.24 11109.8 1679.84 7922.29 3177.19 1461.01

2012-13 369 155401 77.89 81.69 13828.43 1862.47 10795.06 2888.27 1828.97

2013-14 391 162714 78.34 81.09 14290.17 2643.59 43888.89 4563.28 1308.69

2014-15 420 181134 83.21 101.22 20634.89 2906.14 9071.78 5593.07 2733.27

Source: Coir Development Directorate - 2015

 61

3.2 Objectives of the cooperativisation scheme

The scheme is aimed at:

1. solving the problems of the actual workers and small producers engaged
in the industry
2. ensuring them regular work and a living wage
3. stabilising the industry on a sound and stable footing by cutting out
middlemen and to stop all corrupt practices; and
4. establishing improved standards and quality so as to attract and ensure a
better market for coir products.

The scheme included various assistance such as:

1. Share capital assistance for formation of new societies and revitalisation

of dormant ones
2. Managerial subsidy
3. Assistance for purchase /modernisation/ renovation of equipment /
looms etc.
4. Marketing assistance for opening of sales outlets for sale of coir products
by apex coir co-operatives.

3.3 Types of societies

1. Thondu Vyayasaya Society

The basic objective of this type of society is to collect green husk
from coconut producers and copra producers. The society supplies the husk
to the primary yarn producing society at a reasonable price. In other words,
it is a feeder society to the production society.

2. Fiber Society

The objective of this type of society is to supply fiber to Coir

Vyavasaya Cooperative Societies (CVCS). They purchase green husk or dry
husk and extract brown fiber with the help of husk-beating machines. They
supply fiber so extracted to coir vyavasaya societies. Members of these
societies are coir workers.
 62

3. Coir vyasaya co-operative society

The basic function of this type of society is production of coir yarn.
The activity is carried on either at the society's premises or at the residence
of members. The members have to return the yarn to the society which
markets it through COIRFED. Membership of this society is open to all
engaged in the production of yarn or fiber in the area of operation of the
society. Sympathizers are also given membership to the extent of 7 per
cent of total membership of these societies. Management of the business is
vested in a seven member board, of whom five are elected from among the
coir workers of the society.

The Primary Coir Vyavasaya Co-operatives act as an important link in

the chain of marketing of coir fiber and yarn. The business operations of
primary societies comprise of purchase of raw husk, retted husk and fiber
for processing and sale to central marketing societies. Manufacturing
activities are carried out either in the yard of societies or at the residence of
members. The manufactured articles will be kept in godowns of societies
before selling them to Coirfed. Every primary society is required to sell its
produce to the Coirfed at a price prescribed by the apex body.

4. Mats and Mattings Societies

Mats and Mattings societies produce mats, mattings, rugs and

carpets needed for households, institutions and business firms. They buy
coir yarn from coir vyavasaya societies and small-scale yarn producing
firms. The coir vyavasaya societies thus act as feeder firms to Mats and
Matting Societies. These are concentrated in Alappuzha District.

5. Small-scale producers’ societies

These are engaged in the production of coir products. The aim of
these societies is to find market for the products of its members and to
secure reasonable price. About ten thousand societies are now functioning
in Kerala.

3.4 Coirfed
It is the single marketing agency with state-wide jurisdiction over primary
coir societies. Coirfed either sells yarn to manufacturing units or use it to make
coir products either in its own units or through its accredited small-scale
manufacturers.
 63

3.4.1 Objectives of the federation

 To ensure them regular work and a decent wage

 To stabilise the industry on a sound and stable footing by eliminating
middlemen and to stop all corrupt practices,
 To establish improved standards and quality so as to attract and ensure a
better market for coir products.
 The Scheme of Coir Development was so designed to bring all persons
engaged in coir industry into the co-operative fold by forming three
categories ofsocieties, Viz.,
 The Thondu Vyavasaya co-operative societies for collection and supply of
green husk.
 The Coir Vyavasaya Co-operative societies for actual production of yarn.
 The Coir Marketing Societies to market the yarn produced by member
societies in favourable markets.

3.4.2 Activities

 To arrange for the purchase and sale of coir fiber, yarn and other coir
products belonging to the affiliated societies to the best advantage within
the Indian Union and outside
 To rent, purchase or own administrative offices, godowns, sales depots,
sub offices and branch offices within the jurisdiction of the federation.
 Purchase and distribution of raw materials, establish plant and machinery
and research centres.
 Running warehouses inside and outside the country.
 Undertaking retting of husk, production of fiber, coir yarn and coir goods.
Raising funds required for the business by way of loans, grants and other
contribution from Government, Reserve Bank of India and other financial
institutions. Extend loans to member societies and conduct credit sales to
Government Agencies and co-operative institutions. Undertake inter-state
trade and export coir and coir products.
 Render services like undertaking grading, packing, standardisation, supply
of market news, technical advice, guidance, arranging transport, shipping,
clearing and forwarding of goods.
 Act as agent on behalf of Government or any other institution for the
procurement, supply, distribution and production of husk, coir and coir
products.
 64

 Supervise, develop, assist and co-ordinate the activities of affiliated

societies.
 Act as an exponent of co-operative opinion in matters relating to coir and
coir products.
 Arrange for the holding of periodical conferences and seminars on coir
industry, publishing of periodicals and booklets for the stabilisation and
development of coir industry.
 Function as the agent of the State Government and or Central
Government or any other agency authorised by the Central or state
Government in implementing the programmes for the development of the
coir industry.
It undertakes the responsibility of procurement and storage of the entire
products of the primary societies. It has four regional offices at Kozhikode, Kochi,
Kollam and Alappuzha, through which the procurement is made and arranges
their sales through its own show rooms and agency showrooms in different parts
of the country. The purchase price for coir produce of each society is fixed on
the basis of cost and quality plus 10 per cent margin.

3.5 Coir cooperative units

The study team selected four circles as representative regions from
Alappuzha, Karunagapally, Kundara, and Chirayinkeezhu. Facts and figures were
collected through semi-structured interviews, observation of the working of the
units, examining the documents made available and interactive sessions with the
officials involved in the promotion of the sector.

3.6 The ground realities

Table No. 3.3

Details of Coir Projects in Kerala and Kollam circle

Project office No. of

Sl. Name of the
under Kollam operating
No. project
circle societies
1. Chirayinkeezhu 1.Karunagapally 14
2. Kollam 2.Chavara 9
3. Kayamkulam 3.Adoor 9
4. Alappuzha 4.Panmana 5
5. Vaikom 5.Perinadu 11
6. North Paroor 6.Kollam 15
7. Thrissur 7.Kundara 14
8. Ponnani 8.Adoor 5
9. Kozhikode
10. Kannur
TOTAL 82
 65

Under Kollam project office, there are 8 circles with 82 CVCS.

Karunagapally and Kundara are two circles selected as samples. These two
circles consist of 14 CVCS each.

Kollam Project

Table No. 3.4

Functional Classification –Category-wise 2014-15 Kollam Circle

Not yet
Sl Type of Non - Under
Operating commenced Total
no society operating liquidation
production
Coir co-
1 82 22 22 28 154
operatives
Mats and
2 - 1 1 - 2
mattings
Mechanised
3 defibering - 2 - - 2
units
4 Others(apex) - - - 1 1
TOTAL 82 25 23 29 159

Table No. 3.4 provides a detailed account of the functional status of CVCS circle-
wise under Kollam project office. As per the Table, out of the 159 units, the number of
functional ones is only 82 (51.6 per cent). Seventy-seven are dysfunctional.

Table No. 3.5

Operational Summary of CVCS, Kollam Circle
Sl.
Particulars No. of Units
No
1 No. of circles 8
2 No. of coir producing co-operatives 82
3 Total number of members 45488
4 Number of sympathisers 43023
5 Number of workers engaged in production 1404
6 Average number of working days 123
7 Total amount of wages paid 1.902 cr
8 Total amount of bonus paid 26.61 lakh
9 Staff salary paid 65.33 lakh
10 Direct benefit transfer as incentive 1.40 cr
11 Quantity of fiber used (1.96 qtl) 2.312 cr
12 Quantity of coir produced (8182 qtl) 3.96 cr
13 Average percentage of out-turn 80
14 Cost of production of coir per qtl Rs.4893
15 Loss per quintal (4893-4600) Rs.293
16 Quantity and value of coir sold (18144qtl) Rs.3.88 cr
 66

Table No. 3.5 is self explanatory as it is a summarized statement of the

performance of the coir co-operatives under Kollam circle for the year 2014-2015 in
different respects.

Table No. 3.6

Statement of Output, Kollam Circle (2005-06 to 2014-15)

Output Value Increase Decrease
Year Profit (%) Loss (%)
(Qtl) (in Rs.) (in Rs.) (in Rs.)
2004-05 6801.00 16597878 - - - -
2005-06 7790.00 19188484 2590606 15.61
2006-07 4274.00 8910911 7686967 46.31
2007-08 6105.34 15907975 689903 4.16
2008-09 8007.33 23947363 7349485 44.28
2009-10 5328.00 14253689 2344189 14.12
2010-11 5821.00 21147151 4549273 27.41
2011-12 6056.04 28579534 11981656 72.19
2012-13 8379.38 30708929 14111051 85.02
2013-14 8040.50 34505984 17908106 107.90
2014-15 8181.63 39566000 22968122 138.38

Output-wise comparative statement of CVCS under Kollam circle for a period of

11 years commencing from 2004-05 to 2014-15 are given in Table No. 3.6. These
statement provides an analytical picture of CVCS under Kollam circle stating, the
percentage of increase or decrease of production for the period under review by taking
into account the value of the output of 2004-05 as the base year. In terms of output,
the increase in the production for the above period reveals that the increase is only to
the extent of 1380.63 quintals only (20.03 percent). It gives an unsatisfactory picture
of the growth and development of this industry over more than a decade’s period. In
terms of its value, the increase comes to the tune of 229.68 lakh rupees (138.38
percent). It can be seen that in terms of value, the output has doubled over the above
period. This growth was very low when converted in terms of the real value of money,
in terms of the base year price.
 67

Kundara Circle
Table No. 3.7

Stock turnover ratio of Coir Co-operative Society in Kundara Circle

Purchase and
Opening
Sl. Direct Closing Stock Stock turnover
Name of Society stock (in
No Expenses (in (in Qtl) Ratio
Qtl)
Rs.)
1 Velliman CVCS No. 293 66,148.00 777,830.00 0.00 25.52
2 Pambalil CVCS No. 864 0.00 844,261.00 17,940.00 92.12
3 Kandachira CVCS No. 50 0.00 604,462.00 0.00 0.00
4 Cherumoodu CVCS No. 119 0.00 727,882.00 0.00 0.00
5 Kanjirakodu CVCS No. 358 0.00 307,570.00 1,886.00 324.16
6 Pulikuzhi CVCS No. 626 0.00 1,205,328.00 0.00 0.00
7 Kuzhiyam CVCS No. 629 782.00 356,626.00 1,334.00 336.55
8 Charukkadu CVCS No. 631 0.00 871,679.00 53,636.00 30.50
9 Velliman East CVCS No. 861 6,578.00 725,575.00 0.00 222.61
10 Nandirikal CVCS No. 862 11,720.00 199,291.00 14,352.00 15.09
11 Pambalil East CVCS No. 866 0.00 1,090,120.00 0.00 0.00
12 Kanjirakodu CVCS No. 872 5,198.00 483,696.00 17,434.00 41.66
13 Perinadu CVCS No. 873 127,420.00 1,549,884.00 0.00 26.33
14 Chemmakadu CVCS No. 300 0.00 1,016,437.50 50,646.00 38.14

The stock turnover ratio of coir co-operatives in Kundara circle shows Kuzhiyam
CVCS No.629 has the highest inventory turnover ratio (336.55 times) and brisk sales.
The second highest stock turnover ratio goes to Kanjirakodu CVCS No. 358 (324.16
times). This result reveals the sales efficiency of these societies. The low stock
turnover ratio results in blocking of funds in inventory. The stock turnover ratios of four
societies are not computed due to lack of sufficient data. This is because in most of the
societies, proper accounting system for any type of financial transaction is not kept. It
reveals that the coir inspectors evade from their responsibilities of effective inspection.
 68

Table No. 3.8

Comparative Income Statement of Vellimon CVCS No. 293

for the year ended 2014 and 2015
Net Net
Particulars 2013-14 2014-15 Increase Decrease Increase Decrease
% %
Sales 818,943.00 772,800.00 46,143.00 (5.63)
Less: Cost of
762,080.00 777,830.00 15,750.00 2.07
Goods sold
Gross
56,863.00 (5,030.00) 61,893.00 (108.85)
profit/loss
Less:
193,184.00 118,737.22 74,446.78 (38.54)
Admin.expenses
Selling Expenses 15,650.00 15,000.00 650.00 (4.15)
Total Operating
208,834.00 133,737.22 75,096.78 (35.96)
expenses
Operating
(151,971.00) (138,767.22) (8.69)
Profit/loss 13,203.78
Add: Non-
89,224.25 54,576.00 34,648.25 (38.83)
Operating income
Net
(62,746.75) (84,191.22) 34.18
profit/Loss 21,444.47

The comparative income statement reveals that there is no wide

variation in the sales value of this society for the current year. The cost of goods sold
also increased (2.07 per cent) in the current year as compared to previous year 2013-
14. The society earns gross profit in 2013-14 and incurred gross loss in 2014-15. This
was due to the fact that there is a net increase in the volume of cost of goods sold. As
the total operating expenses decreased in the current year, there was a corresponding
reduction in the operating loss also. The net loss of the society increased (34.18 per
cent) in the current year as compared to previous year. This society has provided
employment opportunities to 14 workers for 227 days led to the generations of 3178
labour days in the current year. Generation of more labour days reveals that the
sincerity of the society towards adherence of the co-operative principles in providing
employment opportunities to the workers.
 69

Table No. 3.9

Performance Evaluation Statement of CVCS (Kundara Circle) 2013-14

No. of No. of No. of Profit Loss on

Sl. Name of the Total Total
working working Labour Profit Loss on sales cost
No. society cost revenue
labour days days

1 Vellimon CVCS
14 227 3178 777730 818943 41223 5.03
no.293
2 Pampalil CVCSs
18 250 4500 973586 966350 7236 0.74
no.864
3 Kandachira
15 149 2235 581230 540176 41054 7.06
CVCSs no.50
4 Cherumoodu
11 193 2123 585218 560346 24872 4.25
CVCSs no.119
5 Kanjiracode
8 40 320 70016 59118 10898 15.57
CVCSs no.358
6 Pulikuzhi CVCSs
16 270 4320 1261835 1301593 39758 3.05
no.626
7 Kuzhiyam
13 102 1326 280347 244525 35822 12.78
CVCSs no.629
8 Charukadu 14 195 2730 815990 779929 36061 4.42
 70

CVCSsno.631
9 Vellimon east
13 184 2392 590297 574033 16264 2.76
CVCSs no.861
10 Nanthirical
12 152 1824 205087 173996 31091 15.16
CVCSs no.862
11 Pampalil east
16 263 4208 1269746 1245715 24031 1.9
CVCSs no.866
12 Kanjiracode
9 303 2727 481067 439195 41872 8.7
CVCSs no 872
13 Perinadu CVCSs
28 203 5684 1646880 1642864 4016 0.24
no.873
14 Chemmakkadu
20 152 3040 1035168 924554 110614 10.69
CVCS no300
 71

Table No. 3.9 analyzes the operational particulars of CVCS under Kundara circle.
Details regarding the number of workers engaged in production, total number of days
of operation, total number of labour days generated per society, cost and revenue per
labour day and income generated surplus or deficit attributed to loss etc. is measured.
It is observed that out of 13 CVCS under Kundara circle, two units - Vellimon No.293
and the other Pulikkuzhi No.626, have generated labour surplus to the tune of Rs. 5
and Rs. 3 respectively per labour day. All the other 11 CVCS have added deficit to the
pool of loss. Among the loss generating units, Kanjiracode CVCS No. 358 and
Nanthirical CVCS No. 862 had made the maximum deficit per labour day (Rs.15.57 and
Rs 15.16).These results reveal that if the units remain shut down and made non-
operative, the quantum of loss can be reduced to the extent of Rs 15 per labour day.
The fear of mounting-loss phobia encourages majority of the managements to keep the
units as non-functioning.
 72

Table No. 3.10

Statement of Labour Efficiency of CVCS Kundara Circle 2014-15

Revenue
No. Total Cost per
No. of No. of Total from Difference Percentage
Sl. Name of the of revenue labour
working labour cost labour
No. society working day
days days (Rs.) day (Rs.) (Rs.)
labour (Rs.) (Rs.)
(Rs.)
1 Vellimon CVCS No.293 14 227 3178 777730 818943 244.72 257.70 12.96 5.03
2 Pampalil CVCSs No.864 18 250 4500 973586 966350 216.35 214.74 -1.60 -0.74
3 Kandachira CVCSs
15 149 2235 581230 540176 260.05 241.69 -18.36 -7.06
No.50
4 Cherumoodu CVCSs
11 193 2123 585218 560346 275.66 263.94 -11.71 -4.25
No.119
5 Kanjiracode CVCSs
8 40 320 70016 59118 218.8 184.74 -34.05 -15.57
No.358
6 Pulikuzhi CVCSs
16 270 4320 1261835 1301593 292.09 301.29 9.20 3.05
No.626
7 Kuzhiyam CVCSs
13 102 1326 280347 244525 211.42 184.40 -27.01 -12.78
No.629
8 Charukadu CVCSs
14 195 2730 815990 779929 298.90 285.69 -13.20 -4.42
No.631
9 Vellimon east CVCSs
13 184 2392 590297 574033 246.78 239.99 -6.79 -2.76
No.861
10 Nanthirical CVCSs
12 152 1824 205087 173996 112.44 95.39 -17.04 -15.16
No.862
11 Pampalil east CVCSs
16 263 4208 1269746 1245715 301.75 296.03 -5.71 -1.9
No.866
12 Kanjiracode CVCSs No
9 303 2727 481067 439195 176.41 161.05 -15.35 -8.7
872
13 Perinadu CVCSs
28 203 5684 1646880 1642864 289.74 289.03 -0.71 -0.24
No.873
14 Chemmakkadu CVCS
20 152 3040 1035168 924554 340.51 304.11 36.38 0.11
No.
 73

The Table provides a cost-volume profit analysis of the performance of CVCS

under Kundara circle for the financial year 2013-14. The macro level analysis of the
profit and loss statement is given in the Table. The micro level (per labour day) and the
macro level (CVCS level) results of this analysis reveal the uniformity of loss
percentages.

Vellimon and Pulikkuzhi CVCS make profit whereas all the other 11 CVCS make
losses of which Kanjiracode and Nanthirical contributes heavily (15% loss each). Strictly
speaking, Perinadu CVCS out-performed all other CVCS by generating maximum labour
days (5684) at a minimum level of loss (0.243 percent). This indicates the operational
commitment of the management of the society and adherence to the co-operative
objective of providing maximum number of days of work to the workers despite keeping
the unit non-functional to reduce the operating loss.

Karunagapally circle
In order to have a clear understanding about the performance and functioning of
the co-operative segment, a detailed analysis about the sampled societies located in
Karunagapally, Kundara and Alappuzha circles are made. A detailed examination of the
financial statement of those societies is made. The result of the analysis of the profit
and loss statements of the societies in Karunagapally circle is given in Table 2.01.
Karunagapally circle consists of 13 operational CVCS.
Table No. 3.11

Gross Profit/Loss of Coir Co-operative Societies in Karunagapally circle

Sl.
Name of Society Sales Cost Profit/loss Gross profit
No
Ratio
Adhinadu North CVSS
1
No. 488 90,270.00 110,543.00 (20,273.00) (22.46)
Alappadu Mannel
2
kadavu CVSS No. 868 181,196.00 285,009.80 (103,813.80) (57.29)
Ayanivelikulangara
3
CVSS No.497 143,004.00 238,921.90 (95,917.90) (67.07)*
255,827.00
4
Clappana CVSS No.431 1,777,551.00 1,521,724.00 (Profit)
14.39*
Karunagappaly CVSS
5
No.3067 134,385.00 192,987.00 (58,602.00) (43.61)
 74

Kattilkadavu CVSS No.

6
389 90,504.00 123,931.00 (33,427.00) (36.93)
7 Kozhikodu CVSS No.74 39,375.00 50,867.00 (11,492.00) (29.19)
Maruthurkulangara
8
North CVSS No.474 301,905.00 461,200.00 (159,295.00) (52.76)
Pallikadavu CVSS
9
No.844 1,073,484.00 1,074,501.00 (1,017.00) (0.09)*
Prayyar South CVSS
10
No. 547 161,400.00 195,039.00 (33,639.00) (20.84)
Puthumannelkadavu
11
CVSS No.874 625,350.00 709,295.00 (83,945.00) (13.42)
Thurayilkunnu CVSS
12
No.327 274,809.00 416,082.00 (141,273.00) (51.41)
Vazhakuttathilkadavu
13
CVSS No. 642 616,036.00 719,745.00 (103,709.00) (16.83)

Source: Project report, Kollam circle

Table No. 3.11 shows the operating profit/loss of the societies in

Karunagapally circle for the period of 2014-15. The result of analysis reveals that
Clappana CVSS No. 431 is the only society which makes profit from the coir
business in this region. Ayanivelikulangara CVSS No. 497 has made record loss of
(67.0 per cent) compared to other societies. It is found that this society has
made a limited sales activity. The lowest gross loss (0.09 per cent) incurred in
this circle belongs to Pallikkadavu CVSS No, 844. The percentage of loss closely
relates to its operational activities. It is found that the volume of loss cumulates
directly in proportion to the increase in the number of working days in a year.
 75

Table 3.12

Stock turnover ratio of

Coir Co-operative Societies in Karunagapally circle

Stock
Sl. Opening Purchase and Closing
Name of Society turnover
No stock Direct expenses Stock
Ratio
Adhinadu North 0 97,920.00 7,650.00 23.60
1
CVCS No. 488
Alappadu Mannel
2 kadavu CVCS No. 64,578.00 103,122.00 63,558.00 1.63
868
Ayanivelikulangara 0 143,004.00 0 0.00
3
CVCS No.497
Clappana CVCS 0 1,736,167.00 240,304.00 12.45
4
No.431
Karunagappaly 55,358.00 73,334.80 5,692.20 5.41
5
CVCS No.3067
Kattilkadavu CVCS 24,517.50 80,822.00 14,835.50 4.60
6
No. 389
Kozhikodu CVCS 0 39,375.00 0 0.00
7
No.74
Maruthurkulangara 22,500.00 288,805.00 9,400.00 18.93
8
North CVCS No.474
Pallikadavu CVCS 0 1,073,484.00 0 0.00
9
No.844
Prayar South CVCS 0 105,800.00 6,440.00 30.86
10
No. 547
Puthumannelkadav 0 692,462.00 67,112.00 18.64
11
u CVCS No.874
Thurayilkunnu 0 274,809.00 0 0.00
12
CVCS No.327
Vazhakuttathilkada 0 616,036.00 0 0.00
13
vu CVCS No. 642
Kettidathil Kadavu 0 29,704.20 29,704.20 0.00
14
CVCS No.Q1107

The stock turnover ratio of Prayer South Coir Co-operative Society in

Karunagappally circle shows that the inventory turnover ratio is 30.86 times.
Stock turnover ratio of Aadinadu North CVCS No. 488 shows the second highest
(23.60 times). A low stock turnover ratio results in blocking of funds in inventory
that leads to financial crisis. The results of seven societies were not given in the
Table, as these societies do not have neither opening nor closing stock. These
societies are partially functional units.
 76

A detailed examination of the individual societies has provided vital

information relating the problems and prospects faced by these units. Table No.
3.13 presents the details regarding the comparative performance evaluation of
Adinadu North CVCS No.488.

Table No. 3.13

Comparative Income Statement of Aadhinadu North CVCS No. 488

for the year ended 2014 and 2015

2013-14 2014-15 Net Increase/ Decrease

Particulars
%
Sales 544,492.00 90,270.00 (454,222.00) (83.42)
Less: Cost of goods sold 598,314.00 103,943.00 (494,371.00) (82.63)
Gross profit/loss (53,822.00) (13,673.00) 40,149.00 74.60
Less: Admin. Expenses 187,880.00 161,024.00 (26,856.00) (14.29)
Selling expenses 16,236.00 6,600.00 (9,636.00) (59.35)
Total operating expenses 204,116.00 167,624.00 (36,492.00) (17.88)
Operating profit/loss (257,938.00) (181,297.00) 76,641.00 29.71
Add: non-operating income 0.00 0.00 0.00 0.00
Net profit /loss (257,938.00) (181,297.00) 76,641.00 29.71

The comparative income statement analysis reveals that, at present, this

society is running at a loss. The society’s net loss in 2013-14 was -257938
and -181297 in 2014-15. It shows that there is a decreasing trend in
production and sales over the previous year. The gross loss shows a decrease in
the current year (74.60 %). The net loss of the society reveals that only 29.71
per cent decrease was there in 2014-15, because the increase of operating
expenses of the current year is marginal compared to 2013-14. The low volume
of sales due to the low production and low level of operation reveals the
reluctance on the part of the management to provide more days of employment
to the workers in order to avoid the accumulating volume of loss.
 77

Table No. 3.14

Statement of Labour Efficiency (2014-15) Circle: Karunagapally

Revenue
No. of Cost
Total per Percent
Sl. Name of society Total cost labour /labour Difference
revenue labour age
No day day
day
1. Aadhinadu North
110543 90270 870 127.06 103.76 -23.30 -18.34
C.V.S.S No.488
2. Alappadu Mannel
kadavu C.V.S.S. 285009.8 103122 325 876.95 317.30 -559.66 -63.82
No.868
3. Ayanivelikulangara
238921.9 143004 750 318.56 190.67 -127.90 -40.15
C.V.S.S. No.497
4. Clappana C.V.S.S.
1467974 1736167 9612 152.72 180.62 27.90 18.27
No.431
5. Karunagapally
192987 73334.8 1000 193 73.33 -119.65 -62.00
C.V.S.S. No.3067
6. Kaattilkadavu C.V.S.S.
123931 80522 319 388.50 252.42 -136.08 -35.03
No.389
7. Kozhikode C.V.S.S.
50867 39375 81 628 486.11 -141.88 -22.60
No.74
8. Maruthurkulangara
445157 288805 1320 337.24 218.80 -118.45 -35.12
North C.V.S.S. No.474
9. Pallikadavu C.V.S.S.
446724 1073484 4144 107.80 259.05 151.25 140.30
No.844
10 Prayer South C.V.S.S.
116539 105800 432 269.77 244.91 -24.86 -9.21
No.547
11. Puthu Mannel Kadavu
698585 692462 2646 264.02 261.70 -2.32 -0.88
C.V.S.S. No.874
12. Thurayil Kunnu
184031 274809 2250 81.80 122.14 40.35 49.33
C.V.S.S. No.327
13. Vazhakoottathil
Kadavu C.V.S.S. 719745 616036 3576 201.27 172.27 -29 -14.41
No.642
14. Kettidathil Kadavu
-- 29704.2 205 0 144.90 144.90 --
C.V.S.S. No.Q1107
Total 5081014.7 5347095 27490
 78

Table No. 3.14 reveals the efficiency level of labourers working in various CVCS
under Karunagapally Circle for the year 2014-15. As per the data, Thurayil Kunnu ranks
top with a surplus of 49 per cent and Clappana ranks second with 18 per cent. All the
other 12 societies out of the total 14 are loss-making units. As the data of one CVCS,
(Kettidathil Kadavu) is not available, computation has not been done with regard to that
society. It is observed that the overall performance of this circle is below satisfactory
level.
The comparative income statement analysis of Vazhakoottathil kadavu CVCS
reveals increasing trend in the sales value (13.17 per cent). The cost of goods sold in
the current year shows the same trend as compared to previous year (2013-14). The
stability of cost of goods sold in the current year supports the decrease in the gross and
net loss for the current year. The performance level of this society reveals its efficiency.
Instead of increasing the net loss with increase in the volume of sales, it recorded a
decline (8.35%). This society has rendered sufficiently longer period of working days to
its employees namely, 3536 labour days.
 79

Table No. 3.15

Statement of profit or loss for the year 2014-15

(CVCS Karunagapally Circle)
No. No. of
No. of labour Total Total
Sl. Name of society of working Profit/ loss Percentage
days cost revenue
No labourers days
Aadhinadu North C.V.S.S
1. 29 30 870 110543 90270 (20273) -18.34
No.488
Alappadu mannel kadavu
2. 13 25 325 285009.8 103122 (181887.8) -63.82
C.V.S.S. No.868
Ayanivelikulangara
3. 25 30 750 238921.9 143004 (95917.9) -40.15
C.V.S.S. No.497
4. Clappana C.V.S.S. No.431 36 267 9612 1467974 1736167 268193 18.27
Karunagapally C.V.S.S.
5. 10 100 1000 192987 73334.8 (119652.2) -62.00
No.3067
Kaattilkadavu C.V.S.S.
6. 29 11 319 123931 80522 (43409) -35.03
No.389
7. Kozhikode C.V.S.S. No.74 9 9 81 50867 39375 (11492) -22.60
Maruthurkulangara North
8. 33 40 1320 445157 288805 (156352) -35.12
C.V.S.S. No.474
Pallikadavu C.V.S.S.
9. 16 259 4144 446724 1073484 626760 140.30
No.844
Prayer south C.V.S.S.
10 12 36 432 116539 105800 (10739) -9.21
No.547
Puthu mannel Kadavu
11. 18 147 2646 698585 692462 (6123) -0.88
C.V.S.S. No.874
Thurayil Kunnu C.V.S.S.
12. 45 50 2250 184031 274809 90778 49.33
No.327
Vazhakoottathil Kadavu
13. 34 104 3536 719745 616036 (103709) -14.41
C.V.S.S. No.642
Kettidathil Kadavu
14. 5 41 205 29704.2 29704.2 -18.34
C.V.S.S. No.Q1107
Total 314 1149 27490 5081014.7 5347095 (266080.3)
 80

Table No. 3.15 shows the statement of profit or loss made by the societies under
Karunagapally circle for the period of 2014-15. As labour surplus percentage equates
with the performance efficiency of the CVCS, the per cent of surplus or deficiency is the
same figure as that of the Table No. 3.14. Pallikkadavu CVCS has proved as the most
inefficient unit with 140 per cent loss followed by Puthumannel Kadavu with 64 per cent
loss. A lot of reasons are there for the poor performance of these societies. Among
them, higher cost of raw materials and lower level of revenue returns are the reasons
for the poor performance of the societies.

Coir Co-operatives in Alappuzha Region

At present, no traditional and functional defibering units are there in Alappuzha and
Kollam Circles. Based on the method of operation, co-operative societies may be
classified into three groups namely;

 Societies manufacturing coir in the traditional way

 Fully mechanized societies and
 Societies manufacturing coir in the traditional as well as in the mechanised way

For the year 2012-13, this region manufactured coir to the level of 23882
quintals of fiber costing Rs.900.45 crore. A coir worker of a society who produces 20kg
of coir on an average is eligible for a daily wage of Rs.300 (Rs.190 from the society and
Rs.110 as incentive from Coirfed). The standard output that can be produced from one
quintal of fiber ranges from 75 to 90 kgs. of coir (outage). In Alappuzha region, the
total quantity of coir manufactured during 2011 was 18686 quintal and for 2012 it was
23881 quintal. During the period of one year, the increase in the production of coir was
to the extent of 5195 quintals. Regarding the activities of mat and mattings, out of the
26 co-operative societies functioning 7 units made profit, whereas 19 were operationally
loss-making units.
 81

Table No. 3.16

Summarised Report of
Alappuzha Coir Project 2014-15

Quantity of coir produced in quintal 28211.33

Quantity of coir produced in price 16.15 crores
Quantity of fiber produced in quintal 664.89
Quantity of fiber produced in price 7.18 lakh
Number of coir societies 56
Number of members worked 6258
Qty produced per unit of two workers: 20 kg/day
Salary per worker Rs.300/day
Qty of coir produced in the last year 30529.53 qtl
Qty of coir produced in the current year 28545.42
Shortage 1984.11
Membership in coir societies 34,756 (11%)
Workers in private sector 2, 77,244 (89%)
Total number of workers under Alappuzha 3,12,000 (100%)
Coir project

It is observed that in the year 2014-15, workers’ number reduced considerably.

Reason for the reduction is that a section of the coir workers shifted their area of
operation to MNREGP scheme. The wage per day to a labourer in MNREGP is Rs.385/-
comparatively higher than what they get from coir units. Under the scheme, workers
generally do less quantum of work and less working hours.

Table No. 3.17

Volume of Production, Sales and Profit 2014-15
CVCS Cherthala Circle

Total
Total Sales Profit/Loss
Sl. No. Name of the Society Production
(Rs.) (Rs.)
(Rs.)
1 Nedumpurakkad CVCS 552 18286550 10618411 238278
2 Chenganda CVCS 555 13753050 14196987 207981
3 Poothotta CVCS 825 1037200 1007010 -29105
4 Kalathiveedu CVCS 1108 11187750 11222420 35214
5 Thirunalloor CVCS A558 5435000 5330817 285720
 82

Table No. 3.18

Comparative Functional Statement of CVCS Under Cherthala Circle
No. of
Name of working No of Increase/
days % workers % Wages paid %
Society Decrease
2013- 2014- 2013- 2014-
2013-14 2014-15
14 15 14 15
Nedumpurakkad
CVCS 552 180 180 0 400 490 23 6,431,596 9,266,475 2,834,879 44
Chenganda
CVCS 555 240 240 0 550 550 0 5,924,444 7,103,104 1,178,660 20
Poothotta
CVCS 825 65 61 (6) 122 148 21 856,590 585,918 (270,672) (32)
Kalathiveedu
CVCS 1108 300 305 2 305 425 39 2,469,783 3,821,343 1,351,560 55
Thirunalloor
CVCS 558 205 102 (50) 174 178 2 1,273,674 1,697,453 423,779 33

A comparative statement analysis of five major societies under Cherthala Project

Circle revealed the following results. Nedumpurakkad CVCS result shows that increase
in the wages paid to workers engaged in coir production was to the extent of 44 per
cent. The number of workers in this society engaged in the coir production was
comparatively high. For the current financial year, Kalathiveedu Society has provided
305 working days to 425 workers. Kalathi veedu society ranked top by generating
129625 labour days followed by Changanda CVCS No. 555 ranked second by generating
126000 labour days. In Alappuzha and Cherthala region, it is observed that more
number of employees are working and more working days are generated, compared to
other societies functioning in other circles.

Labour cost also got increased in the current year as compared to the previous
year (2013-14). The highest increase in wage payment (55%) is recorded in
Kalathiveedu CVCS as there is an increase of 39% in the number of workers. The
societies of Cherthala region reveal that these societies, on an average, provided 177
working days to 358 workers for the current financial year (2014-15).

From Chirayinkeezhu circle, data from a few cooperative societies were collected
and presented here.
 83

Edayar Coir Vyavasaya Cooperative Society,

Thiruvallom, Thiruvananthapuram

The society was initiated by a small group of 10 persons. Presently, the

number of members has increased to 986. According to the current voters list,
the number of live members is 618.

According to the wage register, there are 24 workers. On an average, a

worker gets 15 – 16 days work per month. The average daily wage actually
earned by a worker is Rs. 125 which means the monthly income is about Rs.
1875. Recently, the State government has introduced an Income Support
Scheme (ISS). Accordingly, it has stipulated a production target of 5 kg output
for a day for which the wage is Rs. 300. The society has to pay Rs. 190 directly
to the worker and the balance of Rs. 110 will be remitted to his personal bank
account by the Government. (Examine the daily wage register of the workers for
a full month and copy it – study the scheme also) Obviously, the wage is very
unattractive. During 2013 - 14 the workers were paid the bonus of 10.5%. The
practice is to enhance the bonus by 0.5% every year. Major decisions are taken
at the Welfare Fund Board office in Chirayinkeezhu.

Coir spinning is the major activity. Husks are obtained from regular
suppliers. The ratts are manually operated. The finished products are
transported to Coirfed in Alappuzha.

Members of the cooperative are enrolled in the welfare fund scheme of

the Dept. of Labour. The cooperative will remit Rs. 1860 as annual contribution
of each member in addition to Rs. 20 per month remitted by the member
himself.

The Society established a mechanized spinning unit (ICDP) on 30-6-2002

with loan obtained from a bank. Somehow or other it could not work in full
swing due to various functional difficulties. Presently, the machines are idle and
in a rusted condition and the work-shed also are in a dilapidated condition. The
administrative setup of the Society is at a loss as to what is to be done for
reviving the unit. The President and the Secretary could have solicited the help
of some expert and avoided the crisis.
 84

Meanwhile, under a revival scheme for sick cooperatives, the Society has
received, as a loan, Rs. 1,50,000 for installing a de-fibering unit. As usual, the
project did not materialize. The Society is seeking the permission of the
government to convert the amount into working capital. The Dept. of Coir is
against it, till date.

Due to chronic financial difficulties and lack of working capital, the unit
frequently becomes dysfunctional. The net result was the increasing dropout of
the workers.

Another impending problem is the fast aging ratts which demand frequent
repair work which is costly. According to the President, it is time for procuring
new ratts and discard the old ones. Otherwise, work will get disrupted. The
problem is to find money.

Yet another problem is the fast accumulating current bill. Presently

(2007-2008), the bill arrears is Rs. 30,621.

Perettil CVCS
Mungode
This is almost a dysfunctional unit at present. It was started in 1956.
The initiative came from Sri. S. Gopalan and Sri. Raghavan. There was no
difficulty in getting the unit registered. The number of share holders at present is
850. However, the number of active workers is only 20. The capital was raised
from shareholders at the rate of Rs. 10 per share. They get work for about 150
days per year. Daily wage at present is Rs. 300 – Rs. 195 from the Society and
Rs. 105 as grant by the State Government. The annual bonus is 15% of the
total earnings.

The unit has been in existence for the past 59 years. It stated functioning
with a few traditional ratt and that continues even today. No attempt has been
made to procure motorized/electronic ratts so far. It is obvious that manual
labour cannot lead the unit forward towards prosperity because the production
and productivity are bound to be very low. Current status of working capital is
about Rs. 1 lakh and the status of debt is Rs. 61 lakh. Due to shortage of money
to meet the day-to-day expenses, the unit remained closed during 2012-14.
Presently, it is working with 20 member workers.
 85

According to the President, “The State Govt. has spent crores of rupees
for promoting the coir sector. We have no idea as to how the money was spent
and who benefited. Several commissions have been appointed to study the
needs and problems of the coir industry in Kerala. The studies were of no use.
The Coir Development Department is also of no use. What is intended for labour
should reach them. At least 300 days of work per year should be guaranteed for
the workers.”

Needs and problems

1. The price offered by Coirfed has to be increased to cover the actual
cost of production, unit administrative expenses plus reasonable profit.
At present, the price is fixed unilaterally by a Committee constituted by
Coirfed.
2. There is acute shortage of coconut fiber. These are supplied by
private parties who are in the habit of increasing the prices every now
and then. Govt. has no control over them. In the beginning, the unit
used to procure husks and ret them in ponds nearby.
3. The Government has to make arrangements for the regular payment
of the monthly salary due to the employees of CVCS.
4. Government should set up modern ratts in CVCS to increase
production and profit.
5. Member-workers should be given pension and other social security
benefits also bonus and leave surrender facilities
6. Government should write-off the loan burden of Rs. 61 lakh plus
interests obtained from the District Cooperative Bank. It should also
provide enough working capital for reviving the unit. However, the
share holders numbering about 850 are not willing to invest money in
the unit.
7. Schemes have to be developed for protecting the health of the
workers.
8. Government should make arrangements for effectively marketing the
products.
9. The Coir Research institute is set up at Kudappanakunnu in
Trivandrum is yet to come out with new machines and tools
10.It is difficult to get a suitable Secretary for the unit, since the
managing trust is unable to pay the prescribed monthly salary of Rs.
3000. (Many other societies nearby also do not have secretaries for
the same reason.)

This unit has a machine to de-fiber retted husks. But now it is in

dysfunctional due to some technical faults. The unit at present doesn’t have
money to get it repaired. Retted husks are not readily available.
 86

Perunguzhi CVCS Ltd.

No. 3053
This spinning unit was started on 29 th May, 1950. The initiative came
from Messrs. Janardhanan, K.P. Kunjan, T.A. Shanmughadas, Madhavan,
Bhaskaran and Habeeb.

In the beginning the unit started production in the premises of a rented

building. Since there was no security, there were occasional theft of husks and
fiber. The shareholders met the then Minister for Industry Sri. T.V. Thomas who
provided Rs. 50,000 as additional capital. The total capital mobilized was Rs. 19,
63,047 (Rs. 5,62,690 contributed by shareholders and 14,00,357 by the State
Govt.) The premises of the present work-shed consist of 1.5 acres and there is
considerable income from coconut trees.

Presently, the unit has a saving of Rs. 2,34,777 (March 2015), but a debt
of Rs. 6,40,889. The accounts are maintained at the District Cooperative Bank.

At the beginning, there were 200 shareholders but at present, the number
is 1515. However, the number of workers is about 200. On an average, they
get 20 – 25 days of work per month. The daily wages is Rs.300 and get an
annual bonus of 15.5% of their total earnings during the accounting year.

Status of mechanization

In the beginning, there were a few traditional ratts. Presently, there are 3
automatic ratts, 9 electronic ratts, 33 traditional ratts, a husk-beating mill, 3 de-
fibering machines and a fiber-cleaning mill.

Marketing

The products are sold to Coirfed. Sometimes, there is delay in payment

by Coirfed which puts the unit in financial difficulties.
 87

Current financial position

Year Net profit/loss (in Rs.)

2005-06 - 19,558 Net profit

2006-07 - 55,011 Net profit
2007-08 - 5,04,274 Net loss
2008-09 - 2,83,427 Net loss (a pick-up was bought for the Sanghom)
2009-10 - 2,24,545 Net loss (PMI grant received)
2010-11 - 4,19,930 Net profit
2011-12 - 98,661 Net profit
2012-13 - 68,400 Net profit
2013-14 - 4,588 Net profit
2014-15 - 14,121 Net profit

How do they generate profits consistently? What are the factors which
contribute it?

Marketing

The products are sold through Coirfed. However, there are serious
problems. Payment by Coirfed is not prompt. In 2014-15, arrears of payment
reached 12 lakhs which compelled the unit to borrow money from District
Cooperative Bank and had to pay the interest. Occasionally, Coirfed is not
prompt in buying the products.

The most important lacuna is the prices fixed by Coirfed. It doesn’t take
into consideration the actual cost of production as well as the administrative
expenses of the unit. This is one of the prime reasons for the loss suffered by
the units.

Cost of production

1. Cost of 1200 husks (for 100 kg coir): Rs.2,400

2. Vattam chelavu: 300
3. Thondu thazhthu coolie: 300
4. Eduppu coolie: 300
5. Enna coolie: 100
6. Pola oorippu coolie: 700
7. Husk beating and fiber cleaning: 900
 88

8. Coir spinning: 6,300

9. Bundling: 350
10. Miscellaneous expenses: 200
11. Bonus at 15%: 1,775
-----------------
Total 13,625
12. Sale price of 100 kg coir + PMI: 9,735
(8850+885)
------------------
13. Net loss: 3,890
--------------

According to the President, cost of production could be reduced if modern

electronic ratts are used. Instead of three workers working in traditional units,
modern units need only two which brings down the cost. In this unit, many of
them are traditional ones. Besides, in Alappuzha district, presently the units
make use of dry husks whereas in this unit retted husks are used which
obviously increases the process cost. In Chirayinkeezhu - Anchuthengu areas,
enough dry husks are not available. One of the reasons is most of the coconut
trees are afflicted with katthuveezhcha.

Another reason for loss or low margin of profit is due to the manipulated
dynamics of the market. When the price of coir increases in the internal and
international market, traders correspondingly increase the price of husks thereby
reducing or neutralizing the profit due to the production unit. The traders get
the benefit. This in fact, is one of the ugly faces of neo-liberal capitalism.

Coir Inspector

Visits occasionally and examines the registers. To get the various benefits
offered by the State Govt., Inspectors’ recommendations are necessary.

Difficulties experienced by the unit

1. The unit is suffering from shortage of working capital at present

2. Frequent delay in getting the payment from Coirfed
3. Total production cost is higher than the selling price offered by Coirfed
4. The wage of Rs. 300 per day is very unattractive and hence, youngsters
are unwilling to take up work in the unit
5. Shortage of dry husks in the locality
6. Interest rate for loans availed of is very high – 14% (Govt. should
intervene and get the rate reduced to 4 or 5 %)
 89

Suggestions mooted by the President

The President and the Secretary have certain suggestions for overcoming
the difficulties:

1. The State Govt. should ensure adequate working capital at low interest
rate for CVCS
2. Govt. should make arrangements for collecting dry husks and supply them
to the units at moderate prices. This is required to protect the units
against exploitation by private traders.
3. Coirfed should be instructed to fix reasonable prices for the products
taking into consideration the actual cost of production, administrative
expenses, bonus and other fringe benefits paid to labourer including
Provident Fund, Gratuity (Get a list of benefits given to workers)
4. Coirfed should disburse the money due to the societies without undue
delay
5. The present minimum wages of Rs. 300 should be increased to Rs. 500
per day with government support
6. Total Mechanisation and modernization is necessary for higher
productivity and profitability. The efficiency and effectiveness of Coirfed
have to be enhanced considerably so that higher prices and more sales
could be guaranteed to the member CVCSs.

The investigators could visit the unit and observe its working. It has
sufficient infrastructural facilities including two work-sheds and a well-furnished
office. At the time of the visit, they found that half the production is mechanized
using electronic ratts and de-fibering machines. The rest is done by manual
labour. Out of the 20 traditional ratts, 12 were active in full swing. Major
records are being maintained and made available to the investigators for perusal.
In general, it can be stated that this is a stable unit, more or less efficiently
managed.
 90

Kovalam CVCS
Nedumam, Kovalam

The unit was registered in 1955 and became functional next year. It was
established in Kazhuvur thanks to the efforts of Sri. G. Vivekanandan, EX MLA. It
is dysfunctional for the past three years. At the beginning, there were 904
shareholders which has reduced to 546.

At the beginning there were 240 workers and at the time of informal work
stoppage, there were 85. They received Rs. 300 as wages. As bonus, those
who worked during 2012-13 (90 workers) got annual bonus of Rs. 750 from the
Labour Office.

Even though the unit is dysfunctional at present, the State Government

has given Rs. 54,110 during 2014-15. However, it has at present a debt burden
of Rs. 10,41,215 with penal interest due from 12-05-2006.

The unit doesn’t have enough working capital at present. For the past 7
years, there was no electricity due to huge arrears of payment. For namesake,
there is a Secretary is allowed to take Rs. 3000 per month from the incomes of
the unit but since there are no incomes, there is no payment also except twice or
thrice.

Kadakkavur South CVCS

Kadakkavur

The unit was registered on 29-12-1956 and it started production in March

1957. The initial step was to collect the coir spun by household units and sell
them at the markets in Alappuzha. In 1975, the unit was shifted to
Thekkumbhagam in Kadakkavur where the society was able to obtain a spacious
premise of 3 acre and 75 cents.

At present, there are 1115 shareholders. There were 50 traditional ratts

during the early years and a labour force of about 350 workers. Presently, there
are only 4 workers.
 91

The coir spun has a brand name namely, Vettoor Special Coir. In the
beginning, there was only manual labour operating the ratts. Gradually,
electronic ratts and automatic spinning machines were introduced and the
quantum of production increased very much. Presently, these machines are
dysfunctional due to lack of business. Incidentally, it was pointed out that the
workers in this area are in general, against machanisation. They like traditional
ratts to work with.

The unit had a capital of Rs. 21,47,120. It consisted of a grant from the
government – Rs. 4 Lakhs. Added to this is the income from the big 3 acre
premises which is full of coconut trees. However, the unit is in financial trouble
with an accumulated debt of Rs. 40 lakhs. Added to this is the arrears of
contribution to the welfare fund for coir workers and also compensation of Rs.
10,000 as per the Workmen’s Compensation Act. It is obvious that the unit is in
financial difficulties. The local Electricity Office has disconnected the supply.

Marketing was facilitated by Coirfed. However, the price fixed by them is

less than the actual production cost and payment also is delayed. Another
problem is the difficulty in procuring fiber and also the frequent increase in its
price. For instance, 6 months ago, fiber of 1000 husks cost about Rs. 3600 in
the private market. Presently, it has increased to Rs. 3900. Coirfed do not in
any way compensate the frequent increases in the price of fiber or husks.

The Secretary does not report for duty because the unit is not in a
position to pay his remuneration. According to the President, the difficulties
experienced in managing the unit are:

1. Shortage of husks/fiber
2. Low quality of the fiber supplied by private traders
3. Frequent increase in the price of husks/fiber which Coirfed does not
compensate
4. Difficulty in procuring (women) workers due to the MNREGS
5. Delay in the payment of price by Coirfed which upsets the working
capital
 92

Soft approach

According to the byelaws, there should be a Secretary with good

educational background but not a shareholder of the unit to manage the finance,
maintain the records and help the managing committee to run the busines
profitably. He or she is a paid employee who is expected to take care of the
technical aspects of office management. He/she is to be paid a monthly salary
of Rs. 3000 to begin with which is to be paid from the incomes generated by the
unit. Many of the units could not pay even this small salary and hence, function
without the Secretary. Hence, many units we visited could not produce records
for examination. Units which are inactive for several months suddenly mobilize
some working capital, buy husks/fiber, spin and produce coir products, sell them,
generate some income, become “live” and qualify themselves for “benefits” due
from the State Government. The Coir Inspectors, in general, take a soft attitude
towards such units. In this respect, the audit section of the Dept. of Cooperation
also is soft. Getting an audited report of accounts is also very easy.

Views of the President of Kandachira CVCS

In an interview with the President of Kandachira CVCS, Sri. Wilson

(belongs to the Kundara circle) shared his view that, “in the present scenario,
cooperative societies can be managed successfully. If a society is
running at a loss, it is due to managerial inefficiency. A veteran in the
field of coir manufacturing, having inherited expertise in this field, he supplies
raw material in large quantities to a good number of societies extending to
various circles. The raw material procured from Madurai is supplied to almost all
co-operative societies, materials on credit for a long term basis. In addition to
this, he has his own manufacturing unit (traditional).

All efforts on the part of Coirfed, Coir Board and government agencies to
mechanise this sector has resulted in wastage of public money and time, he
added. He suggested that a centralized system of manufacturing and marketing
is necessary to make this sector profitable. Almost all members of the
management committee and the President do not have technical knowhow,
managerial efficiency or even basic education, he observed. Majority among
these people lacks commitment, dedication, honesty and sincerity. Governments,
both central and state are ready to supply machineries free of cost, but do not
bother to supervise or monitor, thereafter. Machines costing crores of rupees are
 93

kept idle without being operated even for a week (eg: Kuzhiyam CVCS). Huge
revenue loss to the Exchequer is the only thing that happens. The government
agencies do not bother about the operational feasibility of the machineries
supplied to society. Majority of workers lacks training and technical knowhow to
operate the automatic or semi automatic machines. Societies having machineries
allotted by the government or Coir Board, are located at remote areas not having
even road accessibility and electricity connection. Nobody bothers about the
aftermath of the implementation, whether centrally sponsored or regionally.”

Mechanization

From observations and analysis, it is ascertained that use of motorized

ratt is a major cause for the higher amount of loss in ‘A’ class society. This is
because there is a marginal price difference of Rs. 5-10/kg of output between
the prices of the traditionally manufactured Kerala coir and mechanically
manufactured Tamil Nadu coir. The value of Kerala coir per kilogram is Rs.46
whereas Tamil Nadu coir is available in the market for Rs. 36-38 per kg. Besides
in manufacturing process, percentage of wastage of brown fiber is higher and
the quality of coir is inferior .The cost of production of coir from brown fiber is
also high in this method. For example, 26-28 kg of coir can be manufactured
from 30 kg of locally manufactured fiber through traditional method; whereas
20-22 kg of coir can be produced from brown fiber through motorized ratt. Yet,
retting husks in ponds, canals and lakes is to be discouraged since it pollutes the
water bodies and also affects the health of the workers.

For the process of defibering, mechanization is advisable as the cost of

production is less when compared to the traditional method. On the labour front,
the cost of production of the mechanized defibering unit is comparatively higher
in Kerala as the labour cost is also high. It is observed that the procurement cost
of husk alone costs Rs. 1500 per 1000 husks, out of which 70 kgs of brown fiber
can be produced. Alternatively, 70 kg of fiber bought from Tamil Nadu costs only
Rs. 600 to 700. Hence, it is advisable for the societies, on economic perspective,
to buy low-cost Tamil Nadu fiber to reduce the cost of production.

The CVCS have certain favourable factors for successful working like its
own infrastructure facilities, manufacturing activities at the convenience of
members, assistance from government in the form of grants and subsidies etc.
But these societies are faced with a number of constraints.
 94

3.7 The constraints

3.7.1 Working capital shortage
In spite of all governmental support like Revival Assistance, Working
Capital loan, lCDP loan and other subsidies, the CVCS are facing the problem of
working capital shortage. The lengthy production process and blocking up of
working capital are the reasons for this state of affairs. Once working capital is
invested, it has to be rolled on. But in CVCS, the problem is that after
procurement of green husks, it takes 7 to 9 months to get them retted. As
running concerns, they carry out yarn manufacturing activity using old stock. But
they have to pay wages and meet all other establishment and contingency
expenses. These constitute a major share of their cost of production. The
products are transferred to Coirfed but it takes its own time to pay back the sale
proceeds. Sometimes, it takes months. This results in working capital shortage
and that forces some CVCS to stop production. It is observed that around 90 %
of the societies we visited, are experiencing working capital shortage. Besides,
most of these units are heavily indebted to banks and hence, they refuse further
loans. This is a serious issue because, if left unattended, these units are bound
to die.

3.7.2 Higher price of raw material

At present, CVCS have to procure husk from the open market. Naturally,
they have to compete with other private manufacturing firms for purchasing it.
Husk passes through several intermediaries which obviously, adds the price.

3.7.3 Procurement of husk

Husks riped between January and March are of high quality and that yield
maximum fiber. Hence, the units have to purchase raw husk in the right season
from the right place and in required quantity. But, they fail to do so because of
shortage of working capital. This results in high raw material cost (Rs.1.50 per
piece) and interruptions in production.

3.7.4 Non- availability of workers

Though Kerala is endowed with abundance of man power, coir societies
are facing labour shortage. Survey results reveal that lack of certainty of regular
work in coir societies forces workers to go in search of work in private coir sector
or other sectors from where they get continuous work. The survey among coir
households also revealed this situation. The Secretaries of CVCS have often to
visit the households in neighbourhood in search of workers during busy periods
of production.
 95

3.7.5 Disparities

Several disparities were found even in the audited report. Disagreement in

figures was found in the annual performance report of the CVCS. The
explanations given by the Coir Inspectors were found to be not satisfactory.
Hence, periodic cross verification of the records as well as the actual functioning
of the units by higher officials is necessary in this regard.

The secretaries of the CVCS are responsible for the smooth functioning of
the societies. Coir Inspectors are there to supervise and monitor the units and
facilitate smooth functioning. They are the certifying officials in matters of
finance, accounting and administration.

The Secretaries have the authority to look after the day-to-day working of
the units. They are meagerly paid employees. Their remuneration varies from
Rs.3, 000 – 10,000 per month, depending upon their seniority. Due to financial
crisis, salary is not regularly disbursed. One of the Secretaries who, we met at
the Coirfed godown in Alappuzha complained that, “I have been working in this
unit for the past 37 years and my salary arrears at present amount to Rs. 5
lakh.”

In some societies, it is observed that the secretaries and the presidents

are only occasional visitors. In most societies, secretaries are ladies. They hold
on to the post only to get eligibility to be absorbed in the Co-operative
Department of the State Government as regular employees, based on service
quota weightage.

3.7.6 To become eligible

Majority of the societies are dysfunctional due to financial crisis and

working capital shortage. However, they eagerly look for the annual government
grants, subsidies and other financial assistance. To claim these, some CVCS
temporarily make arrangements to become active and start production for a
short period of one month or two. Prepare appropriate records, get the audited
statement of accounts and eligible certificates to claim the benefits.

3.7.7 Marketing
CVCS have to sell their products to Coirfed. They are not allowed to
market them through private parties. During the survey, it was observed that
some societies sell yarn to Mats and Mattings owned by private parties or to local
people for agricultural purpose. Some units make thick yarn, known as 'vadom'
to meet local demands. Ready cash, less technical formalties and higher price are
the reasons that encourage CVCS to follow this practice. This need not be
discouraged.
 96

Secretaries of CVCS regularly complain about the unscientific way of

measuring quality of yarn by the Coirfed. For quality check, Coirfed takes one
bundle of 15 kg coir from a load of 50 quintals of yarn and measures its runnage
(Meter per kg.). If Coirfed finds the quality as less than the standard, the entire
load of 5000 kg. will be under-priced. The moisture measuring equipment is not
used in checking quality. The employees of Coirfed randomly assess the quality
with a preconceived notion. To avoid further confrontation and delay, most of
the secretaries are forced to accept this procedure.

Another complaint against Coirfed is non-acceptance of produce. As a

result, godowns and offices of majority of the societies, are flooded with unsold
stock. Due to lack of storage facilities at their disposal, the societies are forced to
stop production and consequently, workers go to private manufacturers in search
of work at lower wages (Rs. 200 per day). Moreover, due to delay in sale, the
yarn gets dried, resulting in further weight-loss and that adds to the cost (of
production) since the workers were already paid on the basis of the original
weight.

3.8 Cooperativisation as a solution

As indicated earlier, the small coir production units were struggling to

survive due to lack of working capital, difficulty in procuring husk/fiber,
marketing difficulties and rampant exploitation of middlemen traders in selling
fiber and in buying the products. To resolve the problem, two committees were
constituted by the Central Government (1945) and the Travancore Government
(1949). These Committees recommended the re-organisation of the industry on
co-operative basis and a scheme was launched by the erstwhile Government of
Travancore in 1950 to cooperativise the industry. Which means, the experiment
of cooperativisation has been going on for the past 60 years with liberal financial
and administrative support from the governments. The net results are
disappointing.

The declared objectives of cooperativisation could be taken as the

parameters for assessing the performance of the societies.
 97

The scheme included various assistance such as:

1. Share capital assistance for formation of new societies and
revitalisation of dormant ones
2. Managerial subsidy
3. Assistance for purchase /modernisation/ renovation of equipment /
looms etc.
4. Marketing assistance for opening of sales outlets for sale of coir
products by apex coir co-operatives.

During the past 60 years, the State Government and later, the Central
Government have through various schemes (See the Appendix) spent a lot of
money to provide the assistances listed above through various supporting
institutions such as the Directorate of Coir Development, Coirfed, Coir
Corporation, Coir Board, Central Coir Research Institute (CCRI) (Alappuzha),
Central Institute of Coir Technology (CICT) (Bangalore) and the
National Coir Research & Management Institute (NCRMI),
Thiruvananthapuram.

The cooperativisation scheme is aimed at:

1. solving the problems of the actual workers and small producers
engaged in the industry
2. ensuring them regular work and a living wage
3. stabilising the industry on a sound and stable footing by cutting out
middlemen and to stop all corrupt practices; and
4. establishing improved standards and quality so as to attract and
ensure a better market for coir products.

It is obvious from what has been presented in this report (and in several
reports especially that of Dr. V.S. Jose (2002), Anathalavattom Anandan Coir
Commission (2008), KITCO study for Coir Board (2010), the strong efforts of the
two governments have not succeeded in realizing any of the declared objectives.

Of the 802 societies, (the new societies numbering 191 have not yet
started working; hence, they are not included), only 536 (2015) are working.
The rest namely, 266 units are dead after consuming all the subsidies and other
benefits showered on them. Among the live units (536), only 164 are generating
some profit. Which means, 372 societies are struggling to exist in spite of the
support of the State. In other words, only 164 units out of 802 are live at
present (20.44 per cent). The rest of the societies (80%) have either failed or
failing. The gravity of the problem of revival of the societies is obvious from this
analysis.
 98

Table No. 3.19

Current Status of Cooperative Societies

No. of No. of
Sl. Societies Societies
Cooperative Societies
No. as on as on
31.03.2014 31.03.2015
1 Working 503 536
i. Profit 154 164
ii. Loss 349 372
Total 503 536
2 New societies which have not 226 191
started working
3 Dormant societies 136 137
4 Societies under liquidation 105 129
Total 970 993
Source: Directorate of Coir Development

Another objective of cooperativisation is to provide living wage to the

workers so that their standard of living could be considerably improved. It still
remains as a distant target. The present wage is Rs. 300 per day out of which
Rs. 195 is contributed by the society and the balance of Rs. 105 by the
government. It is obvious that this is a recurring burden on the government
when we take into consideration that the total number of workers in the
cooperative sector is around 188067 (2015, Directorate of Coir Development).
About perks, mats and mattings units pay annual bonus (30%), PF, ESI and
leave with wages (5 days) Daily wage is Rs. 350. But, the coir vyavasaya
societies pay only 15-20% bonus. No other benefit since they do not have the
required paying capacity. In this context, the daily wage in the construction
sector is around Rs. 750-850 and that in the company coir factories ranges
between Rs. 750-1500. This is just to prove that cooperativisation has not
benefitted the workers. The present (subsistent) wage in the cooperative sector
is far from the target of living wage. The monthly wage gets further reduced
because, most of the units could provide work only for 15-20 days a month. In
other words, wages could be increased further only with another dose of the
income support scheme.
 99

Another objective of the scheme is to “cutout” the middlemen traders and

ensure higher income for the societies. This is yet to be achieved. Middlemen
along with the exporters still control the price of raw materials and finished
products. It is almost impossible to eliminate them.

However, 154 societies in 2014 and 164 in 2015 have earned profits in
spite of the impact of several negative factors (See the diagrams). It must be
understood that the government can only provide the seed money for starting
the enterprise and a few subsidies to overcome occasional financial difficulties.
Entrepreneurship and business perspectives, discipline and skills alone can save
the cooperative units and take them forward. The onus of turning a loss-making
enterprise into a profitable one squarely rests with the president who is the de
facto chief executive of the unit and its driving energy, ably supported by the
secretary and the Coir Inspector. The trio should be held responsible and
accountable.

…………………….
 100

Diagram No. 3.1

Internal Factors Adversely Impacting on Cooperative Societies

5. Share -
holders
refuse to
6. Un- provide 4. Manual
scientific finance labour
production increases
planning & production
control cost

7. President 3. Lack of
busy with working
extraneous capital &
activities indebtedness

Coir
8. Secretaries Cooperatives 2. Lack of
indifferent business
due to salary perspectives
arrears and skills

9. Attitude
of 1. Inefficient
dependency management
on of finance
government
10. Lack of
11. Inability
quality-
to utilise
consciousnes
machinery
s in product
 101

Diagram No. 3.2

External Factors Adversely Impacting on Cooperative Societies

5. Ineffective
implementation
6. Competi- of schemes of
tion from the govt. 4. Low quality
products of og brown
plastic, sisel & fiber
jute

7. Price fixed
3. Increase in
by Grievance
the price of
Committee
fiber
is irrational

2. Delay in
8. Depokars' Coir getting payment
exploitation Cooperatives from Coirfed,
Coir Corporation

9. Unsold 1. Non-
stock availability of
blocking workers when
capital required

10. Burden of 12. In-

effective
bonus, ESI, PF,
supervision by
leave with 11. Delay in Coir
wage getting Inspectors
subsidies from
govt.
 102

Chapter IV

Small-scale and Household units

A. Small-scale units

4.1 The genesis

The small-scale unit is the other category producing coir products. They
are generally owned by individuals. However, some of them have been brought
under the cooperative fold. According to Sri. M.P. Pavithran (President, Kerala
State Small-Scale Coir Manufacturers’ Federation, Alappuzha), there are about
10,000 units in Kerala at present.

After 1947, when India became Independent, the large coir units
concentrated in Alappuzha region were closed one by one by the foreign
company proprietors and left the coir field. Some of these units were purchased
by local business men but they could not revive the industry. The workers who
were thrown out of employment, mobilized capital and purchased the looms of
the closed units. With them, they established production units with 5 – 7 looms
in work sheds erected in their house premises.

Soon after this development, the local proprietors of the coir factories,
having experienced failure in reviving the big units, changed their strategy. They
converted themselves into exporters, procured orders from foreign and domestic
markets, placed orders to the recently set up small-units, got the products
manufactured according to their specifications and took to marketing. This they
continue even today.

In this process, there was a serious lacuna. The prices of the products
were determined by these big traders, not taking into consideration the actual
cost of production plus a reasonable profit margin/net income for the units.
Gradually, these units started incurring debts. This situation motivated the
proprietors of these small units to organize themselves into a strong association
and collectively bargained for fair price for their products. The powerful traders
did not relent. T.V. Thomas, the then Minister for Industries, sensing the
seriousness of the situation, intervened and through a Government Order, made
 103

arrangements to determine fair price for the products of small units and the
traders were compelled to accept it. The Coir Board was entrusted with the task
of periodically determining the sales-price of the products of the small-scale units
and also the minimum export price. Somehow or other, these arrangements did
not work effectively. Again, the association of small scale producers (The Kerala
State Small Scale Coir Manufacturers’ Federation) initiated a strong struggle to
get redressal of their grievance. As a result of this, the Coir Board was
empowered to introduce the Purchase Price (Enforcement) Scheme (PPES). That
ensured fair price for the products of the small units and minimum wages for the
workers. Obviously, peace prevailed in the sector.

However, the Government of India cancelled the minimum export price

scheme (MEP) in 2002 and as a result, the Purchase Price (Enforcement) Scheme
also got cancelled. That disturbed the peace and tranquility in the coir industry.

Meanwhile, with the support of some exporters, a set of middlemen

traders (popularly known as “depokar”) emerged who received orders from the
former and transferred them to the units for a price less than that fixed by the
Price Fixation Committee of the Coir Board. This underhand dealings started
thriving.

Realizing the crisis, the State Government entrusted the task of

implementing the PPES Scheme to the Coir Corporation. Also, brought the small-
scale units under the cooperative scheme. As per PPES, the orders obtained by
exporters from foreign markets should be passed on to the Coir Corporation
which in turn, pass them to the small units. The finished products will be
handed over to Coir Corporation which will pass them to the exporters. As an
incentive, the exporters will get a subsidy of 7.5% of the product price. Still, the
system does not function satisfactorily.

There are frequent fluctuations in the price of the products in the market.
In order to take this into consideration in fixing or altering the existing price, a
Grievance Committee is also functioning. The persistent problem is that the
price of raw materials is never stable. Most of the time, it goes on increasing,
thereby eroding the profit margin expected by the units, since the price fixed by
the Grievance Committee could be changed only at the next meeting. The net
result is frequent loss of income for the units. The question is what could be
done to help them?
 104

4.2 A few cases

The team visited a unit managed by Sri. V.M. Hariharan at Arattukuzhi in

Alappuzha. It is a coir weaving unit with ten workers. The Coir Board has
provided a grant under its Coir Cluster Scheme for putting up a convenient work
shed. There are eight looms for which government have given financial help (Rs.
2 lakh out of which 75% is subsidy). The minimum target of production for a
worker is a mat of 10 sq.ft. per shift. In practice, a few of them produce more.

The average rate of wage is Rs. 360 for 10 sq.ft. The average earnings of
these workers range between Rs. 1500 – 2000 per week. Leave with wages for
13 holidays is paid at the rate of 10.5% of wages earned. The wages and
annual bonus agreed at the Coir IRC are paid to the workers.

On an average, they work between 8.30 am – 5.30 pm. But the working
hours, in practice, is very flexible. Most of them work for 18 – 20 days per
month.

The unit gets work orders from exporters and produces items as per their
specifications. The prices are fixed by a committee constituted by the
government under the Purchase Price Stabilisation Scheme (PPSS). This is to
protect the small units against exploitation by the unscrupulous ones among the
exporters. In fact, a few of them enter into underhand dealings with small units
and fix a price less than that stipulated by PPSS. Losses in deals will be
compensated by financial help from PPSS and the Marketing Development
Assistance Scheme (MDAS). But, there is undue delay in disbursing the financial
assistance. Presently, the units have to get arrears (about Rs. 15 lakh) for the
past 3 years.

Since the wages stagnate around Rs. 350 per day, workers are not keen
on continuing in the unit. Daily wage for a construction worker outside is about
Rs. 700 – 800. Obviously, that is more attractive.

Due to scarcity and high cost of raw materials, power shortage, financial
crunch, low product cost and unwarranted or unreasonable rejection of the
products by the exporters, it is difficult to survive.
 105

Table No. 4.1

Proforma

Product Sector: Mats & Mattings & Small-scale Producer

Cooperatives
No. of Quantity/Value
No. of Wages
Working of Production
Year Workers paid (lakh)
Societies (lakh)

2010-11 64 3770 3333.68 346.77

2011-12 56 6031 3784.41 412.8

2012-13 72 6554 4545.23 455.27

2013-14 90 7147 8327.59 592.16

2014-15 68 6933 10019.59 765.41

Source: Coir Development Directorate, 2015

4.3 Current situation

1. According to Sri. Pavithran (President, Kerala State Small-scale Coir

Manufacturers’ Federation), the current status of the small-scale sector in
Kerala is not at all satisfactory. Partial mechanization of the handloom units
has resulted in loss of jobs for about 10,000 workers. About 90% of the
workers are in the small units and about 32,000 are engaged in related
activities. Exporters employ a good number of them in finishing work. Their
wages are low and often denied of DA, bonus, holiday wages, leave wages
and gratuity.
2. Another factor is that the exporters, in general, prefer and promote
machine-made products and so, give orders to such units - not to handloom
units. The same attitude reflects at exhibitions and publicity especially, at
international fairs.
3. Financially, a good number of units are weak and do not have even
adequate working capital. Payments due to them are often delayed by the
Government and Coirfed. While cooperative units get regular subsidies,
private units are denied of it.
 106

B. House hold units

The household units are engaged mostly in spinning, weaving and fiber
extraction work; of which spinning accounts for 75% of household employment.
Interestingly, three-fourths of all coir workers are women. The characteristics of
the household unit is that it is traditional, labour intensive and of a self-employed
production structure. It has become the main source of non-agricultural
employment in the region in the nineteenth and twentieth centuries. (Isaac et
al., 1992). The exact number of these micro units in Kerala is not available.

Household unit

The study team visited the Paravila Fishermen Colony in Vizhinjam

and initiated a discussion with one Sri. Sidhardhan who is 60 years old and fully
engaged in coir production in the traditional style as a household unit.

He procures fresh husks from local suppliers and rets them in a nearby
lagoon. After a year, he salvages them and get them fibered at a local mill.
After thrashing with long sticks, the fiber is dried and used for spinning.

He has only one manually operated ratt and it is used by three women –
two of them his neighbours. The coir produced is regularly collected by a local
trader. Formerly, the local cooperative society procured them.

Continuous work for about 7 – 8 hours will bring in a net income of Rs.
150 -200 per day per head.

There are several such household units in Paravila village. Men who are
healthy go for fishing. Women work with the ratt for 4 – 5 hours per day in
addition to household work.

This is a typical, traditional household unit in the sense that it is mostly

manual work, leisure time activity; they don’t write any accounts of incomes and
expenditures, no calculation of profit and loss, less understanding of the coir
market conditions and the exploitative role of middle men traders. No one to
educate them, provide information about the changing coir market situations,
train them in calculating profit and loss and the basic principles and strategies of
self-employment or entrepreneurship.
 107

It is obvious that:

 their earnings are very low

 being women, could work only 4 – 5 hours a day after the domestic
chores
 they lack capital to mechanise the ratt with an electric motor which
can increase production and productivity
 they do not get any financial support as grant or subsidy from the
State Government for doing business

Kavya Coir Works,

Chudukad, Mudippura, Near Pachallur

Sri. Madhu started it as a unit in 2014. Get the raw material - fiber from
suppliers in Kanyakumari District. The price of fiber there, is less than Rs. 2000
of the price to be paid here in Trivandrum for the same quantity. Since he has a
motorized spinning ratt, two workers can manage production. Muppiri coir – the
finished product is regularly procured by traders. Hence, there is no difficulty in
marketing and this enables them to have enough work throughout the year. On
an average, they work for 7 hours a day and get paid Rs. 250 each. In fact, the
two workers who handle the ratt are the husband and the wife. There is a work-
shed attached to their house.

Just like any other household unit, the couple also does not maintain any
accounts of incomes and expenditures. They are happy that together they get
Rs. 500 per day regularly.

Electricity Board charges them subsidized rate only – Rs. 450 for a period
of two months. The work-shed has a separate meter.

He intends to buy one more ratt fitted with motor. It costs about Rs. 2
lakh inclusive of all sundry expenses. He is seeking loan from some source,
preferably from a government agency.
 108

Spinning coir has been a traditional work and a source of income for his
family. Sri. Madhu was working for some years in the Gulf and with his earnings,
he was able to buy a plot and construct a small house. Being unemployed, he
took up the traditional occupation of his parents. He has a little bit of business
perspective and drive. No wonder, he intends to buy one more ratt and enlarge
the unit. Procuring fiber from Kanyakumari District enlarges his profit. Since he
doesn’t keep accounts, the correct figures regarding his monthly sales returns
and profit margins cannot be worked out. In other words, there is need for a
change from the present informal functioning of the unit to a formal and more
scientific style of management. This transformation is a must for making the
unit sustainable, more profit-yielding and growth-oriented.

The Directorate of Coir Development in the State does not have any
statistics regarding the number of household units in Kerala – their daily
earnings, quantum of production and its sale-value, their needs and problems.
Obviously, the government does not provide any support to these units. They
are left to fend for themselves and in one sense, they are a role model for CVCS
and the small-scale units. The household units also employ job-seekers in the
neighbourhood. On an average, the couple get an income of Rs. 500 per day
plus the profit gained out of sales.

They display good entrepreneurship perspectives, skills and self-discipline

which are traits necessary for profitable business. None of them complaints
about difficulties in managing the unit.

The household units need credit facilities for enlarging them with
motorized/electronic ratts so that they could increase their productivity, quantity
of production and net income. Self-employment endeavours need a well-
designed support system – not freebies. It would be good, if the Directorate of
Coir Development in collaboration with the Dept. of Statistics initiates a census of
household units in Kerala and acquire dependable facts and figures so that
appropriate support system could be developed.

…………………………...
 109

Chapter V

Observations and Recommendations

5.1 Introduction
On the basis of the facts and figures collected, the study team could
understand the basic needs and problems of the coir industry in Kerala,
consisting of different layers. The following observations and recommendations
are evolved for the consideration of the State Government. The appropriateness
and the administrative feasibility of these recommendations were discussed with
FICEA representatives, senior leaders of coir workers’ unions and officials of the
various supporting agencies.

5.2 Exporters as the driving force

The main driving force of the coir industry in Kerala is the exporters and
the managements of the large companies (Federation of Indian Coir Exporters’
Association) in the private sector who successfully explore opportunities in
foreign markets. They have the vision, perspectives and the business net work
on a global-scale which is very vibrant. In fact, the organized sector is the back-
bone of the coir industry in the State.

Besides, thanks to the strong efforts of the Coir Corporation, Foam

Mattings and Coirfed, export of coir products to world markets has increased to
Rs. 5 crore according to the Hon’ble. Minister Sri. Adoor Prakash. During 2010 -
11, the export sales value was Rs. 9,02,000. In 2014-15, it increased to
4,95,00,000. This is bound to increase due to the Coir Kerala International
Exhibition recently held in February (2016) in Alappuzha during. More than 170
business representatives from 55 countries participated.

5.3 Large units

According to the managements/proprietors of the large units especially in

Alappuzha and its suburban areas, they experience certain functional
constraints, unwittingly imposed by their workers/unions. Some of these are
discussed in chapter II. In spite of several requests by the managements to the
State government – especially the Minister in charge of Labour and Industrial
Relations of successive governments to look into the matter, no serious action
has been taken so far.
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The managements want to regain the right and the freedom to

mechanise and modernize their factories in order to optimize production and
productivity through appropriate technology. They aver that the export market
has its own norms, trends and time-lines. Without the spontaneous cooperation
of the workers and the unions, the requirements of marketing and the
requirements of the business in general, cannot be achieved optimally. The
State Government is requested to intervene in the matter and bring about stable
reconciliation in the matter of norms of work in respect of mechanization,
modernization, labour productivity etc. Perhaps, the Industrial Relations
Committee (IRC) for coir may take the initiative in the matter.

The current installed capacity of each factory has to be assessed and the
percentage of utilization at present could be easily worked out by a small team
consisting of representatives of senior union leaders, workers, FICEA, Dept. of
Labour and subject experts. The team could also assess the current productivity
status of labour and the overall cost of production per unit of each product.

Wages and perks have to be linked to their performance in terms of

standard outputs. It is desirable that negotiation for wage settlements based on
unscientific collective bargaining once in 3 – 5 years as a practice has to give
way to scientific facts and figures, business economics and the paying capacity of
the unit. Long-term agreement signed by a unit could be recognized by IRC.
Integration of the interests of management and labour through direct
negotiations sans threat of strikes and lockouts could be the guiding principle in
industrial relations.

The issue assumes greater significance because frustrated managements

are slowly shifting their business to Tamil Nadu where the industrial climate,
according to them, is hassle-free.

5.4 Coir cooperatives

5.4.1 Husk procurement

As indicated earlier, persistent failure in collecting raw husk from

households and copra traders and passing it on to the (420) live primary
societies for retting, defibering and spinning yarn. However, there is only one
husk procurement society which is running on loss at present. The gravity of the
situation is obvious. The failure in this activity is one of the reasons for the crisis
in the sector.
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5.4.2 Retting

Retting of husks in ponds, canals and lakes strongly pollutes these water
bodies and their environment. Hence, this practice has to be slowly given up in
spite of the fact that the quality of the fiber will be better and its length will be
sufficient for spinning and weaving. This is to protect the health of several
hundreds of women who take up beating and willowing of the retted husk as an
occupation. These women should be encouraged to take up spinning, using
motorized ratts. Quality of fiber directly from green husk could be increased
through appropriate machines. Coir industry has to be taken forward in an eco-
friendly manner.

5.4.2.1 Technological inventions in retting

The Central Coir Research Institute (Alappuzha) of the Coir Board has
developed a bacterial consortium known as ‘Coirret’. The use of Coirret can
reduce the retting period to 78 hours. Coir Board has not been able to extend
this technology to the different layers of the industry effectively due primarily to
the poor infrastructure of the units and other obstacles. Transferring such
technology is of great importance for the development of the industry and to
reduce the cost of production to compete with Global markets.

5.4.3 Defibering

Presently, this has lead to change in the extraction process but the lacuna
is that the staple length is shorter, leading to more shedding and poor quality of
the product. There is a need to develop a better process of fiber extraction that
will give better fiber quality and length for the spinning and product sector. The
attention of R&D institutions is invited.

5.4.3.1 Activating fiber extraction units

There are about 68 defibering units (DF Mill Societies) at present (2015)
in the cooperative sector. Out of this, only 22 are working (The number of profit
making unit is only 6). In the private sector also, there are dysfunctional units.
All these need to be revived and activated along with the proposed concerted
efforts of the Coir Directorate to collect husks and make the fiber available to the
manufacturing units. Ensure that the capacity utilization of the DF units is
increased to at least 80%. If required, more defibering units (decorticated
machines) should be set up so that more indigenous fiber could be made
available. It is understood that the Coir Directorate has already taken steps to
distribute, free of cost 100 and odd DF machines to CVCS.
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5.4.4 Middlemen traders

One of the objectives of cooperativisation is to eliminate middlemen

from the coir sector since they were/are very exploitative and deny the actual
workers what they deserve as enhanced wages and as shareholders of the unit.
Most of the CVCS do not have sufficient money on hand to purchase fiber
directly at lesser price from markets in Tamil Nadu. Hence, they have to depend
upon the private traders who charge higher price for fiber which they procure in
bulk from Tamil Nadu at lower price. Their strategy is to supply fiber to the
cash-starved CVCS on credit at a price they dictate and collect the loan when
Coirfed delivers the money due to CVCS. The traders do the same to the
household units also.

The alternative is to revive the existing de-fibering (DF) units or set up

new ones at strategic points or operate mobile DF units. One of the tasks of
these centers is to collect green husks regularly from the households in the
neighbourhood with the help of members of the local kudumbashree units and
other SHGs and also from local copra traders. The Coir Development Department
has already initiated steps in this manner.

5.4.5 Fair price

One of the reasons for the poor performance of the cooperative societies
is the unrealistic fixation of price for their products by Coirfed. The present
norms for fixing the price periodically should be critically examined. The profit
margin of the units has to be enlarged so that they will be able to increase the
wages a little and implement social security measures such as provident fund,
ESI and gratuity. In other words, in one sense, the sustainability and the
prosperity of the cooperative units largely depends upon the price offered by
Coirfed. Steps have to be taken to calibrate the functioning of Coirfed and the
Coir Board and enable them to increase the selling price of the products.
Government should provide adequate financial support. (AACC, 2008)

The coir society has to sell its products to Coirfed. They are not allowed to
market their products through private parties. During the survey, it was observed
that some of the societies market yarn to Mats and Mattings, owned by private
parties or to local people for agricultural purposes. Some CVCS manufacture
thick yarn, known as 'vadom' to meet local demands. Ready cash, less technical
formalities, higher price etc are the reasons that encourage the CVCS to follow
this practice. This need not be discouraged.
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5.4.6 Quality-consciousness
During field work for data collection, several presidents/workers of
cooperative units complained that some of the Coirfed officials are prejudiced in
their outlook and attitude and reject their products in the name of substandard
quality. This has compelled several household and cooperative units to prefer
private traders. Workers, presidents and secretaries of these production units
should be properly oriented on the importance of the quality of the products and
the prescribed quality standards for each product so that they become
marketable. Coirfed officials could take up the responsibility for training. Quality
ensures sustainability of the unit.
5.4.7 Mechanisation
From a business point of view, mechanization of the production process is
a must in a competitive world market. Workers and their unions are fully aware
of this and hence, they welcome it. The State and the Cental Governments have
already taken several steps to promote appropriate technology through various
schemes. But, due to improper implementation, the targeted degree of
mechanization has not taken place, unlike the situation in Tamil Nadu. Here in
Kerala also the large industrial units in Alappuzha and Cherthala are reasonably
mechanized and function efficiently with high quality products marketable in
foreign countries.
The problem persists mainly in the cooperative sector, small units owned
by individuals and in the household units. Mere distribution of soft loans/
subsidies/machines is not going to solve the problem. Distribution is not
implementation.
Anathalavattom Anandan Coir Commission had put forward several
suggestions which are very relevant. One is to set up Automatic Spinning Units
consisting of three spinning machines as given in the chart below:

Diagram No. 5.1

Automatic Spinning Unit

Automatic
Spinning
Machine (1)
(1 worker)

Automatic
Cleaning Machine Slivering Cutting Cum Bundling
Spinning
(Willowing) (1 worker) Machine Machine (Rehanging)
(2 workers) Machine (2)
(1 worker) (2 worker)

Automatic
Spinning
Machine (3)
(1 worker)
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Eight workers can operate the unit very efficiently and can produce coir
up to 120-180 runnage. During an eight-hour shift, one machine can spin up to
50–60 kg coir which means per shift the total output of coir will be between
150–180 kg. (The cost of a unit with three machines is approximately 3.5 lakhs in 2008)
According to AACC, such mechanized units in large numbers are necessary in
Kerala in order to compete with the mechanized coir units in Tamil Nadu. (For
details of the recommendation, see AACC report pages 89 – 92)

An adhoc committee consisting of experts from the three Coir Research

Institutes in South India should study the type of mechanization needed by the
coir units functioning in different layers – large organized units, mats and
mattings, cooperatives and household units. List of several new products such
as geo-textiles, coir ply etc is being presented, explained and recommended at
seminars and coir fairs. These products need appropriate machinery and the
infrastructure. The Committee could develop guidelines for further
mechanization in the coir sector, layer-wise.

5.4.7.1 Revamping the work culture

The success of any manufacturing industry primarily depends upon the

productivity of the inputs. The cost of production per unit has to be as low as
possible and obviously, there should be an increase in the quantity produced and
its quality. Manual labour with, out of date tools/machines cannot achieve this,
however sincere the worker is. Mechanisation of the production process and
modernization of the management process should go hand in hand.

One of the chronic lacunae of de-fibering units and the hand-spinning

units is their low production, output and productivity. The State Government has
been generous in providing capital for purchasing machines and other
accessories but, several coir cooperatives are found to be incompetent in making
the optimum use of them. Due to poor maintenance and lack of operational
skills, the machines have become a liability to several units and a few of them
have dumped them in a corner of the work-shed. The Coir Inspectors ought to
have ensured the right operation and care of the machines and optimize the
output and productivity. This is not happening. Wonder, whether the present
team of Inspectors have the right understanding of mechanization – its purpose
and the attitudinal changes required by the manually-oriented workers (a good
number of them are women) to operate the machines effectively. In other
words, work culture and work ethics have to be geared to suit mechanization
and modernization. The inspectors should serve as the king pin of the expected
changes.
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5.4.8 Different criteria for subsidy

Governmental subsidy and other assistance to CVCS are to be linked with

volume of production and days of employment generated and not on the basis of
sales to Coirfed. (V.S. Jose, 2002) The study team agrees with this stipulation.

5.4.9 Negative strategy

Interestingly, the increase in net loss of CVCS is due to the increase in the
cost of raw materials and in the operational cost. In the present scenario, with all
the administrative, financial and marketing support, CVCS finds it difficult to
successfully carry out its day to day operations. Hence, the (negative) strategy of
some societies is to cut short the number of working days, so that the net loss
could be minimized. A positive correlation is observed between the number of
working days and the quantum of loss. The loss increases with the increase
in the number of working days and obviously, decreases with the
decrease in the days of work. Hence, the quantum of loss could be reduced
through deliberate efforts on the part of the societies by reducing the number of
working days. For instance, the percentage of net loss to sales of Adinadu North
CVCS No. 488 of Karunagapally circle for the year 2014-15, was 18.33 per cent.
The number of days this society functioned was 29 and the aggregate loss
amounted to Rs. 20,273. The per day operating loss of this society was Rs. 700/-
It denotes that this society can reduce the operating loss by Rs. 700 per day by
making this unit non-functioning.

5.4.10 Electricity charges

In Kerala, electricity to small-scale industry units is under a Minimum

Guarantee Scheme. As per the scheme, the unit has to pay a minimum fixed
charge for a period of seven years. In case, the unit becomes dysfunctional
after a year or two, still the fixed charge has to be paid, up to the remaining
period of the seven-year contract. It is obvious that this is a big financial burden
for the unit since there is no income generation. It is recommended that the
Electricity Board should exempt such units from the stipulated payment.
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5.4.11 The burden of loan

Several failed or failing units have incurred huge debts payable to

cooperative banks, National Cooperative Development Corporation (NCDC) and
other sources. Obviously, due to persistent demands from these units, the State
Government converted the debts into shares in 2008 and relieved the debt-
burden of these units. Seven years have passed since then and the financial
position of the units is no better. Several units have debt accumulation to the
tune of 20 – 30 lakhs, even up to 90 lakhs and they look up to the government
to get them written off once again. The government has to examine the issue
seriously with discretion and take an appropriate decision whether these units
are to be liquidated forthwith (This is what the study team recommends) or
shoulder the huge financial burden of reviving them, once more.

5.4.12 Weeding failed units

The overall scenario of the cooperative coir sector is disappointing. A good

number of units is on the liquidation list for several years; several others are
struggling to exist mainly to avail themselves of the financial benefits offered by
the State Government and of course, there is a small number of profitable and
stable units. Quick weeding out of the failed units and the rapidly failing units is
necessary. A panel of experts should examine the surviving ones and suggest
appropriate measures for reviving them as recommended by Anathalavattom
Anandan Coir Commission (2008). Meanwhile, no more registration of new
cooperative societies.

5.4.13 Shareholders

A good number of units has 400 up to 800 and odd shareholders but the
actual number of workers is found to be only 20 or less in most of the units. At
times of financial crises, the shareholders are found to be unwilling to invest
money in the units. In fact, they are a burden to the unit since they outnumber
the live workers while taking important decisions. Hence, it is desirable to reduce
the number of shareholders to 25 plus and only those who are willing to work
when work is available and contribute to the business.
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5.4.14 Change of guard

Presidents, secretaries and members of the elected management

committee of cooperatives who had mismanaged the unit into incurring huge
losses and debts should be strictly prevented from assuming office hereafter
since they had proved their inefficiency in managing the unit and its
business.

5.4.15 Secretary of the society

The secretary, being a B.Com graduate, is expected to have basic

knowledge about the nature of (coir) business – its objectives, methods and
principles of management from a business point of view. In fact, he is conceived
as one of the two key executives of the enterprise and as such should be
made accountable. He should be given job-related training by experts and his
performance should be observed and assessed by the president and the Coir
Inspector.

The pay structure of the Secretary needs consideration. The practice is to

fix it as Rs. 3000 per month. Monetary incentives for better performance must
be introduced. There are very capable secretaries drawing more than Rs. 10,000
per month due to efficiency in managing the units.

5.4.16 Common Facility Centres (CFC)

Such centers enable the local units to avail themselves of modern

technical facilities for willowing, defibering, spinning, bleaching and dyeing,
weaving, packaging etc. at low cost. The centre could provide technical training
to the workers in handling such machines effectively. They can easily acquire
the skills and develop a liking for machines. This will also promote quality-
consciousness and standard quality outputs.

The facility centres should be established on the basis of logistical

understanding of the location of the units as a cluster so that their utility could
be optimized. With the help of experts from the Central Coir Research Institute
(Alappuzha), the Central Institute of Coir Technology (Bangalore) and the Coir
Board, a model CFC project appropriate for the small and household units may
be prepared for the consideration of GoK and GoI.
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5.4.17 Ensuring the principles of cooperation

The president and the members of the managing committee who wield all
the authority of the society should be adept in two functions: one is to efficiently
manage the business and generate surplus income consistently and provide at
least 200 – 250 days of work in a year with reasonable wages and perks. The
other is the effective management of the society according to its declared
objectives (in the byelaws), principles and practices of the concept of
cooperation. For this, the active shareholders/worker members should be
given training in the theoretical base of cooperative societies. The president
should ensure that his society is strictly guided by the norms of cooperation.

This suggestion is mooted because it is found that many of the societies

are cooperatives only in name and not in structure and style of functioning.
Even the structure is changing by the frequent increase in the percentage of
shares owned by the government by converting under pressure, the increasing
debts of the societies into shares – a strategy adopted by the government to
salvage sick industrial units.

5.4.18 List of deficiencies

Coirfed Chief Administrator Shri. K M Raju who delivered a talk on the

subject at the national seminar on “Possibilities for Coir Co-operative Sector” at
Coir Kerala 2014 in Alappuzha said that “low wages, shortage of experts, slow
decision-making and lack of accountability are problems faced by coir
cooperative societies that need immediate addressing. He said when compared
to the private sector, coir cooperatives offer paltry salaries that are not enough
to attract experts who can advise on good marketing strategies and
interventions. The study team fully endorses the deficiencies listed here.

5.5 Mats and mattings units

These are small-scale units owned by private individuals engaged in

spinning and weaving (Mats and Mattings) are kept out of the State Directorate
of Coir Development. The result is they don’t get adequate support from the
State Government, out of the funds earmarked for the protection and
development of the industry. These units should also be brought within the
schemes of the Directorate in addition to what Coir Board offers.
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The small units need the special attention of the Committee under the
Purchase Price (Enforcement) Scheme (PPES) and the Grievance Committee.
The criteria for fixing the purchase price needs to be revamped in consultation
with the representatives of the unions, exporters, Coir Commission, Coirfed, Coir
Development Department. All the statutory payments related to minimum wage,
DA, PF, ESI, bonus, leave with wages, gratuity etc should be taken into
consideration while fixing the purchase price. The apprehension of the unions is
that the large-scale exporters can manipulate the price through their agents
located in foreign countries. The Grievance Committee generally determines the
wages of the workers based on the export price. By understating the price, the
exporters can influence the Grievance Committee to fix the wages at a reduced
rate.

These units need mechanization and modernization for which the Central
Government through Coir Board have come out with a scheme under the XII th
Five Year Plan “for rejuvenation, modernization and technology up-gradation of
coir industry” (Coir Udyami Yojana). Proprietors of the units should avidly seize
the offer.

The products of this sub-sector – mats and mattings, need more publicity
through the media and other means so that demand for them in the market
could be increased. Exporters, Coir Development Department, Coirfed and the
Coir Commission should take responsibility for this sales campaign.

The recent policy decision on the part of the Central Government to close
Coir Board’s showrooms and outlets used to market mats and mattings as
seriously affected their sales. It is learnt that the reason for the closure is that
there was some sort of manipulation and mismanagement on the part of some of
the officials. Alternate strategies for marketing the products have to be put in
place without any delay.

Furthermore, the mats and mattings societies face production difficulties

due to shortage of raw material. They require Vaikom special and Alappadan
special varieties of coir with specified runnage as raw material. Neither Coirfed
nor primary coir societies manufacture and supply these varieties. Hence, the
unions have suggested that the State Government should set up a raw material
bank to ensure timely supply.
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Another difficulty experienced is the delay on the part of Coir Corporation

to make timely payment. At present, it takes 30 days. This time lag is
somewhat manageable to the societies. But, the real problem is of unsold stock.
Coir Corporation, at present, is not in a position to procure more products or
make payments for the products already purchase due to lack of fund. Hence,
many of the Mats and Mattings are over-burdened with unsold stock resulting in
delayed payment of wages to workers. The Small-scale Manufacturers’
Association demands that this situation can be resolved by advancing sufficient
funds by the Government to Coir Corporation.

5.5.1 The “Depokar”

This has become a perennial issue. The price of the product is largely
determined by the exporters and the big companies. They control the export
market and the tendency noticed is to bring down the purchase price as low as
possible so that their profit maximizes. Since the intervention of the State
Government in determining the price through PPSS/PPES, a host of
intermediaries (a few of them are only agents) have entered the scene and
break the direct link and business between the exporters and the small-scale
producers numbering about 10,000. The “Depokars” are the brokers and do
their best to pull down the prescribed price. The suggestion is to eliminate
these intermediaries and ensure fair price for the small producers. Government
has to compel the Exporters’ Association to have direct dealings with the small
producers and ensure the price determined from time to time.

5.6 Household units

They need credit facilities for enlarging their units with

motorized/electronic ratts and other suitable gadgets so that they could increase
their productivity, quantity of quantity of output and net income. Self-
employment endeavours need a well-designed support system – not freebies. It
would be good, if the Directorate of Coir Development, in collaboration with the
Dept. of Statistics, initiates a census of household units in Kerala and acquire
dependable facts and figures so that appropriate support system could be
developed.

These units are expected to register themselves with the Coir Board so
that it can offer support through various schemes. But, unfortunately, most of
the units in the State have not yet registered.
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Since most of the units do not keep accounts, the correct figures
regarding monthly sales returns and profit margins cannot be worked out. In
other words, there is need for a change from the present informal functioning of
the unit to a formal and more professional style of management. This
transformation is a must for making the unit sustainable, competitive and
growth-oriented. They are perennial victims of middlemen traders who charge
more for the fiber and pay less for the coir. The cooperatives nearby are unable
to help them by purchasing the coir due to shortage of working capital.
It will be good, if a member of such household units is given training in
the basics of modern business management mainly financial management,
accounting and auditing, production planning and control, quality management,
marketing strategies and leadership skills appropriate to micro-units.

According to an owner of a household unit, the cluster approach will

strengthen the individual units. Develop a group of ten or fifteen household
units in a locality with strong leadership so that bulk buying of raw materials,
bulk sales through bargaining and adhere to the economics of a typical cluster.
At the same time, the individuality of the units could be retained.

Most of the production work is being done by women. Since they are
members of Kudumbashree and/or SHGs sponsored by voluntary agencies, they
could easily raise the capital required for developing the business of their family
unit. If finance is properly managed with discipline, there will be enough savings
for mechanizing the unit and increasing its output.

5.7 Project administration

It is found that the State Government through the Directorate of Coir

Development has introduced a good number of schemes for strengthening the
cooperative units and others for the past several decades. (See Appendix) The
Government has liberally funded the projects. But, due to various reasons, the
expected results and benefits have not been achieved so far. Out of 849 and
odd registered coir cooperative societies, about 313 units have become totally
dysfunctional. Among the rest, several of them are struggling to exist. Only a
few continue to be financially stable and work without any hassles, providing
regular employment to their workers. In other words, some successful units co-
exist side by side with a large number of failed and failing units. Our effort was
to find out the positive factors which contribute to the success of some units and
the negative factors responsible for the failure of several other units which are
responsible for the image of sickness in the sector.
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It is obvious that the project administration needs to be calibrated.

Presently, the monitoring and review practices are ineffective. The basic
approach in respect of business units has to be more preventive than remedial.
There are units which have incurred cumulative losses up to 50-90 lakhs within a
period of two or three decades. Officials in charge of executing the project at
the grassroots level need to be a little more demanding and assertive during
supervision. Auditing of accounts needs a little more verification with the
functional realities of the unit. What is presently required is a thorough
revamping of the present monitoring and review process of the performance of
the project and their constituent units. Feedback of the findings of the reviews
should be regularly communicated to the officers concerned and to the societies
and strongly insist on initiating immediate remedial measures and report their
impact.

Parameters of business management appropriate to assess the

performance of coir cooperatives have to be worked out and strictly followed so
that protective measures could be initiated in time, in respect of struggling units.
The study team feels that the Coir Inspectors ought to have been a little more
alert and focused on the performance of each unit, recognize the early signs of
sickness and diagnose the causative factors and compel the President and the
Secretary of the unit to initiate corrective measures then and there. Likewise, the
annual audit report of accounts should contain critical comments about the
financial management of the unit and give timely warning. The President and the
Secretary should not hesitate to consult experts in coir business to overcome the
crises. Ultimately, the success of the coir sector to a large extent depends upon
the drive and missionary zeal of the officials of the Dept. of Coir Development.

5.8 Competition from neighbouring states

This is true. Tamil Nadu is the main competitor. Plantation type of

coconut cultivation enables the collection of green husks very easy, unlike the
situation in Kerala. Salem, Erode, Polllachi and Kanyakumari districts are noted
for high profile cultivation of coconut trees of high-yielding varieties. Abundant
supply of water is available and hence, production of nuts is very high.
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Another advantage of Tamil Nadu (TN) and other states such as

Karnataka and Andhra Pradesh is the fast pace of mechanization at every stage
of the production process without any hassles. This has increased the quantum
of output and reduced the cost of production. Coir fiber could be sold at a price
less than that produced through retting and beating. In fact, 70 – 75% of the
fiber required by Kerala is brought from TN. Likewise, in spinning also, TN has
achieved tremendous success. Automatic spinning units are abundant in Salem,
Pollachi, Siva ganga, Tanjavur, Kanyakumari, Puthukottai, Velloor, Kadaloor,
Erode, Kambam, Theni and Thenkasi (AACC, 2008)

Added to this, there is the advantage (from a business point of view) of

comparatively low wages prevalent in TN and the absence of frequent strikes
and hartals. Thanks to the strong support given by the Govt. of TN, the Cluster
Production Scheme functions successfully in many coir production areas. The
message is clear: Kerala has to initiate appropriate steps, with a sense of
urgency, to encounter this competition.

5.9 Pith

Experts say that it can be used as organic manure, if it is bio-degraded

through well-established process, already available. Pith produced in dry form
from the mechanized de-fibering operation has the potential to be used as fuel
briquette (KITCO). TN has already taken the lead in this activity.

5.10 Union as the catalyst

It is well-known that the coir industry in Kerala is under the strong grip of
powerful trade unions and their leadership. It is obvious that the coir sector is
not performing satisfactorily. Even the large coir factories complain of restrictive
practices unwittingly indulged in by a section of workers which prevent the units
from attaining optimum utilization of the installed capacity of the machines.
Since the union leadership has control over the primary personnel in the coir
industry, it is felt that the leadership should take the initiative to play the role of
a strong catalyst in putting the industry on the right track in collaboration with
the efforts of the State and the Central Governments. Merely, pumping in more
money and other benefits through various schemes into the sector will not
succeed.
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5.11 Strategic alliance for marketing

The coir manufacturing and exporting countries should come together and
form strategic alliances to meet global challenges and for creating awareness of
the biodegradability, eco-friendliness etc. of coir products among the purchasing
nations. To promote this, periodic consultative meetings of these countries could
be organized just like the Organisation of the Petroleum Exporting Countries
(OPEC). Kerala could take the initial steps with the collaboration of the Central
Government. In fact, the recently concluded Coir Kerala fair 2016 at Alappuzha
is a step in this direction. From being a fair, to becoming a powerful
international organization of coir producing countries for mutual benefit is the
next step.

5.12 Patent rights and brand name

It is understood that steps are being taken by the National Coir Research
and Management Institute (NCRMI) to secure patent rights for the coir
products and give them a trade mark namely, “Kerala Coir”. Also,
arrangements are being made for setting up a competent agency to ensure the
quality of the products especially for those intended for the internal market. In
the case of products for international market, already there are arrangements for
quality assessment and control. It is hoped that these steps will enhance the
sale of products in the domestic market.

5.13 Towards on-line business

It is reported in local newspapers that the Coir Board as per a policy

directive from GoI that steps are under consideration to promote on-line
marketing of its coir business and gradually wind-up by 2016, its showrooms and
franchisee arrangements all over India. Alternative arrangements for sales have
to be made with a sense of urgency so that stocks may not accumulate and
block working capital in the production units.

5.14 The workers

Workers are obviously expected to be, the prime beneficiaries in the coir
sector. Those who are employed in large and medium factories get fair wages,
perks and social security benefits as per law. Even, contract labour is given
more or less the same wages without perks.
 125

The question is what could be done to uplift the workers in the

cooperative sector, small-scale sector and the household units. Thanks to the
generous contributions of the State Government, the daily wage is maintained at
Rs. 300 per day but without any perks and pension, largely because of persistent
financial loss of many of the units. Which means, industrial sickness in these
layers need to be addressed on the basis of a comprehensive relief and revival
plan based on the norms of modern business management and not liberal
distribution of freebies. The onerous responsibility of developing the business
vests with the president and the secretary of the units and they should feel
accountable to their workers and their welfare. The fact that there are successful
units with financial stability and consistent net incomes even in the existing
business situation in Kerala indicates that success in business is possible. These
units could serve as role models.

5.15 Conclusion

The overall scenario of the coir industry in Kerala is that, except the large
units in and around Alappuzha and Cherthala, others such as coir cooperatives,
small-scale units and household units are struggling to exist with problems such
as non-management or mismanagement of the enterprise without proper
business perspectives, skills and discipline. These units have no control over the
prices of raw materials and the prices of finished products. Prices are controlled
by powerful private traders and exporters even though there are the Price
Purchase Stabilisation Scheme, the Price Purchase Enforcement Scheme and the
Grievance Committee. Lack of arrangement for systematic collection of good
quality husks and make them available in time to the production units has
become a perennial problem. Fiber is brought from Tamil Nadu and sold at
prices not affordable to the production units in Kerala which chronically suffer
from shortage of working capital.

TN has overtaken Kerala in the matter of mechanization and

modernization and poses as a strong competitor to our coir industry. Stiff
competition from plastic/rubber products is another threat. Frequent vagaries in
the demand for coir products in the international market is also a destabilizing
factor.
 126

It must be admitted that the State and the Central Governments had/have
been supporting the coir industry through a good number of schemes. In sum, it
can be stated that the stability and prosperity of the industry solely depend upon
two determining factors – one is to keep the price of raw materials such as husk
and the fiber, as low as possible and the other is to maintain a reasonable
purchase price for the finished products so that the incomes generated through
sales would be sufficient to meet the production cost as well as the
administrative cost including reasonable wages, bonus, provident fund, medical
insurance premium and gratuity. The study team feels and strongly
recommends that the two key players in the coir sector namely, the Federation
of Indian Coir Exporters’ Associations and the intermediate private traders alone
can stabilize the price of raw materials and the purchase price at a level that can
sustain the coir industry as a desirable business in Kerala and sustain the
livelihood of about 4 lakhs of families.

Meanwhile, the administration of the various supporting agencies has to

be calibrated and focused so that they effectively serve as a protector and a
driving force to the industry.

In general, the CVCS, do not function efficiently according to the basic

principles and norms of cooperation nor do they function as a self-employment
unit with the required business perspectives and drive. The State Government
has done a “mistake” by becoming a shareholder of the societies. This has
prompted the workers, the elected members of the managing committee and the
member workers to develop a sense of dependency on the Government. The
general expectation is that the State Govt. should be a more liberal share holder
with a paternal outlook and should absorb all the losses and debts incurred by
the units and pump in more money to keep them alive. One of the frequent
demands of the failing/struggling units is that the Government should instruct
the District Cooperative Banks and other financing agencies to write off their
debts and salvage them with additional capital. As indicated earlier, this
“dependency syndrome” has to be discouraged forthwith and insist on
developing “business syndrome” so that the CVCS becomes an “independent”
income-generating unit.
 127

Appendix - A

References

1. Anant Kamath, Entrepreneurship and innovation in new and traditional

sectors in developing countries Technological Modernisation in the Coir Fiber
Industry: Prescribing Innovation to a Traditional Low-Tech Sector in Kerala,
India, 22nd November 2009Paper for the DIME RAL2 WP Conference on
Industrial Dynamics and Sectoral Systems, in Milan Theme

2. Anathalavattom Anandan Coir Commission, 2008, Government of Kerala

3. Issac Thomas, T.M (1984) : "Class Struggle and Industrial Structure - A Study
of Coir Weaving Industry in Kerala-1859-1980,"

4. KITCO Consultants for Coir Board, Survey on Status of Coir Industry in

Kerala, 2010

5. Shri.Christy Fernandez, IAS ,Former Chairman, Coir Board, Proceedings of the

Int.Coconut Summit 2003,Kochi

6. TP. Bijumon, Role of Kerala State Co-operative Consumers’ Federation

Limited in Retailing, Ph.D. Thesis (October 2013), Dept. of Commerce, St.
Albert’s College, Ernakulam

7. V. S. Jose, A Study of Coir Vyavasaya Co-Operative Societies in Kerala:

Performance, Problems and Prospects, 2002, Thesis Submitted to the Cochin
University of Science and Technology for the Award of the Degree of Doctor
of Philosophy in Commerce
(See also the list of schemes of GoK and GoI (Appendix G) for the rejuvenation of the
coir industry.)
 128

Appendix - B

Bibliography

8. Annual Report of Coir Board 2012-2013, Coir Board, Ministry of Micro, Small and
Medium Enterprises

9. A Study of Coir Vyavasaya Co-Operative Societies in Kerala: Performance,

Problems and Prospects, Thesis Submitted to the Cochin University of Science and
Technology for the Award of the Degree of Doctor of Philosophy in Commerce by
V. S. Jose in 2002

10. Balakrishanan, P.K, “Evolution and Working of Coir Industry in Kerala”, Coir Board,
Kochi, 2005

11. Bhaskaran Unnithan, K; "Coir Industry in India with Special Reference to Marketing
and Trade", Coir Board, Kochi, 1970

12. Coir Board, “India's Production Exports and Internal Consumption”, Coir House,
Kochi, 1979

13. Dr. Navneeta Singh Reader, Department of Commerce Netaji Subhash Chandra
Bose Government Girls P.G. College, Lucknow, Annals of Management Research,
Volume 1, Number2, November - December 2011

14. Issac Thomas, T.M, "Class Struggle and Industrial Structure - A Study of Coir
Weaving Industry in Kerala-1959-1980," (1984)

15. Thomas Issac, T.M. Van Stuijverberg, P.A; and Nair, K.N, "Modernisation and
Employment: The Coir Industry in Kerala", 1992, Sage Publications, New Delhi

16. Jarman, C.G., and Robbinson, S.R.J., An Industrial Profile of Coconut Fibre
Extraction and Processing. London: Tropical Development and Research Institute,
(1986)

17. MSME Annual Report 2014-2015, Ministry of Micro, Small and Medium Enterprises
Medium Enterprises
 129

18. Paper for the DIME RAL2 WP 2.6 Conference on Industrial Dynamics and Sectoral
Systems, in Milan Theme: Entrepreneurship and innovation in new and traditional
sectors in developing countries Technological Modernisation in the Coir Fiber
Industry: Prescribing Innovation to a Traditional Low-Tech Sector in Kerala, India
Anant Kamath1 22nd November 2009

19. Pylee, M.V., A Study of Coir Industry in India-Problems and Prospects. Cochin: Coir
Board, (1975)

20. Shri.Christy Fernandez, IAS ,Former Chairman, Coir Board, Proceedings of the
Int.Coconut Summit 2003,Kochi

21. Survey on Status of Coir Industry In Kerala, 2010, KITCO Consultants

Journals

1. Ajith Kumar, P. “Coir Industry in India – Problems and Prospects”, Coir News, Vol.
XXXI, No.7, Oct 11-13, 2002

2. Bagavathi Muthu, R. “Performance of Tamil Nadu Manufacturing Sector”, Indian

Economic Panorama, January 2007.

3. Eapen, K.C; "The Fascinating Story of Indian Coir", Souvenir, Coir Board, Kochi,
2001

4. Eopen, K.C; "The Fascinating Story of Indian Coir", Coir News, Vol. XXIX, No.10,
Oct 2001.

5. Eresi, K, “Personnel Practices in Small-Scale Industries of Bangalore City – A

Survey”, SEDME, Vol.28, No.2, 2001. 269

6. Esthappanu, P.D. “Coir Geo-textiles”, Coir News, Vol. XXXII, No.2, February 20,
2003.

7. Gangi Reddy, Y, Growth Performance of Village and Small Industries, Journal of

Rural Development, Vol. 8, No. 4, 2005.
 130

8. Gouri Amma, K. R, “Modernisation of Coir Industry”, Journal of Kerala Calling, Vol.

XV, No.3, April 2005. Henry Lousis, I, “Coconut-The Wonder Palm”, Coconut
Corporation, Nager coil, Tamil Nadu, May 2002

9. Kumarasamy Pillai M. “Towards Self-Reliance in Coir Fibre Production”, Coir News,

Vol. XXXIV, No. 6, June 2005. Laxmidas, “Marketing–A Challenge”, Jagriti, Vol.47,
No.3, September 2003. Maheswari P.C. Rathina and Edwin Gnanadhs, “Marketing
Strategies for Coconut”, Indian Journal of Marketing, Vol. XXXIII, No.3, March
2003.

10. Pandi S.J., “Problems and Challenges of Industrial Co-operatives with Special
Reference to Coir Co-operative Units in Tamil Nadu”, Indian Co-operative Review,
Vol.42, No. 3, January 2005.

Appendix – C1
PROBLEMS AND PROSPECTS OF COIR INDUSTRY
Interview Schedule I

For Co-operative Coir/Matting Society

Name of Society :

Location :

Permanent address :

Correspondence address :

Contact person :

E-mail :

Designation :

Ph no. Mob: Fax:

1. Please indicate the type of co-operative society.

Sl .no Type of unit Put a
tick
mark
1. Central co-operative society
2. Parimary Co-operative society
3. Apex co-operative society
4 State owned coir development agency
5 If any other-specify
 131

2. Please state the academic Qualifications of Secretary and Adminstrators

Secretary (a)…………………………. Administrators (a)………………………
(b)………………………….. (b)………………………
(c)………………………….. (c)………………………

3. Please state the scale of pay followed by coir/mat Co-operative society?

4. Is there any relationship between President and Secretary?

Yes No

5. If yes, what type of relationship is followed in the society?

6. Please state the duration of elected President in the society.

7. What are the procedures followed for appointing Secretary and other staff in the society?

a……………………………………
b……………………………………
c……………………………………

8. Please state the status of the society/coir business

Successful Failure

9. If failure, what are the causes for the failure?

…………………………………………………………
………………………………………………………….
…………………………………………………………

10. Is this unit in operation? Yes No

11. The total no. of members in the unit.

12. Fixed asset owned by the unit

Item Owned Leased

Area(cents) Value Rs. Area cents Annual rent
Rs.
1 2 3 4 5
a. Land
b.Building
c.Plant and machinery
d.Retting units
Capacity
 132

13. Please state the details of unused machinery in the society.

a……………………………………
b……………………………………
c……………………………………
14. What are the reasons for unused machinery stocked in the society?
a……………………………………
b……………………………………
c……………………………………

15. Is there any fluctuation in the cost of husk/fibre used for coir manufacture/process?
Yes No

16. Please state the purchasing pattern of coir/fibre into the society.
From Pollachi From Local market
Own production From other places

17. Source of finance

Source of finance Amount in rupees

a. Own finance
b.Bank/financial institutions/ N.C.D.C
c.Government loan
d.Government subsidy
e.Financial assistance from coir board
f.Others (specify)
18. Do the society have any financial problem?
Yes No
19. Is there any special scheme of Governmental assistance available to the society during
the last year?
Yes No
20. If yes, mention the details…
a.
b.
Name of Schemes
c.
d.
a.
b.
Year introduced
c.
d.
a.
Which Agency b.
c.
 133

d.
a.
b.
Purpose
c.
d.
a.
b.
Amount
c.
d.

21. Is there any indebtedness to the society?

Yes No

22. If yes, Please state the details of your present indebtedness.

a………………………………………..

b……………………………………….

c……………………………………….
23. Raw material

Stock position Raw husk Retted husk Fibre Coir yarn Mats/matting Others(specify)
s
Qty Value Qty Valu Qty Valu Qty Value Qty Value Qty Value
e e
Ton Rs Ton Rs Ton Rs Ton Rs Ton Rs Ton Rs
1 2 3 4 5 6 7 8 9 10 11 12 13
a.Begining of
the year
b.End of the
year
c.Purchased/pro
duced during the
year

1.Source code
2.Transport
charges incurred

Code-Own Produce-1, Purchased from Private Dealers-2, purchased from co-operative society-3,

Others (specify)-4

24. Production and sales during the year

 134

Item Production Sold to coirfed Sold to others Transportation cost

Qty Value Qty Value Qty Value Qty Value

1 2 3 4 5 6 7 8 9
a.Retted husk
b.Coir fibre
c.Coir yarn variety
and runnage
1.
2.
3.
d.Coir rope
e.Fibre mats
f.Coir mats
g.Coir mattings
h.Coir geo textiles
i.Coir pith
j.Curled coir
k.Rubberised coir –
goods
l.Others(specify)

25. Types of activity (put tick mark)

Purchase of raw husk Rett spinning
Purchase of retted husk Machine spinning
Mechanical extraction of fibre Sheering
Beating husk Stenciling
Purchase of fibre Rubber backing
Fibre cleaning Latex backing
Turbo cleaning Dyeing
Hand spinning Bailing press
Manufacturing of mates and mattings Rope making
Others (specify)

26. Equipment used

Item No Owned Rented no. Annual rent Remarks

. Purchase Year of Rs.
value purchase
1 2 3 4 5 6 7
a.Defibring
1.Combing plant
2.Decorating plant
b.Fibre cleaning machine
c.Ratt
1.Two spindle
2.Three splint
3.Four splint
4.Six splint
 135

d.Spinning machine
e.Looms for weaving
mats
1.Handloom
f.Shearing machine
g.Stenciling machine
h.Spooling machine
i.Dyeing machine
j.Rehanking machine
k.Spray painting machine
l.Pressing machine
m.Others(specify)

27. Manpower employed

Administrative Total amount paid during the year

No salary bonus
1 2 3 4
a. Office staff
b.Other regular salaried workers

28. Coir workers employed during the year

Coir workers Men Women Children

1 2 3 4
a.No of mendays
b.Wages paid-Rs
c.Bonus paid –Rs
d.Other emoluments
(specify)Rs
29. Working conditions provided to the employees

Conditions of Put a General Put a Medical Yes/no Health Remarks

work place tick amenities tick facilities hazards if
mark provided mark any
(describe)
1 2 3 4 5 6 7 8
Light and free air Latrine

Cleanliness Urinal Employer

Arrangements for Drinking ESI

work water
Others
Rest shelter

Canteen
 136

30. Benefits to the employees

Item Yes/no Annual Remarks

contribution if any
Rs.
1 3 4 5
Provident Fund
E.S.I Scheme
Maternity benefit
Welfare fund
Leave with wages
Holiday wages
Accident benefits
Others(specify)

31. Particulars of employees

Sl no. Activity Average Total Total Total Total Total Remitted

working no.of mandays wages bonus other to coir
hours in employees during paid paid benefits workers
a day the last welfare
year board
1 2 3 4 5 6 7 8 9

32. Is the society faces any man made problems?

Yes No
33. If yes, Is it affect the total functioning of society?
Yes No

34. Scale of operation: Small Medium Large

35. Nature of manufacturing activity: Production Processing Marketing

36. Nature of operation: Manual Mechanical Both

37. Nature of finished product: Coir Coir mattress Rubberized products

38. Annual installed capacity: In units In volume

39. Actual percentage of capacity utilization: In unit In volume

 137

40. Idle/ extra capacity: In unit In volume

41. Nature of market: Domestic Foreign Both

42. Is there any time lag in collection of proceeds from Coir Fed or Coir Board?
Yes No

43. If yes, how many days/months will take for realizing cash?
15 days 15-30 days 1-2 month above 2 months

44. Is it manageable?
Yes No

45. If yes, how can you manage the problem of shortage of funds?
a……………………………………
b……………………………………
c……………………………………
46. Nature of distribution of output:

Direct Export agencies Franchisees Governmental agencies

47. State the present status of this unit

Successful Working Sick Closed

48. Rank the following.

1- Excellent 2-Good 3-Average 4-below average 5-Poor
Score
Issues
1 2 3 4 5
Finance/subsidy
Managerial skill
Lack of sufficient employees
Space for working
Expertise knowledge
Technical know how
Marketing strategies
Present availability of raw material
Availability of workers
Support from Govt./NGO
Sufficiency of buyers/suppliers
Lack of coir spinning factories
 138

Lack of standard coir/husk products

Environmental support
Transportation facility
Number of working day
Wage rate
Other benefits (D.A,PF,ESI)
Trade union activities
Demand from domestic market
Demand from foreign market
Support from Coir Fed/Coir Board
Equipment and machinery used
Innovation, product development
49. Do you support the statement that ‘large scale coir manufacturers accumulate all the
benefits of coir industry’?
Yes No

50. Do you think that mechanization of coir industry will empower the workers
economically?
Yes No

51. State your views about mechanization of coir Co-operative society?

Factors Yes No No
Information
Higher degree of workers
participation
Higher profitability
Higher productivity
Good working condition at the site
Less environment pollution
Less labour cost
Standardisation of finished products
Shorter payback period
Less working time
Less maintenance cost
Reduction in the number of workers
Low cost of production

52. Is there any production target for workers? Yes No

53. Is there any need to change the production target after mechanization? Yes No

54. Does the society provide any social security measures to coir workers?

Yes No
 139

55. Wage payment system followed in coir industry

Time rate Piece rate both Time and Piece rate

56. Are you satisfied with the present wage rate? Yes No

57. How would you rate the following services of Coir Board?

Rating: 1-Excellent 2-Good 3-Average 4-below average 5-Poor

Services 1 2 3 4 5
Arranging Finance
Providing training and development
Environmental clearance
Arranging machinery
Arranging subsidies
Marketing coir products
Arranging warehouse/store
Arranging insurance
Arranging technical know-how
Sharing innovative ideas
Welfare of workers
Attracting entrepreneurs
Arranging support from Government
Fixing prices
Fixing wages
Fixing output
58. Does coir board take appropriate measures for fixing productivity based wage rate?

Yes No

59. State how coir society contributes to enhance the standard of living of coir workers?

Sl. Factors Yes No No

No Information
1 Economic benefit
2 Employment opportunity
3 Promoting skilled labours
4 Global recognition and acceptance
5 Developing creative ideas
6 Developing by-products
7 Expanding foreign exchange
8 Developing SSI units
9 Promoting new entrepreneurs
10 Promote trade union activities
11 Promote health and family welfare
12 Promotes security and safety
 140

60. State wage rate of workers per day or per month?

Average wage per day (in Rs.) Average days of employment

provided in a year per person
Minimum Maximum Minimum Maximum
Male
Female
61. Whether state government is giving matching grant in time? Yes No

62. Have you participated in any exhibition/fairs? Yes No

63. Do you think that assistance/subsidy is adequate to meet your requirement? Yes No

64. If no, please indicate the assistance required for market development?

Activity Amount required Justification for

(%of sales or minimum) assistance
Publicity
Opening new showroom/ outlet
Renovation of existing sales outlets
Market study
Setting up of market intelligents net work
If any other (please specify)
65. What strategies are as required compete with to face threat from synthetic products?

Strategy Suggested strategy

Short term
Mid term
Long term

66. Any special efforts are required for local market development of coir products.

Yes No

If yes, what are they?

a) Advertisement through media
b) Fairs and exhibitions
c) Promotion through awareness campaign.
d) Reduce cost of production.
e) Promotion of exports

67. What strategies are required to focus attention to face the competition from synthetic products?

Strategy Suggested strategy

Short term
Mid term
 141

68. How do you address the following issues?

Issue Strategy
Cost related competition
Quality and technology
Brand image
Publicity of coir products
Aggressive marketing
Market intelligence and network
Increase in staff
Door delivery
Mobile van
Appointment of sales agents
Motivation
Customer relationship
If any other(please specify)

69. What measures you can suggest for promoting Coir products in the domestic market?

1) ………………………………………………………………………….
2) ………………………………………………………………………….
3) ………………………………………………………………………….
4) ………………………………………………………………………….
5) ………………………………………………………………………….

Appendix - C2
PROBLEMS AND PROSPECTS OF COIR INDUSTRY
Interview Schedule II

For Private Entrepreneurs

Name of the unit :

Location :

Permanent address :

Correspondence address :

Contact person :

E-mail :

Designation :
 142

Ph no. Mob: Fax:

2. Please indicate the status of unit.

Sl .no Type of unit Put a

tick
mark
1. Successful
2. Working/Defunct
3. Sick

3. Is this unit in operation? Yes No

4. Total no. of workers in the unit.

5. Fixed asset owned by the unit

Item Owned Leased

Area(cents) Value Rs. Area cents Annual rent
Rs.
1 2 3 4 5
a. Land
b.Building
c.Plant and machinery
d.Retting units
Capacity

6. Source of finance

Source of finance Amount in rupees

a. Own finance
b.Bank/financial institutions/ N.C.D.C
c.Government loan
d.Government subsidy
e.Financial assistance from coir board
f.Others (specify)

7. Raw material

Stock position Raw husk Retted husk Fibre Coir yarn Mats/matting Others(specify)
s
Qty Value Qty Valu Qty Valu Qty Value Qty Value Qty Value
e e
Ton Rs Ton Rs Ton Rs Ton Rs Ton Rs Ton Rs
1 2 3 4 5 6 7 8 9 10 11 12 13
 143

a.Begining of
the year
b.End of the
year
c.Purchased/pro
duced during the
year

1.Source code
2.Transport
charges incurred

Code-Own Produce-1, Purchased from Private Dealers-2, purchased from co-operative society-3,
Others (specify)-4
8. Production and sales during the year
Item Production Sales Transportation cost

Qty Value Qty Value Qty Value

1 2 3 6 7 8 9
a.Retted husk
b.Coir fibre
c.Coir yarn variety
and runnage
1.
2.
3.
d.Coir rope
e.Fibre mats
f.Coir mats
g.Coir mattings
h.Coir geo textiles
i.Coir pith
j.Curled coir
k.Rubberised coir –
goods
l.Others(specify)
9. Types of activity (put tick mark)

Purchase of raw husk Rett spinning

Purchase of retted husk Machine spinning
Mechanical extraction of fibre Sheering
Beating husk Stenciling
Purchase of fibre Rubber backing
Fibre cleaning Latex backing
Turbo cleaning Dyeing
Hand spinning Bailing press
Manufacturing of mates and mattings Rope making
Others (specify)
 144

10. Equipment used

Item No Owned Rented no. Annual rent Remarks

. Purchase Year of Rs.
value purchase
1 2 3 4 5 6 7
a.Defibring
1.Combing plant
2.Decorating plant
b.Fibre cleaning machine
c.Ratt
1.Two spindle
2.Three splint
3.Four splint
4.Six splint
d.Spinning machine
e.Looms for weaving
mats
1.Handloom
f.Shearing machine
g.Stenciling machine
h.Spooling machine
i.Dyeing machine
j.Rehanking machine
k.Spray painting machine
l.Pressing machine
m.Others(specify)

11. Manpower employed

Administrative Total amount paid during the year

No salary bonus
1 2 3 4
a. Office staff
b.Other regular salaried workers
12. Coir workers employed during the year

Coir workers Men Women Children

1 2 3 4
a.No of mendays
b.Wages paid-Rs
c.Bonus paid -Rs
d.Other emoluments
(specify)Rs
 145

13. Working conditions provided to the employees

Conditions of Put a General Put a Medical Yes/no Health Remarks

work place tick amenities tick facilities hazards if
mark provided mark any
(describe)
1 2 3 4 5 6 7 8
Light and free air Latrine

Cleanliness Urinal Employer

Arrangements for Drinking ESI

work water
Others
Rest shelter

Canteen
14. Benefits to the employees

Item Yes/no Annual Remarks

contribution if any
Rs.
1 3 4 5
Provident Fund
E.S.I Scheme
Maternity benefit
Welfare fund
Leave with wages
Holiday wages
Accident benefits
Others(specify)

15. Particulars of employees

Sl no. Activity Average Total Total Total Total Total Remitted

working no.of mandays wages bonus other to coir
hours in employees during paid paid benefits workers
a day the last welfare
year board
1 2 3 4 5 6 7 8 9
 146

16. Scale of operation: Small Medium Large

17. Nature of manufacturing activity: Production Processing Marketing

18. Nature of operation: Manual Mechanical Both

19. Nature of finished product: Coir Coir mattress Rubberized products

20. Annual installed capacity: In units In volume

21. Actual percentage of capacity utilization: In unit In volume

22. Idle/ extra capacity: In unit In volume

23. Nature of market: Domestic Foreign Both

24. Nature of distribution of output:

Direct Export agencies Franchisees Governmental agencies

25. State the present status of this unit

Successful Working Sick Closed

26. Grade the performance of the unit.

2- Excellent 2-Good 3-Average 4-below average 5-Poor

Score
Issues
1 2 3 4 5
Finance/subsidy
Managerial skill
Lack of sufficient employees
Space for working
Expertise knowledge
Technical know how
Marketing strategies
Present availability of raw material
Availability of workers
Support from Govt./NGO
Sufficiency of buyers/suppliers
 147

Lack of coir spinning factories

Lack of standard coir/husk products
Environmental support
Transportation facility
Number of working day
Wage rate
Other benefits (D.A,PF,ESI)
Trade union activities
Demand from domestic market
Demand from foreign market
Support from Coir Fed/Coir Board
Equipment and machinery used
Innovation, product development

27. Do you support the statement that ‘large scale coir manufacturers accumulate all the benefits
of coir industry’?
Yes No

28. Do you think that mechanization of coir industry will empower the workers economically?

Yes No

29. State your views about mechanization of coir industry?

Factors Yes No No
Information
Higher degree of workers
participation
Higher profitability
Higher productivity
Good working condition at the site
Less environment pollution
Less labour cost
Standardisation of finished products
Shorter payback period
Less working time
Less maintenance cost
Reduction in the number of workers
Low cost of production

30. Is there any production target for workers? Yes No

31. Is there any need to change the production target after mechanization? Yes No
32. Unit provides any social security measures to coir workers?
Yes No
 148

33. Wage payment system followed here

Time rate Piece rate both Time and Piece rate

34. Are you satisfied with the present wage rate? Yes No

35. How would you rate the following services of Coir Board?

Rating: 1-Excellent 2-Good 3-Average 4-below average 5-Poor

Services 1 2 3 4 5
Arranging Finance
Providing training and development
Environmental clearance
Arranging machinery
Arranging subsidies
Marketing coir products
Arranging warehouse/store
Arranging insurance
Arranging technical know-how
Sharing innovative ideas
Welfare of workers
Attracting entrepreneurs
Arranging support from Government
Fixing prices
Fixing wages
Fixing output
36. Does coir board take appropriate measures for fixing productivity based wage rate?

Yes No

37. State how unit contributes to enhance the standard of living of coir workers?

Sl. Factors Yes No No

No Information
1 Economic benefit
2 Employment opportunity
3 Promoting skilled labours
4 Global recognition and acceptance
5 Developing creative ideas
6 Developing by-products
7 Expanding foreign exchange
8 Developing SSI units
9 Promoting new entrepreneurs
10 Promote trade union activities
11 Promote health and family welfare
12 Promotes security and safety
 149

38. State wage rate of workers per day or per month?

Average wage per day (in Rs.) Average days of employment

provided in a year per person
Minimum Maximum Minimum Maximum
Male
Female
39. Whether state government is giving matching grant in time? Yes No

40. Have you participated in any exhibition/fairs? Yes No

41. Do you think that assistance/subsidy is adequate to meet your requirement? Yes No

42. If no, please indicate the assistance required for market development?

Activity Amount required Justification for

(%of sales or minimum) assistance
Publicity
Opening new showroom/ outlet
Renovation of existing sales outlets
Market study
Setting up of market intelligents net work
If any other (please specify)
43. What strategies are as required compete with to face threat from synthetic products?

Strategy Suggested strategy

Short term
Mid term
Long term
44. Any special efforts are required for local market development of coir products.

Yes No

If yes, what are they?

f) Advertisement through media

g) Fairs and exhibitions
h) Promotion through awareness campaign.
i) Reduce cost of production.
j) Promotion of exports

45. What strategies are required to focus attention to face the competition from synthetic products?

Strategy Suggested strategy

Short term
Mid term
 150

46. How do you address the following issues?

Issue Strategy
Cost related competition
Quality and technology
Brand image
Publicity of coir products
Aggressive marketing
Market intelligence and network
Increase in staff
Door delivery
Mobile van
Appointment of sales agents
Motivation
Customer relationship
If any other(please specify)
47. What measures you can suggest for promoting Coir products in the domestic market?

6) ………………………………………………………………………….
7) ………………………………………………………………………….
8) ………………………………………………………………………….
9) ………………………………………………………………………….
10) ………………………………………………………………………….

Appendix – C3
Problems and prospects of coir industry
Questionnaire for mats and Matting units
Interview schedule III
Name of Society :
Location :
Permanent address :
Correspondence address :
Contact person :
E-mail :
Designation :
Ph no. Mob: Fax:
1. Please indicate the type of co-operative society.
Sl .no Type of unit Put a
tick
mark
1. Central co-operative society
2. Parimary Co-operative society
3. Apex co-operative society
4 State owned coir development agency
5 If any other-specify
 151

2. Please state the academic Qualifications of Secretary and Adminstrators

Secretary (a)…………………………. Administrators (a)………………………
(b)………………………….. (b)………………………
(c)………………………….. (c)………………………

3. Please state the scale of pay followed by coir/mat Co-operative society?

4. Is there any relationship between President and Secretary?

Yes No

5. If yes, what type of relationship is followed in the society?

6. Please state the duration of elected President in the society.

7. What are the procedures followed for appointing Secretary and other staff in the society?

a……………………………………
b……………………………………
c……………………………………

8. Please state the status of the society/coir business

Successful Failure

9. If failure, what are the causes for the failure?

…………………………………………………………
………………………………………………………….
…………………………………………………………

10. Is this unit in operation? Yes No

11. The total no. of members in the unit.

12. Fixed asset owned by the unit

Item Owned Leased

Area(cents) Value Rs. Area cents Annual rent
Rs.
1 2 3 4 5
a. Land
b.Building
c.Plant and machinery
d.Retting units
Capacity
 152

13. Please state the details of unused machinery in the society.

a……………………………………
b……………………………………
c……………………………………
14. What are the reasons for unused machinery stocked in the society?
a……………………………………
b……………………………………
c……………………………………

15. Is there any fluctuation in the cost of husk/fibre used for coir manufacture/process?
Yes No

16. Please state the purchasing pattern of coir/fibre into the society.
From Pollachi From Local market
Own production From other places

17. Source of finance

Source of finance Amount in rupees

a. Own finance
b.Bank/financial institutions/ N.C.D.C
c.Government loan
d.Government subsidy
e.Financial assistance from coir board
f.Others (specify)
18. Is the society having any financial problems?
Yes No
19. Is there any special scheme/assistance available to the society during the last year?
Yes No
20. If yes, mention the details…
a.
b.
Name of Schemes
c.
d.
a.
b.
Year introduced
c.
d.
a.
b.
Which Agency
c.
d.
 153

a.
b.
Purpose
c.
d.
a.
b.
Amount
c.
d.

21. State the volume of indebtedness of the society, if any?

Yes No
22. If yes, Please state the details of your present indebtedness.

a………………………………………..

b……………………………………….

c……………………………………….
23. Raw material

Stock position Raw husk Retted husk Fibre Coir yarn Mats/matting Others(specify)
s
Qty Value Qty Valu Qty Valu Qty Value Qty Value Qty Value
e e
Ton Rs Ton Rs Ton Rs Ton Rs Ton Rs Ton Rs
1 2 3 4 5 6 7 8 9 10 11 12 13
a.Begining of
the year
b.End of the
year
c.Purchased/pro
duced during the
year

1.Source code
2.Transport
charges incurred

Code-Own Produce-1, Purchased from Private Dealers-2, purchased from co-operative society-3,

Others (specify)-4
 154

24. Production and sales during the year

Item Production Sold to coirfed Sold to others Transportation cost

Qty Value Qty Value Qty Value Qty Value

1 2 3 4 5 6 7 8 9
a.Retted husk
b.Coir fibre
c.Coir yarn variety
and runnage
1.
2.
3.
d.Coir rope
e.Fibre mats
f.Coir mats
g.Coir mattings
h.Coir geo textiles
i.Coir pith
j.Curled coir
k.Rubberised coir –
goods
l.Others(specify)

25. Types of activity (put tick mark)

Purchase of raw husk Rett spinning
Purchase of retted husk Machine spinning
Mechanical extraction of fibre Sheering
Beating husk Stenciling
Purchase of fibre Rubber backing
Fibre cleaning Latex backing
Turbo cleaning Dyeing
Hand spinning Bailing press
Manufacturing of mates and mattings Rope making
Others (specify)

26. Equipment used

Item No Owned Rented no. Annual rent Remarks

. Purchase Year of Rs.
value purchase
1 2 3 4 5 6 7
a.Defibring
1.Combing plant
2.Decorating plant
b.Fibre cleaning machine
c.Ratt
1.Two spindle
2.Three splint
3.Four splint
 155

4.Six splint
d.Spinning machine
e.Looms for weaving
mats
1.Handloom
f.Shearing machine
g.Stenciling machine
h.Spooling machine
i.Dyeing machine
j.Rehanking machine
k.Spray painting machine
l.Pressing machine
m.Others(specify)

27. Manpower employed

Administrative Total amount paid during the year

No salary bonus
1 2 3 4
a. Office staff
b.Other regular salaried workers

28. Coir workers employed during the year

Coir workers Men Women Children

1 2 3 4
a.No of mendays
b.Wages paid-Rs
c.Bonus paid –Rs
d.Other emoluments
(specify)Rs
29. Working conditions provided to the employees

Conditions of Put a General Put a Medical Yes/no Health Remarks

work place tick amenities tick facilities hazards if
mark provided mark any
(describe)
1 2 3 4 5 6 7 8
Light and free air Latrine

Cleanliness Urinal Employer

Arrangements for Drinking ESI

work water
Others
Rest shelter

Canteen
 156

30. Unit benefits to the employees

Item Yes/no Annual Remarks

contribution if any
Rs.
1 3 4 5
Provident Fund
E.S.I Scheme
Maternity benefit
Welfare fund
Leave with wages
Holiday wages
Accident benefits
Others(specify)
31. Particulars of employees

Sl no. Activity Average Total Total Total Total Total Remitted

working no.of mandays wages bonus other to coir
hours in employees during paid paid benefits workers
a day the last welfare
year board
1 2 3 4 5 6 7 8 9

32. Do you think that is there any men made activities are carried out in the society?
Yes No
33. If yes, Is it affect the total functioning of society?
Yes No

34. Scale of operation: Small Medium Large

35. Nature of manufacturing activity: Production Processing Marketing

36. Nature of operation: Manual Mechanical Both

37. Nature of finished product: Coir Coir mattress Rubberized products

38. Annual installed capacity: In units In volume

39. Actual percentage of capacity utilization: In unit In volume

 157

40. Idle/ extra capacity: In unit In volume

41. Nature of market: Domestic Foreign Both

42. Is there any time lag occurred on account of coir/mat sold to Coirfed?
Yes No

43. If yes, how many days/months will take for realizing cash?
15 days 15-30 days 1-2 month above 2 months

44. Is it manageable?
Yes No

45. If yes, how can you manage the coir/mat operation?

a……………………………………
b……………………………………
c……………………………………
46. Nature of distribution of output:

Direct Export agencies Franchisees Governmental agencies

47. State the present status of this unit

Successful Working Sick Closed

48. Rank the following.

3- Excellent 2-Good 3-Average 4-below average 5-Poor
Score
Issues
1 2 3 4 5
Finance/subsidy
Managerial skill
Lack of sufficient employees
Space for working
Expertise knowledge
Technical know how
Marketing strategies
Present availability of raw material
Availability of workers
Support from Govt./NGO
Sufficiency of buyers/suppliers
Lack of coir spinning factories
Lack of standard coir/husk products
 158

Environmental support
Transportation facility
Number of working day
Wage rate
Other benefits (D.A,PF,ESI)
Trade union activities
Demand from domestic market
Demand from foreign market
Support from Coir Fed/Coir Board
Equipment and machinery used
Innovation, product development
49. Do you support the statement that ‘large scale coir manufacturers accumulate all the
benefits of coir industry’?
Yes No

50. Do you think that mechanization of coir industry will empower the workers
economically?

Yes No

51. State your views about mechanization of coir Co-operative society?

Factors Yes No No
Information
Higher degree of workers
participation
Higher profitability
Higher productivity
Good working condition at the site
Less environment pollution
Less labour cost
Standardisation of finished products
Shorter payback period
Less working time
Less maintenance cost
Reduction in the number of workers
Low cost of production

52. Is there any production target for workers? Yes No

53. Is there any need to change the production target after mechanization? Yes No

54. Does the society provide any social security measures to coir workers?

Yes No
 159

55. Wage payment system followed in coir industry

Time rate Piece rate both Time and Piece rate

56. Are you satisfied with the present wage rate? Yes No

57. How would you rate the following services of Coir Board?
Rating: 1-Excellent 2-Good 3-Average 4-below average 5-Poor

Services 1 2 3 4 5
Arranging Finance
Providing training and development
Environmental clearance
Arranging machinery
Arranging subsidies
Marketing coir products
Arranging warehouse/store
Arranging insurance
Arranging technical know-how
Sharing innovative ideas
Welfare of workers
Attracting entrepreneurs
Arranging support from Government
Fixing prices
Fixing wages
Fixing output

58. Does coir board take appropriate measures for fixing productivity based wage rate?

Yes No

59. State how coir society contributes to enhance the standard of living of coir workers?
Sl. Factors Yes No No
No Information
1 Economic benefit
2 Employment opportunity
3 Promoting skilled labours
4 Global recognition and acceptance
5 Developing creative ideas
6 Developing by-products
7 Expanding foreign exchange
8 Developing SSI units
9 Promoting new entrepreneurs
10 Promote trade union activities
11 Promote health and family welfare
12 Promotes security and safety
 160

60. State wage rate of workers per day or per month?

Average wage per day (in Rs.) Average days of employment

provided in a year per person
Minimum Maximum Minimum Maximum
Male
Female
61. Whether state government is giving matching grant in time? Yes No

62. Have you participated in any exhibition/fairs? Yes No

63. Do you think that assistance/subsidy is adequate to meet your requirement? Yes No

64. If no, please indicate the assistance required for market development?

Activity Amount required Justification for

(%of sales or minimum) assistance
Publicity
Opening new showroom/ outlet
Renovation of existing sales outlets
Market study
Setting up of market intelligents net work
If any other (please specify)
65. What strategies are as required compete with to face threat from synthetic products?

Strategy Suggested strategy

Short term
Mid term
Long term

66. Any special efforts are required for local market development of coir products.

Yes No

If yes, what are they?

k) Advertisement through media

l) Fairs and exhibitions
m) Promotion through awareness campaign.
n) Reduce cost of production.
o) Promotion of exports

67. What strategies are required to focus attention to face the competition from synthetic products?

Strategy Suggested strategy

Short term
Mid term
 161

68. How do you address the following issues?

Issue Strategy
Cost related competition
Quality and technology
Brand image
Publicity of coir products
Aggressive marketing
Market intelligence and network
Increase in staff
Door delivery
Mobile van
Appointment of sales agents
Motivation
Customer relationship
If any other(please specify)

69. What measures you can suggest for promoting Coir products in the domestic market?

1) ………………………………………………………………………….
2) ………………………………………………………………………….
3) ………………………………………………………………………….
4) ………………………………………………………………………….
5) ………………………………………………………………………….

Appendix - D

Coir Sector:
Schemes under the XIIth Five Year Plan
(Kerala State Planning Board)

1. Marketing, Publicity Propaganda, Trade Exhibitions and Assistance for

Setting up of Showrooms
(Outlay: Rs. 800.00 lakh)

The objective of the scheme is to popularize the activities in the coir sector
and strengthening marketing for overall development of the sector. The outlay
proposed is for attending and organizing trade fairs at State, National and
international level including Coir Kerala. Support to be provided to co-operatives,
coir PSUs and other institutions/departments in the coir sector for participation in
trade fairs/exhibitions, buyer seller meet, coir mart, popularization of schemely
activities, conducting studies, enumeration, documentation of activities, project
report preparation, conducting seminars/awareness camps/workshops, giving
awards and scholarship in the coir sector, organizing coir day etc.
 162

An amount of Rs. 800 lakh is provided in the budget for 2015-16 for above
activities.

2. Market Development Assistance for the Sale of Coir and Coir Products
(50% SS)

(Outlay: Rs. 800.00 lakh)

The Government of India substituted Rebate scheme with MDA, at the rate of
sales turnover prescribed by the Government of India. The State contributes 50%
of the MDA. The provision will be utilized to promote sales of coir and coir products,
market development programme etc. as per Government of India norms along with
central share. The incentives shall be input output linked for the products of
Coirfed, Fomil, Kerala Staate Coir Corporation, Coir co-operatives and others as
applicable based on total turnover of respective institution that of the sector as a
whole, emplopyment generated and value addition.

An amount Rs. 800.00 lakh is provided in the Budget 2015-16 for meeting
50% State Share for the implementation of the scheme.

3. Coir Geo-Textiles Development Programme

(Outlay: Rs. 30.00 lakh)

The comprehensive Geo Textiles Development Programme is aimed at
implementing model projects, inclusion of Geo Texrtiles as a standard engineering
material, creation of awareness on Geo-Textiles, strengthening of R&D, and
orientation on Geo-Textiles. The assistance can be given to COIRFED, Kerala State
Coir Co-operatives, Foam Mattings India Limited, Alapuzha Coir Cluster
Devvelopment Society, National Coir Research & Management Institute, Public
Works Department, Irrigation Department, Government Institutions and other
agencies for implementation of various Geo-textiles activities in their respective
areas based on projects with specific outcomes.

An amount of Rs. 30 lakh is provided in the Budget 2015-16 for above

activities.

4. Grant for Centers of Research and Development in Coir Technology

(Outlay: Rs. 620.00 lakh)

 163

The scheme intends to undertake R&D activities to improve the coir sector as a
whole including enhancing productivity in the sector, bringing innovation in
mechanization, creation of diversified coir products with high value addition,
infrastructure development, improving facilities and project based expenses of
NCRMI.

An amount of Rs. 620 lakh is provided in the Budget 2015-16 for the above
activities.

5. Margin Money Loan to Entrepreneurs

(Outlay: Rs. 5.00 lakh)

Small scale units in coir sector will be assisted by providing margin money
loan up to 50% as to avail financial assistance from banks/financial institutions, for
establishing new industrial units or expansion/diversification/modernization of
existing industrial units as per norms. The scheme is intended to attract
entrepreneurs for production of value added products in the coir sector based on
bankable projects.

An amount of Rs. 5.00 lakh is provided in the Budget 2015-16 for above
activities.

6. Regulated Mechanisation of Coir Industry

(Outlay: Rs. 7014.00 lakh)

To meet the global demand for coir products of superior quality and to
withstand the price competition from other fibers, it is essential to modernize and
enhance the productivity in coir industry. Value projects of co-operative societies,
public sector undertakings and other government institutions in the coir sector to
modernize, expand, diversify, reorganise and revive their units / factories will be
supported under the scheme. Assistance for setting up and modernization of Waste
Treatment plants, measures on pollution control, providing infrastructure facilities
including modern ratt / spinning / willowing machine, work sheds of coir co-
operatives, strengthening quality control mechanism, establishment of common
facility service centre, revitalization / expansion / modernization /diversification of
defibering mills also come under the purview of the scheme. No working capital
support or man power and other related activities is envisaged under the scheme.

Provision can also be utilized for the preliminary works to set up a permanent
exhibition and convention centre on a PPP Mode, integrated with the Coir Village of
international standards too.
 164

An amount of Rs. 7014.00 lakh is provided in the Budget 2015-16 for the
above activities.

7. Training and Management Improvement

(Outlay: Rs. 100.00 lakh)

The scheme intends to provide training to the employees of the Coir
Development Department, Coirfed, Kerala Coir Workers Welfare Fund Board and
PSUs and other workers in the latest development / research and development
innovations in the coir sector including advanced training and skill up-gradation,
creation of computer aided designs, modernization of the department by completing
computerization based on IT Master Plan, AMC, adding hardware and software,
maintenance of website, net connections etc and other e-governance activities
including purchase of essential computers and other equipments. Imparting training
for society functionaries and workers of coir cooperatives for the better management
of the societies including skill up-gradation and entrepreneurship development
activities are also included under the scheme.

An amount of Rs. 100.00 lakh is provided in the Budget 2015-16 for the
above activities.

8. Production and Marketing Incentive (PMI)

(Outlay: Rs. 500.00 lakh)

The Scheme is for providing assistance to promote production, marketing and
exports of coir and coir products including PVC and rubberized coir products and
Geo-textiles by the Primary Coir Cooperative Societies, Mats and Matting Co-
operative Societies, Apex Societies and Public Sector Undertakings, viz, Kerala State
Coir Corporation and Foam Mattings (India) Ltd. To encourage sustained production
so as to facilitate sale in coir sector and thereby generate more employment
opportunities in the sector. A portion of the amount can be utilized for promotion of
marketing heritage products, as well. Assistance shall be based on actual sales
turnover of the institutions – input output linked, employment generated, and value
added on products. Care should be taken to avoid incentives proposed under MDA
Scheme as well as duplication of assistance at various stages in the value chain. An
amount of Rs. 500.00 lakh is provided in the Budget 2015-16 for the above
activities.
 165

9. Price Fluctuation Fund

(Outlay: Rs. 1500.00 lakh)

Price Fluctuation Fund Scheme is intended to stabilize the price of coir fiber,
yarn and coir products. This is aimed to make the COIRFED, FOMIL and KSCC
capable to produce / procure the products from co-operatives giving price at par
with the production cost and compensates the loss, if any, sustained while selling at
market prices. The Co-operative societies, small scale producers and apex
organizations will be directly benefited and indirectly benefit the entire coir workers
by ensuring statutory wages. The provision can be used for price fluctuation /
purchase price stabilization programmes alike. The incentives shall be input-output
linked for the materials purchased through COIRFED, KSSC and FOMIL, based on
total sales turnovers of the respective institution, that of sector as a whole,
employment generated and value added on products. Due care is to taken to avoid
duplication of assistance at various stages in the value chain.

An amount of Rs. 1500.00 lakh is provided in the Budget 2015-16 for above
activities.

10. Govt. share participation for Coir Cooperatives

(Outlay: Rs. 75.00 lakh)

The scheme intends to strengthen the share capital base of the cooperatives
in the coir sector. Existing societies which have not availed the eligible amount in
full can also avail the assistance. It is proposed to assist 50 societies under the
scheme based on clear cut viable proposals for modernization/diversification with
specific outcomes.

An amount of Rs. 75.00 lakh is provided in the Budget 2015-16 for the above
activities.

11. Cluster development programme in coir sector

(Outlay: Rs. 150.00 lakh)
Cluster development programme in Coir sector is being implemented by Coir
Board under the Scheme of Fund for Regeneration of traditional Industries
(SFURTI). Clusters can be formed as per norms and avail the central assistance
based on projects for which a state share of Rs. 150 lakh is provided.

An amount of Rs. 150 lakh is provided in the Budget 2015-16 for the above
activities.
 166

12. Construction of building for Coir Bhavan

(Outlay: Rs. 100.00 lakh)

The scheme is intended for the completion of office building (Coir Bhavan)
and other facilities to make the office fully functional. A portion of the amount can
also be utilized for the work in connection with the construction of a building for
Alapuzha Coir Project Office.

An amount of Rs. 100.00 lakh is provided in the Budget 2015-16 for the
scheme.

Appendix E
Innovation in Coir Products

Coir composites as wood substitute

The R&D efforts of the Coir Board of India were successful in developing a coir
composite that can substitute wood , plywood and MDF boards. The composites are
made out of a combination of two or more materials to achieve superior properties than
that of its components. Here coir fiber and phenolic resoles are used to make the ply of
any desired density. Based on the density the ply can replace plastic boards, MDF
boards, or hard board made out of wood. The coir ply can be reinforced with plantation
wood like rubber wood veneer, for better properties and without destroying natural
forests. They are resistant to termite and borer attacks , flame retardant boiling water
resistant, and free from fungal growth . The nail holding properties are better than MDF,
because of the long staple and normal carpentry tools are good enough to work with.
The coir ply has been standardized under BIS (IS: 14842-2000). It has obtained
necessary approvals for use in the Indian Railway , Defence, CPWD, State Road
Transport Undertakings , HUDCO, Rajive Gandhi Rural Housing Corporation, State
Housing agencies , etc . This technology is now available for commercial exploitation.
Once it becomes popular , its contribution to save the tropical forest timber would be
phenomenal. It is contribution to save the tropical forest timber would be phenomenal.
Its contribution to save the tropical forest timber would be phenomenal. It is estimated
that 40 cubic meters of coir ply can save about 26.4.ha of forest per annum form
deforestation, assuming 250 trees per ha and each tree producing 1.80 cubic meters of
wood.
 167

Coir as packaging material

Another R&D project of the Coir Board in collaboration with the Indian Institute of
Packaging, Mumbai has developed alternative to conventional wood based packing
material for various applications. Crates made out of coir composite board for heavy
equipments like circuit breakers , Lids for fiber drums and collapsible reusable
containers replacing plywood are come of the very exciting products developed under
this project. They are superior in quality compared to commercial plywood, MDF board
etc. and are very cost competitive. Tests and trials of these products have been
successful. This technology is also now available for commercial exploitation .

Notwithstanding these achievements, the R&D efforts in the field of coir fiber
composites are still in its infancy. Substantial work is yet to be done in product
innovation and diversification especially to make it totally ecofriendly by using
biodegradable polymer as binding material and to reduce cost of production. There are
several other exciting opportunities for coir composites in the field of automobile
interiors like door panels , packaging industry , household articles like trays , plates, etc
for materials like crates, pallets corrugated containers , etc . However , it is their
mechanical reliability , durability, recycleability, end of the life disposability and above all
cost effectiveness that determine the preference for use of coir composites. The lack of
awareness about the advantages of the product, reluctance of contractors and
carpenters to use it , non-availability of a critical mass of these products in the market
are some of the obstacles on their way to getting popularized wit h the potential
consumers.

Coir bhoovastra

Another non-conventional product from the coir industry is the Coir Bhuoovastra
or Coir Geotextiles commonly being used in soil bioengineering applications . One of
the major ecological threats that the world faces today is soil erosion, particularly of the
topsoil . The fertile , roughly 30cm thick topsoil is what sustains life and civilizations on
earth. About 36% of the worlds cropland is losing topsoil at an alarming speed ,
threatening the food security of several countries. The developing countries are the
worst affected. It takes thousands of years to form the thin layer of surface soil but
needs only a few minutes to lose it through erosion caused either by water or wind or
mindless human interferences. About 27% of the land surface of our country is facing
threat of one or another form of soil erosion. Left unchecked , it can convert precious
cropland into barren wasteland. Deforestation is one major factor contributing to soil
erosion. The most ecofriendly method of erosion control is through revegetation
preferably using a natural geotextile . The Coir Bhoovastra as long term biodegradable
geotextile for soil bioengineering and bioremediation applications has been well
 168

acknowledged. The coir geotextile are available in woven or non-woven form as

meshes, needled felt, pads, Erosion Control Blankets (ECBs), geo-rolls, antiweed
blankets etc. The permeable fabric is easy to install and flows the contours of the soil
surface It is particularly useful for uneven and rocky terrains. It can be used as an
overlay for surface protection or as an interlay for separation, filtration and drainage. It
protects the soil surface and promotes growth of vegetation during its formative stage. It
can dissipate energy of flowing water and absorb solar radiation. The woven mesh
hugging on to the surface acts like micro check dams retaining moisture for the seeds to
germinate and the saplings to take root both in terrestrial and aquatic riparian habitat.
Depending on the terrain, weather condition, type of yarn used and the quality of the
fabric, product life varies from one to three years. In underwater applications it may
extend up to five years or even more. Thereafter it degrades into a mulch and get
incorporated in the soil , which gives it an edge over the synthetic geotextiles. Coir
Bhoovastra has a variety of applications as in soil stabilization, slope stabilization
watercourse protection stream bank protection, shoreline protection, storm water
channeling, road pavement, road surface stabilization, fly ash dump protection, mine
site reclamation, forest re-vegetation, watershed management, mud wall reinforcement
,landscaping etc. But the sad part is that while several countries abroad have
recognized its worth as proven by the increasing exports, it is yet to find its legitimate
place in our own country.

Coir Geotextiles are used as woven fabrics . non-woven , stitched blankets etc.
for various soil bioengineering applications. According to an estimate , the world market
demand for geotextiles is about 1400 million sq. meters and is growing steadily . It is in
fact an engineering material and it requires a technology based promotion strategy .
The characteristics of specific erosion protection selection of suitable technology and
testing of materials like coir geofabric, seeds, saplings, etc are all relevant for a
successful technology based promotion of coir geotextiles. The growing awareness
about the need for protecting soil, in the developed and developing countries is a
welcome sign With a new Farm Policy pruning of agricultural subsidies, replacing it with
a technical assistance programme for water and soil conservation, and new norms
under NPDES Phase ll in the USA the demand for geotextiles is bound to increase. This
opportunity has to be harnessed. The coir geotextile producing countries can jointly
embark on generic promotion of the product in a mutually beneficial manner . The vast
market for long term biodegradable geotextile which is legitimately that of coir , should
be exploited through cooperative efforts . This would enable bulk utilization of raw-
materials and generation of new employment opportunities particularly in the rural areas
preventing migration of workforce to urban centers.
 169

Rubberized coir and needled felt

A CFC/ITC study held in mid 90s has identified coir needled felt, geotextiles and
coir pith as products with good export promotion. mattresses, packaging material,
acoustic and insulation material, besides its use as geotextiles. The annual value of
global sales of rubberized coir is estimated to be over US $ 500 million . Coir needled
felt is being used as mattress material plant liners, insulation pads, geotextiles garden
articles and even as an organic mulch. The restriction imposed on use of polyurethane
in U.K. and enforcement of stringent fire retardance elsewhere in Europe, offers scope
for exporting rubberized coir . But this scope is conditioned by its price competitiveness.
The lose of market suffered by the European and Japanese car seat manufacturers
using rubberized coir , on account of high cost of production can possibly be regained if
rubberized coir producers of India and Sri Lanka can step in with quality products at
competitive prices.

Coir Pith
The coir pith or coir dust , which is the spongy residual material , is the by
product of fiber extraction which has caught the imagination of the horticulturists. It has
immense potential as a soil conditioner and moisture-retaining medium for horticultural
applications. It is widely being used in nurseries as a plant grow out medium especially
in hydroponics. Its demand is on the increase due to the restrictions being imposed on
mining of peat moss. With quality assurance, the product can find a ready market ,
either as such or as composted material. But the potential end users are not fully aware
of its advantages , and the promotional efforts have not been adequate . There is dearth
of testing facilities and recognized certification agencies in the producer countries. Other
garden articles like plant liners , baskets, grow bags, shredded husks, and bit fibers are
also in demand for orchid and other cut flower cultivation in the large and growing
Market Garden sector
(Christy Fernandez, Former Chairman, Coir Board)
 170

Appendix F

Evaluation Study of Domestic Market Development Assistance Scheme

implemented by Coir Board (2008)

By APITCO Ltd. Engineering Growth

Domestic Market Development Assistance Scheme implemented by Coir
Board

The Ministry of Micro, Small and Medium Enterprises (MSME),

Government of India has been implementing a scheme namely Domestic Market
Development Assistance Scheme (DMDA) through Coir Board since 2000-2001 for
domestic market development. Under this scheme, the Government provided
financial assistance @ 10 per cent of the annual sales turnover to the apex co-
operative societies, manufacturing societies, state-owned coir development
agencies/ showrooms/ sales depots of the Board. The burden of the assistance is
shared equally by the Central Government and the concerned state government.
The Ministry (MSME) awarded the evaluation study of the DMDA Scheme to
APITCO. The grant or assistance under DMDA has to be utilized for the following
purposes:

 To promote the sale of coir products manufactured by co-operatives and

Public Sector Enterprises committed to payment of minimum wages and
other obligatory benefits to coir workers.

 To encourage sustained production and more employment opportunities,

especially in the co-operative sector of the coir industry.

 To provide financial support on a continuing basis around the year to the

co-operative and public sector enterprises who undertake market
development programmes such as setting up sales network, publicity,
participation in exhibitions etc.

The main objectives of the study are to:

 Evaluate the existing system of implementation of the scheme

including the laid down criteria for selection of beneficiaries and average
time taken at each stage of processing the proposal leading to actual
disbursement of MDA to the beneficiaries through the State
Governments.
 171

 Assess the adequacy of the assistance provided under the scheme

and examine whether it is being utilized by the beneficiaries for the
purposes enshrined under the guidelines of the scheme.
 Assess the impact of the Market Development Assistance provided to
the beneficiary organizations through State Government in terms of the
extent of development of domestic market of coir and coir products.
 Identify the thrust areas for which the Coir Board is required to focus
its attention in the short, medium and long term to meet with the
competition from synthetic products in the domestic market.
 Assess the impact of the exhibitions organized by Coir Board or
Board's participation in exhibitions organized by other agencies in the
promotion of coir and coir products in domestic market in terms of
increase in sales and suggest measures for improving the effectiveness
of the participation in the exhibition for promoting coir materials in the
domestic market.
 Assess whether the amount spent on participation in exhibitions is
commensurate with the quantum of sales generated during and after the
exhibitions.
 Assess the functioning of the Showrooms & Sales Depots of Coir Board
and sales outlets of other Government - sponsored organizations with a
view to suggesting specific areas for improvement and promoting sales
of coir products in the domestic market.

Concluding observations and recommendations

The evaluation study on Domestic Market Development Assistance

(DMDA) scheme implemented by Coir Board was carried out as per the terms of
reference indicated by the Ministry of MSME, Government of India. Based on the
analysis of the field survey concluding main observations and suggestions for the
improvement of the scheme are detailed below:

Main Observations of the evaluation study

a) Impact

 The implementation of DMDA Scheme was found to be helpful but not

effective to Coir Board, Apex societies or primary co-operative societies
in view of limitations of specific purposes of utilization as per norms
stipulated by the MSME, Government of India.
 All the beneficiaries and agencies including Coir Board suggested to
make modifications in the scheme.
 172

b) Adequacy

 About 77% of the total respondents felt that the assistance provided
under the scheme is inadequate. Though beneficiaries availed 10%
assistance, they did not have proper awareness of the guidelines of the
scheme. The State agencies and directorates expressed that
implementation of the guidelines for envisaged activities by the primary
societies are not practicable. It is also noted that majority of the Primary
Coir Co-operative societies are selling the products to the Apex societies
and availing the grant. The specific purposes of the scheme i.e.
publication, innovations, showrooms etc, are not properly implemented.
The apex bodies are not effectively focusing these components.
 Majority of the respondents suggested to increasing the DMDA
Assistance from the existing 10% to 20% financial assistance based on
annual sales turnover of previous year instead of average of sales
turnover of last three years.

c) Selection of Beneficiaries

 There is no specific criterion for selection of beneficiaries under the

scheme as all societies are eligible based on the average sales
performance of the previous three years subject to submission of
required documents to the State Directorate. However, the number of
societies claimed DMDA are below 50% of the total societies in co-
operative sector.
 It is observed that exclusive fiber manufacturing societies are not
availing the assistance under DMDA scheme

d) Time taken for sanction & disbursement

 The average time taken for sanction and disbursement from the date of
submission of application ranging from 3-6 months in all the states.
Depending on the availability of funds, the state governments are
making the disbursement of the grants in one or two installments before
close of the financial year. Whenever, the claim was more than the
allocation of grant to the state, the release of arrears is nominally taking
more time and accordingly disbursement was also delayed.

e) Usefulness of the scheme

 173

 More than 80% of the societies expressed that scheme is useful and
their sales increased on an average. About 40% of growth rate was
envisaged in sales during the last six years at the rate of 7% per annum
on an average.

f) Competition from synthetic products

 Coir products are facing stiff competition with synthetic products in view
of the price advantage, durability and customer acceptance.


g) Participation in exhibitions

 Coir Board and other implementing agencies have been participating in

exhibitions extensively in different parts of the country. It helped only the
purpose of the demonstration of the products and creation of awareness.
The participation in exhibitions is not effectively made for increasing the
sales. Strategic approach is required to increase sales. In the case of
cooperative societies, participation in exhibition with the support or Coir
Board, helped them to increase the sales.
 It is generally observed that amount spent on participation in exhibitions
is not commensurate with the quantities of sales during the exhibition by
Coir Board.

h) Status of sales showrooms

The sales showrooms of either Coir Board or state agencies could not
achieve their sales targets except few showrooms of Coir Board.

a. It is normally found that the majority of sales outlets are in non-

commercial areas. Their ambiance is poor and infrastructure facilities are
not adequate
b. Ineffective domestic sales
c. No strategy for marketing
d. No effective schemes for inspiring customer satisfaction
e. Lack of proper product display
f. Poor interior decoration

i. Employable days and minimum wage

 The average employable days are only 215 days and minimum wage is
around Rs. 78 for men and women.
 174

 It is also observed that about 35% of the members of the society are
getting employment which needs to be addressed

Appendix G
Schemes of the Governments (GoK & GoI)
for the Promotion of Coir Industry in Kerala

A. Govt. of India schemes for Coir industry

Coir Beneficiary Schemes

Coir Board is a statutory body established by the Government of India under a

legislation enacted by the Parliament namely Coir Industry Act 1953 (45 of 1953) for
the promotion and development of Coir Industry in India as a whole. Coir Board is the
nodal central government agency promoting the development of Coir Sector in the
country. Coir Board has established five regional offices at Bangalore, Bhuvaneswar,
Thiruvananthapuram, Pollachi, Rajamundry. There are five sub-regional offices at
Kannur, Sivagangai, Guwahati, Kolkatta, and Thanjavur.

Following are the major Coir Beneficiary Schemes.

Scheme of Fund for Regeneration of Traditional Industries (SFURTI)

Planning Commission’s Working Group on XII Plan has recommended continuation of

SFURTI with its existing components like: replacement of equipments, setting up of
common facilities, support for development of new products, designs, packaging,
market promotion, capacity building activities, etc. It has also been recommended that
a number of KVI schemes hitherto being implemented by KVIC in Khadi and Village
Industries sectors with similar or overlapping objectives, be merged in SFURTI and give
flexibility to Implementing Agencies to choose their own basket of components as per
need. Thus the following schemes are being merged into SFURTI: The Scheme for
Enhancing Productivity and Competitiveness of Khadi Industry and Artisans, the Scheme
for Product Development, Design Intervention and Packaging (PRODIP), the Scheme for
Rural Industries Service Center (RISC) and other small interventions like Ready Warp
Units, Ready to Wear Mission, etc run by KVIC during XI Plan from Khadi Grants and VI
Grants. 1.7. Despite the success of the SFURTI scheme, an independent evaluation of
the SFURTI clusters highlighted the need to improve the sustainability and
competitiveness of these clusters. The recommendations include enhanced allocation
per cluster, increased responsibility of the Technical Agencies (TAs), critical financial
appraisal and development of robust business plans and convergence of programs at
the cluster level. 1.8. As mentioned in the Budget announcement made by Finance
Minister for 2013-14, 800 clusters of khadi, village industries and coir are to be
developed during XII Plan with an outlay of Rs 850 crore to cover 4 (four) lakh artisans.
 175

Assistance from Multilateral Development Banks is also to be leveraged, to extend

support under SFURTI to 800 clusters during the XII Plan.

Coir Udyami Yojana(CUY)

This is a credit linked subsidy scheme for setting up of coir units with
project cost upto Rs.10 lakhs plus one cycle of working capital, which shall
Description
not exceed 25% of the project cost. Working capital will not be considered
for subsidy.

Maximum admissible cost of the project is 10 lakhs plus working capital,

which shall not exceed 25% of the project cost.
Nature of
1.Beneficiary's contribution 5% of the project cost
Assistance
2.Bank credit 55%.
3.Rate of Subsidy 40% of the project

Individuals, Companies, Self Help Groups,Non Governmental

Who can Organizations, Institutions registered under Societies Registration Act
Apply? 1860, Production Co-operative Societies, Joint Liability Groups and
Charitable Trust,

Click on Apply Now button to Apply Online Or the applications can be

collected from Coir Board Offices, District Industries Centres, Coir Project
How to
Offices, Panchayati Raj Institutions and the Nodal Agencies approved by
Apply?
the Board for this purpose and have to be submitted directly to the Coir
Board Field Offices or through the DICs.
CUY Marketing Assistance
With a view to provide handholding support towards the marketing efforts
Description of the CUY beneficiaries Assistance will be given to establish a marketing
consortium.

1.Establishing Marketing consortium

2.Participation In Fairs/Exhibitions
Nature of
3.Hiring Spaces in the Showrooms
Assistance
4.Hiring Premises for office
5.Reimbursement of salary of consortium employees

Who can
Consortium with CUY beneficiaries as Members.
Apply?

How to
Click on Apply Now button to Apply Online.
Apply?
 176

Export Market Promotion Scheme

MARKET PROMOTION’ IS to expand the share of Indian coir products in global

market;to assess main competitors, product ranges, price, general setting and
promotional strategies;to motivate distribution channels to promote coir products; to
assess tariff/non tariff barriers on coir vis-a-vis competing products and pursue possible
their elimination/reduction through bilateral negotiations;to engage consultancy
services/professional agents for specific assignments/ projects relating to export
promotion;to seek expert and professional advice on export related matters, foreign
trade, etc.; andt o hold trade talks with decision makers in Governments/Chambers of
Commerce & Industry, market/ distribution network and vendor development
mechanisms. The activities to be undertaken under this component of the scheme are
Participation in the annual conference of International Erosion Control Association
(IECA).,Participation in the inter-session meetings of Inter Governmental Group on Hard
Fibres of FAO.,Participation in the global conferences of other related international
agencies. Organize and host international seminars for promoting exports.

Domestic Market Promotion Scheme

The Market Development Assistance Scheme has been introduced by the Coir Board
w.e.f. 2000-2001 in lieu of the Rebate Scheme that was in operation in the Coir Sector
till 1999-2000. The MDA is linked with the sales performance of the concerned
beneficiary organization and aims at providing incentives for better performance.

Development of Production Infrastructure Scheme

The principal thrust of the Development of Production Infrastructure Scheme of the

Ministry of MSME being implemented through the Coir Board, a statutory body under
the administrative control of Ministry of MSME, is on development of infrastructure for
the sustainable development of coir sector. The scheme envisages provision of financial
assistance for setting up new coir units and modernization of existing units for the
sustainable growth of the coir sector. Due to the extension of coconut cultivation to
non-traditional coconut producing states, coir industry also expanded its activities to
such states with the assistance of the Coir Board for development of infrastructure for
setting of coir units. The scheme is in operation since 7th Five Year Plan. Under the
existing scheme, financial assistance was being provided to coir production units at the
 177

rate of 25% of the cost of equipment and infrastructure facilities subject to maximum of
Rs.1.5 lakh for new units and Rs.50,000 for modernization of existing units. In the case
of units producing multiple items, the maximum amount of subsidy admissible is Rs.5
lakh. The existing parameters of the financial assistance under the scheme continued
during the first two years of XI Plan. The export oriented coir sector is investing on
development of infrastructure for the production of high valued coir products of
international standard by importing coir processing machinery to match the production
process in importing countries. The equipment which were so far considered for
financial assistance under the scheme have since become obsolete in terms of low
productivity and high labour orientation. It was, therefore, 2 felt necessary to revise the
financial norms of the assistance under the scheme. The scheme was got evaluated
through an independent agency. Keeping in view the recommendations of the
evaluating agency and all related factors, various parameters of the scheme have been
revamped to achieve the objectives of higher productivity, modernization, technology
upgradation, cost efficiencies and competitiveness of the Coir sector.

Skill Upgradation and Quality Improvement Scheme

The Coir Industry is a labour intensive and export oriented industry employing more
than 6.5 lakh persons. The decentralized operations in the coir industry without
adequate training of spinners and weavers have been posing problems particularly for
ensuring the desired level of quality in the ultimate products. Inferior quality may
ultimately turnout to be detrimental to the concerted efforts towards overall
development of the industry and also its survival, particularly it being a traditional
product, in the present context of unprecedented competition on account of cheap
synthetic substitutes, globalization and liberalization. Skill development is, therefore, the
most essential pre-requisite for the overall development of the industry and to
accelerate the spread of the industry into non-traditional areas. 1.2 Development of
skilled manpower in coir industry through appropriate training programmes is one of
the major activities of the Coir Board. Continuous improvement in the quality of certain
products is essential to sustain the demand for coir products and also for improvement
in prospects of coir products in a world, which is becoming more and more quality
conscious. In order to achieve the above objectives, the Board has been organizing,
quality improvement camps and entrepreneurship development programmes.
 178

Personal Accident Insurance Scheme for Coir workers

Coir Industry is a traditional cottage industry employing more than 6.5 lakh coir workers
of which 80% are women and belong to the poorest sections of the society. The coir
processing activities such as extraction of fibre, spinning of coir yarn, manufacture of
rope and finished products involve drudgery, strain and hardship. Basic amenities of life
are very often not available in this sector and the people are unable to find their own
resources to acquire such facilities. Though mechanization / modernization are taking
place in some sectors of the industry, the fibre extraction in white fibre sector is still
being undertaken manually under different working conditions. The coir workers
engaged in the extraction of fibre with the aid of machinery like crusher, disintegrator,
defibering machine, decorticating machine, spinning on motorized ratt and fully
automatic machine, and manufacture of products on looms etc, are prone to minor and
major accidents. In the background of demands for limited resources from various
interests, it is essential to implement a developmental scheme for the benefit of
marginalized group like coir workers. Because of the economic backwardness, coir
workers are not in a position to get them covered under any insurance scheme for
securing their life against accident/accidental death. It was in 1998 that the Coir Board
Coir Workers Group Personal Accident Insurance Scheme was first introduced in coir
sector to secure the life of coir workers against accidents. The scheme has been got
evaluated through an independent agency and based on its recommendations and other
factors, the scheme is proposed to be continued during XI plan. 1.2 The Group Personal
Accident Insurance Scheme for Coir Workers is aimed at providing insurance coverage
against accidental death, permanent total disability and permanent partial disability to
the coir workers in all coir producing states in India.

TRADE & INFORMATION

Government of India has approved a new credit linked subsidy scheme called
Rejuvenation, Modernization and Technology Upgradation of the Coir Industry to
facilitate sustainable development of the Coir Industry in the country which in turn
generate more employment opportunities especially for women and the weaker sections
of people in rural areas. CUY Scheme will be a Central Sector Scheme to be
administered by the Ministry of Micro, Small and Medium Enterprises. The Scheme will
be implemented by Coir Board a statutory organization under the Ministry of MSME as
the Nodal Agency at the national level. At State level the scheme will be implemented
through Board’s Regional Offices, Sub Regional Offices, Coir Mark Scheme Office and
District Industries Centres, Coir Project Offices, Banks and such other offices from time
to time. The Government subsidy under the scheme released to Coir Board will be
routed through the identified banks for the eventual distribution to the
beneficiaries/entrepreneurs in their bank accounts. The Implementing Agencies viz. Coir
 179

Board Offices, DIC, Coir Project Offices etc will associate with reputed Non
Governmental Organizations (NGOs)/reputed Autonomous Institutions/National Small
Industries Corporation/Panchayathi Raj Institutions and other relevant bodies in the
implementation of the Scheme especially in the area of identification of beneficiaries,
area of specific viable projects and providing training in Entrepreneurship Development,
verification of units established under the Scheme.

B. Govt. of Kerala schemes for Coir industry

Kerala Govt Subsidy/Grant Schemes for coir sector recommended by the Coir
Commission
S Amount
Name of the Scheme Details of the scheme Beneficiary
No allowed
For attending trade fairs/
exhibitions, set up
Fomil, Coirfed, KSCC,
showrooms for develop
eligible reimburse @
coir products markets
Mktg,Publicity,Propogan . 1.5. 50% of the cost.
1. Grant up to Rs. 1 lakh for
da crores Coop societies are
setting show rooms in
also eligible for this
places approved by
scheme.
Director of Coir
Development
Grant to enable Kerala
Coir Workers Welfare Granting pension 10.5 cr
13 Coir workers- appx
2 Fund Board to Other Grants etc 2cr Old
crores 45000
implement various age home 0.5 cr
welfare schemes
implementing pilot
projects, inclusion of Coirfed, K S C C,
Geotextiles as a standard FOMIL, ACCDS,
Coir Geo-textiles
engineering material, NCRMI, PWD,
3. Development 25 lakhs
strengthening of R&D Irrigation, KSEB and
Programme
and marketing efforts other Government
with product specified Institutions
MDA packages
Provide assistance @
50% subsidy to the, who
modernize their factory
for acquiring high
Regulated
productivity semi Co-op societies,
4. Mechanization of Coir 10 crores
automatic looms. individuals and PSU
Industry
procuring computer with
software for computer
aided designs. Special
investment subsidy from
 180

this provision to
mechanized defibering
mills established by
entrepreneurs @ 50% of
the fixed capital
investment, subject to
maximum Rs. 10.00 lakh.
Provide training in the
latest development/
research and
development innovations staff of Coir
in the Coir Sector. Development
Training and Managmt
5. including purchase of 75 lakhs Department, Coirfed,
Improvement
essential computers and Kerala Coir W W FB
other equipments, and PSUs
conducting EDPs for
starting and sustain
ventures
Provide financial support
for developing
infrastructure facilities for
attracting coir industries
Infrastructure 100 Co-operatives/ 2
in co-operatives. Co- 2.50
6. Development for Co- P S U s and defunct
operatives/P S U having crores
operatives ICDP units
land are eligible Also can
utilize for purpose of
common facility service
centres .
financial assistance to
Primary co-op
Production and promote production and
Societies, Mats and
7. Marketing Incentive marketing of coir 2 crores
Mattings Societies,
(PMI) products, rubberized coir,
PSU s
Geotextiles
10 crores
6-husk
collection
Establish Defibering Mills , 3-
and produce coir fibre in estblsht
the State revive/renovate of 25 D F
Establishment of workers' co-op
8. the existing Defibering Mills . 1-
Defibering Mills /Kudumbasree units
Mills, renvatn
incentives/subsidies for existing
husk collection scheme 30 D F
mills
 181

Revitalization of Coir Co- Running/defunct/clos

operatives by providing ed but revivable coop
fixed capital and working Societies, Mats &
Revitalization of Coir Co- capital assistance, 7.09 Mattings Societies
9.
operative Societies settling crores and SS Producers
pension/gratuity/share/thr Co-operatives, DF
ift clear the liabilities and Mill Co-operative
to improve its health Societies
stabilize the price of coir
fibre, yarn and coir
products Aimed
strengthen Coirfed,KSCC
Co-op societies.SS
10 capable to produce the
Price Fluctuation Fund 10 crores producers and apex
. products giving price at
organization
par with the production
cost and compensate the
loss, sustained while
selling at market prices.
Establish Kerala Coir
Marketing Consortium.
by utilizing the
investments of all stake
Kerala Coir marketing
11 holders including
Consortium/ Marketing 2 crores Coir sector
. PSUs/Coirfed/Co-
Company
operatives in coir
sector/small scale
producers/private
entrepreneurs etc
At 10% of annual turnover Result oriented. 40
(an average of three years). 6 crores
Market Development Co-operative CM &
12 Utilized to promote sales of 3 - State
Assistance for sale of coir and coir products,,
MC Societies and
. 3-
Coir Products identify new markets hire other institutions like
Central
marketing professionals Coirfed and 2 PSUs
Providing margin money
loan up to 50%, so as to
avail margin for financial
assistance from
banks/financial institutions, 10 lakhs
for establishing new
13 Margin Money Loan to limited to Small Scale
industrial units or
. Entrepreneurs expansion/ diversification of
2.50 lakh producers
existing industrial units. per unit
Also for meeting the Margin
Money Loan requirement of
cluster consortia in coir
sector
 182

Strengthen the share

Government share
14 capital base of the Co-
participation for Coir Co- 50.lakh 25 societies
. operatives in the Coir
operatives
Sector
State share of 2crores
provided for meeting all
types of cluster
15 Cluster development
development projects 2crores Coir sector
. programme
approved by the
Government of India.- for
SFRUTI and IIUS
measures for improving
the conditions of
16 Employee Welfare
employees, working in 50 lakhs Coir Workers
. Scheme (New Scheme)
the co-operative societies
of Coir sector

Appendix H
Coir Kerala 2016
Coir Kerala 2016 is the sixth edition of the world's biggest annual trade
event on coir and natural fibres. The five-day event will bring together scientists,
researchers and policymakers and facilitate discussions of strategies and new
initiatives to create jobs, better the conditions of coir workers, as also raise
productivity and earnings across the industry, state Minister for Revenue and
Coir Adoor Prakash told reporters here today.

"Following the announcement at last year's Coir Kerala to accelerate coir

husk procurement, production rose from 25,000 tonnes to 60,000 tonnes," he
said.

"The government is targeting 75,000 tonnes by the end of this fiscal

year," he said.
Noting that "the required value for self-sustainability in coir fibre
production is 2.25 metric tonne," he added that the government had taken steps
to ramp up production.
"The government has distributed Rs 4.5 crore among co-operative sectors
and earmarked Rs 5.5 crore to the Coir corporation's purchase price stabilisation
scheme," the minister said. Coir Kerala is also a showcase for an array of
innovative coir products and technologies to increase sector productivity and
profitability.
 183

The international pavilion will have 125 stalls while the national pavilion
will feature 135 stalls. The Government of Kerala initiated the Coir Kerala
programme in 2011 to rejuvenate the coir sector through fillips to production and
branding. Thiruvananthapuram-based National Coir Research and Management
Institute is the event's coordinating agency.

Appendix – I
Tabulated Data and Interpretation
Table 1.0
Comparative Income Statement of Pambalil CVCS No. 864
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 966,350.00 834,026.00 (132,324.00) (13.69)
Less: Cost of Goods sold 954,694.00 844,261.00 (110,433.00) (11.57)
Gross profit/loss 11,656.00 (10,235.00) (21,891.00) (187.81)
Less: Admin.expenses 220,412.00 232,213.00 11,801.00 5.35
Selling Expenses 18,892.00 23,209.00 4,317.00 22.85
Total Operating expenses 239,304.00 255,422.00 16,118.00 6.74
Operating Profit/loss (227,648.00) (265,657.00) (38,009.00) 16.70
Add: Non-Operating income 12,890.00 36,692.00 23,802.00 184.65
Net profit/Loss (214,758.00) (228,965.00) (14,207.00) 6.62

Comparative income statement analysis of the society shows that there is a decreasing trend in
sales value (13.69 per cent) as compared to previous year .This results in a reduction in gross profit from
11656 to a gross loss of 10235 in 2014-15. The percentage of net loss shows that there is an
increase in current year’s loss as compared to previous year (6.62 per cent).This society has provided
employment for 18 workers for 250 days leading to the generation of 4500 labour days in the current
year. This society is a functional one having the possibility of transforming it as an efficient and
successful one.
Table 2.0
Comparative Income Statement of Kandachira CVCS No. 50
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 540,176.00 588,432.00 48,256.00 8.93
Less: Cost of Goods sold 566,678.50 604,462.00 37,783.50 6.67
Gross profit/loss (26,502.50) (16,030.00) 10,472.50 (39.52)
Less: Admin.expenses 156,079.00 123,177.82 (32,901.18) (21.08)
Selling Expenses 14,551.50 11,718.00 (2,833.50) (19.47)
 184

Total Operating expenses 170,630.50 134,895.82 (35,734.68) (20.94)

Operating Profit/loss (197,133.00) (150,925.82) 46,207.18 (23.44)
Add: Non-Operating income 5,122.00 42,234.00 37,112.00 724.56
Net profit/Loss (192,011.00) (108,691.82) 83,319.18 (43.39)

The above statement reveals that there is an increase in the net sales (8.93 per cent) in current
year as compared to previous year 2013-14. The cost of goods sold also increased in the current year
(6.67 per cent). The gross loss in the current year was decreased due to the changes in sales value and
the net loss also showed a decreasing trend due to the impact of the reduction in operating expenses.
The operational efficiency of this society was satisfactory as the volume of loss decreased disregard of
the marginal increase in sales volume. This society also succeeded in providing 149 days of employment
to 15 workers leading to generation of 2235 labour days for the current financial year. Functionally the
performance of this society is satisfactory in providing more days of employment. Through proper
monitoring and control this CVCS also can be transformed to the level of break even in the near future.

Table 3.0
Comparative Income Statement of Cherumoodu CVCS No. 119
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 560,346.00 692,208.00 131,862.00 23.53
Less: Cost of Goods sold 570,318.00 727,882.00 157,564.00 27.63
Gross profit/loss (9,972.00) (35,674.00) (25,702.00) 257.74
Less: Admin.expenses 158,792.00 142,914.00 (15,878.00) (10.00)
Selling Expenses 14,900.00 20,900.00 6,000.00 40.27
Total Operating expenses 173,692.00 163,814.00 (9,878.00) (5.69)
Operating
Profit/loss (183,664.00) (199,488.00) (15,824.00) 8.62
Add:Non-Operating
income 17,162.00 13,549.00 (3,613.00) (21.05)
Net profit/Loss (166,502.00) (185,939.00) (19,437.00) 11.67

The comparative income statement of Cherumoodu CVCS reveals that sales value and cost of
goods sold has increased in the current year.(23.53 per cent & 27.63 percent respectively). The result
reveals, excess cost of goods sold in relation to sales. This has resulted in an increased volume of gross
loss (257.74 per cent). The performance of this society is also satisfactory as it succeeded in providing
193 days of work to 15 employees.(2895 labour days).as the loss of the society is marginal ,through
mechanisation and improved managerial skill ,it is very easy to transform these society as an
operationally successful unit.
 185

Table 4.0
Comparative Income Statement analysis of Kanjirakodu CVCS No. 358
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 59,118.00 294,288.00 235,170.00 397.80
Less: Cost of Goods sold 65,116.00 307,570.00 242,454.00 372.34
Gross profit/loss (5,998.00) (13,282.00) (7,284.00) 121.44
Less: Admin.expenses 26,997.00 65,681.00 38,684.00 143.29
Selling Expenses 4,900.00 13,700.00 8,800.00 179.59
Total Operating expenses 31,897.00 79,381.00 47,484.00 148.87
Operating
Profit/loss (37,895.00) (92,663.00) (54,768.00) 144.53
Add:Non-Operating
income 26,096.00 24,697.00 (1,399.00) (5.36)
Net profit/Loss (11,799.00) (67,966.00) (56,167.00) 476.03

This statement reveals that the gross loss has increased (121.44 per cent) in relation to increase
in sales (397.80 per cent) and cost of goods sold (372.34 per cent). The changes in sales volume is the
reason for the increase in operating expenses, operating loss and net loss. This society was a
dysfunctional one as it failed to provide sufficient number of working days (40 days in the year) to the
workers. As the loss of the society shows a fivefold increase, it is better to liquidate this unit than revive
it.

Table 5.0
Comparative Income Statement analysis of Pulikuzhi CVCS No. 626
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 1,301,593.00 1,182,384.00 (119,209.00) (9.16)
Less: Cost of Goods sold 1,238,355.00 1,205,328.00 (33,027.00) (2.67)
Gross profit/loss 63,238.00 (22,944.00) (86,182.00) (136.28)
Less: Admin.expenses 241,584.00 227,086.00 (14,498.00) (6.00)
Selling Expenses 23,500.00 22,500.00 (1,000.00) (4.26)
Total Operating expenses 265,084.00 249,586.00 (15,498.00) (5.85)
Operating Profit/loss (201,846.00) (272,530.00) (70,684.00) 35.02
Add: Non-Operating income 72,456.00 51,298.00 (21,158.00) (29.20)
Net profit/Loss (129,390.00) (221,232.00) (91,842.00) 70.98
 186

The comparative income statement of Pulikuzhi CVCS reveals that sales amount has a decreasing
trend (9.16 per cent). The decrease in the volume of sales influenced the cost of goods sold in the
current year. The result shows that the gross profit in the previous year has changed to gross loss in the
current year. This society also has succeeded in providing more days of employment (4320 days) to its
workers. This reveals that this society is operationally efficient. The percentage of loss is not justifiable
even though it is less (71 percent) when compared to other loss making units. It is feasible and economic
to adopt a step to revive the society.

Table 6.0
Comparative Income Statement of Kuzhiyam CVCS No. 629
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 244,525.00 302,036.00 57,511.00 23.52
Less: Cost of Goods sold 272,852.00 356,626.00 83,774.00 30.70
Gross profit/loss (28,327.00) (54,590.00) (26,263.00) 92.71
Less: Admin.expenses 74,431.00 49,898.00 (24,533.00) (32.96)
Selling Expenses 7,495.00 16,125.00 8,630.00 115.14
Total Operating
expenses 81,926.00 66,023.00 (15,903.00) (19.41)
Operating Profit/loss (110,253.00) (120,613.00) (10,360.00) 9.40
Add: Non-Operating
income 2,552.00 3,460.00 908.00 35.58
Net profit/Loss (107,701.00) (117,153.00) (9,452.00) 8.78

This statement reveals that sales value and cost of goods sold of the CVCS were increased in the
current year. The increase in the percentage of cost of goods sold was (30.70 per cent) ,when compared
to sales value of (23.52 per cent). This leads to the increase in gross loss for the current year. The
reduction in the operating expenses (19.41 per cent) had an impact on the net loss of the current year as
compared to previous year. This society functioned for 270 days in the current year which resulted in the
generation of 4320 labour days that highlights its operational efficiency and commitment of management.
As the percentage of loss is marginal, it is desirable to modernize and mechanise this unit to transform it
as a successful one.
 187

Table 7.0
Comparative Income Statement of Charukkadu CVCS No. 631
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 779,929.00 806,472.00 26,543.00 3.40
Less: Cost of Goods sold 792,061.00 871,679.00 79,618.00 10.05
Gross profit/loss (12,132.00) (65,207.00) (53,075.00) 437.48
Less: Admin.expenses 153,751.00 191,673.64 37,922.64 24.66
Selling Expenses 23,929.00 14,250.00 (9,679.00) (40.45)
Total Operating expenses 177,680.00 205,923.64 28,243.64 15.90
Operating
Profit/loss (189,812.00) (271,130.64) (81,318.64) 42.84
Add: Non-Operating income 13,628.00 10,205.00 (3,423.00) (25.12)
Net profit/Loss (176,184.00) (260,925.64) (84,741.64) 48.10

The comparative income statement for the period of 2013-14 to 2014-15 reveals that sales value
and cost of goods sold increased to (3.4 and 10.05 per cent respectively) than the sales. This result has
led to an increase (437.48 per cent) in gross and net loss (48.10 percent) .195 days of work has been
provided by this society to 14 workers leading to the generation of 2730 labour days. This society has
also proved as operationally efficient. The increase in the percentage of gross loss of the society was
enormous (437.48 percent).but the net loss (48.10 percent) is justifiable. The reduced levels of selling
expense (40.25 percent) lead to decrease the net loss. Revival possibility of the society is satisfactory.

Table 8.0
Comparative Income Statement of Vellimon East CVCS No. 861
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 574,033.00 652,716.00 78,683.00 13.71
Less: Cost of Goods sold 571,583.00 725,575.00 153,992.00 26.94
Gross profit/loss 2,450.00 (72,859.00) (75,309.00) (325.32)
Less: Admin.expenses 78,458.00 159,785.00 81,327.00 103.66
Selling Expenses 18,714.00 12,800.00 (5,914.00) (31.60)
Total Operating expenses 97,172.00 172,585.00 75,413.00 77.61
Operating Profit/loss (94,722.00) (245,444.00) (150,722.00) 159.12
Add: Non-Operating income 15,026.00 10,998.00 (4,028.00) (26.81)
Net profit/Loss (79,696.00) (234,446.00) (154,750.00) 194.18
 188

The comparative income statement of Vellimon East CVCS reveals that as sales value increased
to 13.71 per cent, the cost of goods sold was doubled (26.94 the per cent) to sales. This has led to the
highest increase of (325.32 per cent) gross loss. The gross loss of the society is 3.25 times and net loss is
2 times of sales. This society is a functional one as it has provided 227 days of employment to14 workers
leading to generation of 3178 labour days in the current year.

Table 9.0
Comparative Income Statement of Nanthirikal CVCS No. 862
for the year ended 2014 and 2015
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 173,996.00 177,192.00 3,196.00 1.84
Less: Cost of Goods sold 200,387.00 199,291.00 (1,096.00) (0.55)
Gross profit/loss (26,391.00) (22,099.00) 4,292.00 (16.26)
Less: Admin.expenses 15,884.00 30,228.00 14,344.00 90.30
Selling Expenses 4,700.00 19,100.00 14,400.00 306.38
Total Operating expenses 20,584.00 49,328.00 28,744.00 139.64
Operating Profit/loss (46,975.00) (71,427.00) (24,452.00) 52.05
Add: Non-Operating income 900.00 675.00 (225.00) (25.00)
Net profit /Loss (46,075.00) (70,752.00) (24,677.00) 53.56

The increase in the sales of this CVCS over the period of analysis was marginal (1.84%). The
result shows that the operating expenses had increased (139.64 per cent) in the current year. This has
led to the increased net loss (53.56 per cent).this unit has provided 152 days of employment to the
workers in the current year. The operational feasibility of the society and chance of revival is marginal.

Table 10.0
Comparative Income Statement of Pambalil East CVCS No. 866
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 1,245,715.00 1,068,672.00 (177,043.00) (14.21)
Less: Cost of Goods sold 1,251,497.00 1,090,120.00 (161,377.00) (12.89)
Gross profit/loss (5,782.00) (21,448.00) (15,666.00) 270.94
Less: Admin.expenses 198,519.00 250,825.00 52,306.00 26.35
Selling Expenses 18,249.00 21,196.00 2,947.00 16.15
Total Operating expenses 216,768.00 272,021.00 55,253.00 25.49
Operating Profit/loss (222,550.00) (293,469.00) (70,919.00) 31.87
Add: Non-Operating income 14,092.00 48,463.00 34,371.00 243.90
Net profit/ Loss (208,458.00) (245,006.00) (36,548.00) 17.53
 189

Comparative income statement analysis of Pampalil East CVCS reveals and the cost of goods sold
is more than the sales value. It result has an impact on the increase in the gross loss for the current
year. The operating expenses also reveals an increasing trend (25.49 per cent), which leads to the
increase in net loss (17.53 per cent) .The operating efficiency of this society have reduced as volume of
sales had decreased to the extent of 14.21 percent .As more number of working days (263) are provided
by the management to the workers, it is observed that the functional efficiency of this society is
satisfactory. Despite of the decrease in the volume of operating loss of the society has increased
considerably resulting to a corresponding increase in the net loss. The net loss percentage is manageable
(17.53 percent) through sincere efforts. This society can also be revived as an operationally successful
unit. Inefficiency on the part of the management is observed as a serious drawback in almost all societies
with the exception of one or two profit making unit.

Table 11.0
Comparative Income Statement of Kanjirakodu CVCS No. 872
for the year ended 2013-14 and 2014-15
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 439,195.00 457,056.00 17,861.00 4.07
Less: Cost of Goods sold 460,697.00 483,696.00 22,999.00 4.99
Gross profit/loss (21,502.00) (26,640.00) (5,138.00) 23.90
Less: Admin.expenses 175,776.00 134,209.00 (41,567.00) (23.65)
Selling Expenses 20,370.00 20,225.00 (145.00) (0.71)
Total Operating expenses 196,146.00 154,434.00 (41,712.00) (21.27)
Operating Profit/loss (217,648.00) (181,074.00) 36,574.00 (16.80)
Add: Non-Operating income 15,624.00 17,965.00 2,341.00 14.98
Net profit/ Loss (202,024.00) (163,109.00) 38,915.00 (19.26)

Source: project report,kerala state coir development department.

The comparative financial statement analysis OF Kanjiracode CVCS revealed that there is
proportionate increase in sales and cost of goods sold in the current year (4.07 per cent and 4.99 per
cent respectively). The impact of increased sales and cost of goods sold has resulted in an increased
gross loss for the current year. The result also reveals decreasing operating expenses (21.27 per cent),
led to a corresponding decrease in net loss (19.26 per cent). This society succeeded in providing more
days of employment to the workers among the societies in Kundara circle. (2727 days).Even though loss
of the society is manageable, managerial efficiency is not satisfactory. Hence, it is to be enhanced.

Table 12.0
Comparative Income Statement of Perinadu CVCS No. 873
for the year ended 2013-14 and 2014-15
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 1,642,864.00 1,536,216.00 (106,648.00) (6.49)
Less: Cost of Goods sold 1,612,193.00 1,549,884.00 (62,309.00) (3.86)
 190

Gross profit/loss 30,671.00 (13,668.00) (44,339.00) (144.56)

Less: Admin.expenses 190,365.00 227,413.00 37,048.00 19.46
Selling Expenses 34,687.00 36,520.00 1,833.00 5.28
Total Operating expenses 225,052.00 263,933.00 38,881.00 17.28
Operating Profit/loss (194,381.00) (277,601.00) (83,220.00) 42.81
Add: Non-Operating income 14,398.00 56,419.00 42,021.00 291.85
Net profit/ Loss (179,983.00) (221,182.00) (41,199.00) 22.89

Source :project report,kerala state coir development department

The comparative analysis of the income statement shows that sales activities undertaken by this
society was decreased (6.49 per cent) as compared to the previous year. This result had an impact for
the shift of the society from gross profit to gross loss in the current year. There is an increase in the
amount of the operating expenses, for the year 2014-15, when compared to the previous year. The gross
loss percent (144.56) of the society id dissatisfactory, but the net loss percentage (23) is manageable.
This society has provided the maximum number of labour days to the workers among the CVCS under
Kundara circle .A decrease in the volume of sales and trend shift from profit to loss denotes its
operational inefficiency.

Table 13.0
Common size Income Statement of Chemmakadu CVCS No. 300
for the year ended 2014 -15

Particulars Rs. %

Sales 924,554.00 100.00

Less Cost of Goods sold 1,016,437.50 109.94
Gross profit/loss (91,883.50) (9.94)
Less: Admin.expenses 93,368.00 10.10
Selling Expenses 18,731.00 2.03
Total Operating expenses 112,099.00 12.12
Operating Profit/loss (203,982.50) (22.06)
Add: Non-Operating income 21,200.00 2.29
Net profit/ Loss (182,782.50) (19.77)

The common size statement of the Chemmakkadu society in Kundara circle shows that in the
current year the cost of goods sold of this society was more than the sale value (109.97 per cent). The
net loss of the society for the year (2014-15) was 19.77 per cent of sales value. This society’s
performance was satisfactory as it is a functional one and succeeded in providing 203 days of
employment to 28 workers, led to the generation of 5684 labour days.
 191

Table 14.0
Comparative Income Statement of Ayanivelikulangara CVCS No. 497
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 480,944.00 143,004.00 (337,940.00) (70.27)
Less: Cost of Goods sold 578,687.00 238,921.90 (339,765.10) (58.71)
Gross profit/loss (97,743.00) (95,917.90) 1,825.10 1.87
Less: Admin.expenses 279,936.00 151,248.00 (128,688.00) (45.97)
Selling Expenses 0.00 0.00 0.00 0.00
Total Operating expenses 279,936.00 151,248.00 (128,688.00) (45.97)
Operating Profit/loss (377,679.00) (247,165.90) 130,513.10 34.56
Add: Non-Operating income 0.00 0.00 0.00 0.00
Net profit/ Loss (377,679.00) (247,165.90) 130,513.10 34.56

The statement reveals that the amount of gross loss was more or less same to the society when
compared to previous year. The gross loss decreased only to a marginal extent of 1.87 per cent in 2014-
15. The result reveals that the cost of goods sold in 2014-15 was low when compared to 2013-14. It
was observed that the sales activity undertaken was low and also the cost of goods sold was reduced
(58.71 per cent) in 2014-15 more than proportionate to the decrease in sales value (70.27 per cent).
The decrease in gross loss is the result of reduction in sales and cost of goods sold for the current year.

Table 15.0
Comparative Income Statement of Clappana North CVCS No. 431
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 549,840.00 1,777,551.00 1,227,711.00 223.29
Less: Cost of Goods sold 601,423.00 1,467,974.00 866,551.00 144.08
Gross profit/loss (51,583.00) 309,577.00 361,160.00 700.15
Less: Admin.expenses 84,731.00 135,343.00 50,612.00 59.73
Selling Expenses 13,890.00 53,750.00 39,860.00 286.97
Total Operating expenses 98,621.00 189,093.00 90,472.00 91.74
Operating Profit/loss (150,204.00) 120,484.00 270,688.00 180.21
Add: Non-Operating income 19,166.00 14,718.00 (4,448.00) (23.21)
Net profit/ Loss (131,038.00) 135,202.00 266,240.00 203.18
 192

The statement of analysis reveals that there is an increase in the sales value (223.29 percent) as
compared to 2013-14. The trend of gross profit of the society also shows a remarkable increase (700.15
percent) (2014-15) from gross loss in 2013-14. The results of operating profit and net profit were also
increased in tune with the increase in the sales value to the level of 180.21 per cent and 203.18 per cent
respectively. The remarkable increase in the profitability of the society was due to mechanization,
managerial efficiency and dedication on the part of the workers. It is interesting to note that the society
was a loss making one in the previous year, which was transformed as a profit making one. This incident
was a note worthy one to be highlighted as a model .It is decided to examine the history of society as a
case study to identify the factors behind the success story.

Table 16.0
Comparative Income Statement of Karunagapally CVCS No. 3067
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 118,459.00 134,385.00 15,926.00 13.44
Less: Cost of Goods sold 77,250.00 86,100.00 8,850.00 11.46
Gross profit/loss 41,209.00 48,285.00 7,076.00 17.17
Less: Admin.expenses 46,256.00 39,001.00 (7,255.00) (15.68)
Selling Expenses 90,457.00 110,337.00 19,880.00 21.98
Total Operating expenses 136,713.00 149,338.00 12,625.00 9.23
Operating Profit/loss (95,504.00) (101,053.00) (5,549.00) 5.81
Add: Non-Operating income 0.00 0.00 0.00 0
Net profit/ Loss (95,504.00) (101,053.00) (5,549.00) 5.81

The comparative income statement CVCS of Karunagapally reveals that there is an increase in gross
profit and net loss for the year 2014-15. The increase in gross profit as well as the increase in net loss in
the present year was the result of the proportionate change in the sales volume and operating expenses.
The analysis result shows that the administrative expense, decreased and selling expense increased in
the current year. The increase in the selling expense was due to the increase in the volume of sales.

Table 17.0
Comparative Income Statement of Kattilkadavu CVCS No. 389
for the year ended 2014 and 2015
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 118,459.00 90,504.00 (27,955.00) (23.60)
Less: Cost of Goods sold 77,250.00 123,931.00 46,681.00 60.43
Gross profit/loss 41,209.00 (33,427.00) (74,636.00) (181.12)
Less: Admin.expenses 46,256.00 183,663.00 137,407.00 297.06
Selling Expenses 90,457.00 0.00 (90,457.00) (100.00)
Total Operating expenses 136,713.00 183,663.00 46,950.00 34.34
Operating Profit/loss (95,504.00) (217,090.00) (121,586.00) 127.31
Add: Non-Operating income 0.00 1,359.00 1,359.00 0
Net profit/ Loss (95,504.00) (215,731.00) (120,227.00) 125.89
 193

The analysis shows that the sales activities has decreased (23.60 per cent) in the current year as
compared to previous year 2013-14. The cost of goods sold in the present year shows an increasing
trend (60.43 per cent) as compared to the previous year. This result has led to a reduction in gross
profit (181.12 per cent) for the current year (2014-15). The net loss of the society has also increased in
the current year as compared to previous year 2013-14 due to increase in the adminstrative expenses.
Table 18.0
Common size Income Statement of Kozhikode CVCS No. 74
for the year ended 2014-15

Particulars Value Rs. %

Sales 39,375.00 100.00

Less: Cost of Goods sold 47,867.00 121.57
Gross profit/loss (8,492.00) (21.57)
Less: Admin.expenses 143,726.00 365.02
Selling Expenses 3,000.00 7.62
Total Operating expenses 146,726.00 372.64
Operating Profit/loss (155,218.00) (394.20)
Add: Non-Operating income 0.00 0.00
Net profit/ Loss (155,218.00) (394.20)

The volume of administrative expense is the major contributor here to the mounting volume of
loss. The volume of loss has increased to four times of the volume of sales.
The common size statement shows that the gross loss of the society was 21.57 per cent of sales.
The net profit of the society was 394.20 per cent of sales value. The analysis reveals that this society was
a non functional one because the volume of sales is marginal. An interesting factor to note here that the
loss made by the society exceeds the total volume of revenue generated from sales. This means that
even after payment of the entire revenue towards the expenses still they remain some surplus
expenditure to be paid off. It is doubtful and logical to make efforts to revive the defunct unit alive.

Table 19.0
Comparative Income Statement of Maruthurkulangara North CVCS No. 474
for the year ended 2014 and 2015
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 463,595.00 301,905.00 (161,690.00) (34.88)
Less: Cost of Goods sold 563,180.00 445,157.00 (118,023.00) (20.96)
Gross profit/loss (99,585.00) (143,252.00) (43,667.00) 43.85
Less: Admin.expenses 156,395.00 121,985.00 (34,410.00) (22.00)
Selling Expenses 19,854.00 16,043.00 (3,811.00) (19.20)
Total Operating expenses 176,249.00 138,028.00 (38,221.00) (21.69)
Operating Profit/loss (275,834.00) (281,280.00) (5,446.00) 1.97
Add: Non-Operating income 4,429.00 1,952.00 (2,477.00) (55.93)
Net profit/ Loss (271,405.00) (279,328.00) (7,923.00) 2.92
 194

The comparative income statement analysis reveals that both sales (34.88 per cent) and cost of
goods sold (20.96 per cent) of the society has decreased in the current year (2014-15) as compared to
the previous year. The society is running at a loss and all other operating expenses are proportinately
decreased (1.97 per cent) in relation to reduction in the sales value. This society is functionary one as it
has provided more number of working days (1320 in the current year) to the workers.

Table 20.0
Comparative Income Statement of Pallikadavu CVCS No. 844
for the year ended 2014 and 2015
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 637,544.00 1,073,484.00 435,940.00 68.38
Less: Cost of Goods sold 576,113.00 963,149.00 387,036.00 67.18
Gross profit/loss 61,431.00 110,335.00 48,904.00 79.61
Less: Admin expenses 141,993.00 158,747.00 16,754.00 11.80
Selling Expenses 9,185.00 111,352.00 102,167.00 1112.32
Total Operating expenses 151,178.00 270,099.00 118,921.00 78.66
Operating Profit/loss (89,747.00) (159,764.00) (70,017.00) 78.02
Add: Non-Operating income 66,061.00 19,126.00 (46,935.00) (71.05)
Net profit/ Loss (23,686.00) (140,638.00) (116,952.00) 493.76
The result of the analysis reveals that this society has made gross profit for the past two years.
For the current year gross profit has increased to 79.61 per cent as a result of increase in sales value
(68.38 per cent). The total operating expenses for the current year increased to 78.66 per cent as
compared to previous year (2013-14). The increase in the net loss of the society for the current year
was due to the increase in the volume of operations. This society has generated 4144 labour days in the
current year and ranked as second in this regard, among the societies in Karunagapally circle. The
increase in the volume of sales of the society is 68.38 percent and the increase in the volume of loss
493.76 percent. The increase in loss as compared to the increase in the volume of sales is alarming.

Table 21.0
Comparative Income Statement of Prayar South CVCS No. 547
for the year ended 2014 and 2015
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 391,703.00 161,400.00 (230,303.00) (58.80)
Less: Cost of Goods sold 303,396.00 188,039.00 (115,357.00) (38.02)
Gross profit/loss 88,307.00 (26,639.00) (114,946.00) (130.17)
Less: Admin.expenses 211,848.00 79,621.00 (132,227.00) (62.42)
Selling Expenses 86,300.00 7,000.00 (79,300.00) (91.89)
Total Operating expenses 298,148.00 86,621.00 (211,527.00) (70.95)
Operating Profit/loss (209,841.00) (113,260.00) 96,581.00 (46.03)
Add: Non-Operating income 21,897.00 0.00 (21,897.00) (100.00)
Net profit/ Loss (187,944.00) (113,260.00) 74,684.00 (39.74)
 195

The result of analysis shows that this society has made a gross loss in 2014-15 and gross profit in
2013-14. The current year’s gross loss was the result of changes sales value as compared to previous
year 2013-14. The percentage of cost of goods sold (38.02 per cent) and sales value were decreased
(58.80 per cent) in the current year when compared to the sales value was decreased cost of goods sold
and sales value of the previous year. There was decrease in the volume of net loss (39.74%) for the
current year. This was due to the reduction in the volume of operation of the society. The labour days
generated by this society (432) was nominal. This society is a dysfunctional one.

Table 22.0
Comparative Income Statement of Puthumannelkadavu CVCS No. 874
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 817,831.00 625,350.00 (192,481.00) (23.54)
Less: Cost of Goods sold 786,863.00 709,295.00 (77,568.00) (9.86)
Gross profit/loss 30,968.00 (83,945.00) (114,913.00) (371.07)
Less: Admin.expenses 77,051.00 141,615.00 64,564.00 83.79
Selling Expenses 0.00 0.00 0.00 0
Total Operating expenses 77,051.00 141,615.00 64,564.00 83.79
Operating Profit/loss (46,083.00) (225,560.00) (179,477.00) 389.46
Add: Non-Operating income 31,468.00 81,390.00 49,922.00 158.64
Net profit/ Loss (14,615.00) (144,170.00) (129,555.00) 886.45

The comparative income statement anlalysis reveals that this society has generated gross profit in 2013-
14 and gross loss in 2014-15. The current year’s sales value (23.54 percent) decreased when compared
to previous year .This has resulted to an enormous increase in gross loss of 371.07% in 2014-15. There
is also an increase in the operating expenses of the society (83.79 per cent) .The total number of labour
days generated by this society is (2646) ,for the current year which denotes its operational efficiency.
The increase in the volume of net loss (9 times) is unjustifiable. It is better to close this type of units
rather than taking steps to revive it. The percentage of administrative expense to sales loan comes 23
percent. That is more than 1/5th of the sales revenue (unrealistic).
 196

Table 23.0
Comparative Income Statement of Thurayilkunnu CVCS No. 327
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 512,275.00 274,809.00 (237,466.00) (46.36)
Less: Cost of Goods sold 627,633.50 405,222.00 (222,411.50) (35.44)
Gross profit/loss (115,358.50) (130,413.00) (15,054.50) 13.05
Less: Admin.expenses 0.00 0.00 0.00 0
Selling Expenses 12,700.00 10,860.00 (1,840.00) (14.49)
Total Operating expenses 12,700.00 10,860.00 (1,840.00) (14.49)
Operating Profit/loss (128,058.50) (141,273.00) (13,214.50) 10.32
Add: Non-Operating income 0.00 0.00 0.00 0
Net profit/ Loss (128,058.50) (141,273.00) (13,214.50) 10.32

The result of analysis shows that gross loss of the society has increased (13.05 per cent) in the
current year and the operating loss of the society also increased proportionately (10.32 per cent) in the
present year. Even though there is a decrease in the sales volume the net loss increased to the extent of
10.32 percent.

Table 24.0
Comparative Income Statement of Vazhakoottathil kadavu CVCS No. 642
for the year ended 2014 and 2015

Net Increase/ Decrease

Particulars 2013-14 2014-15
%
Sales 544,360.00 616,036.00 71,676.00 13.17
Less: Cost of Goods sold 691,441.80 709,912.00 18,470.20 2.67
Gross profit/loss (147,081.80) (93,876.00) 53,205.80 (36.17)
Less: Admin.expenses 198,114.00 229,728.00 31,614.00 15.96
Selling Expenses 8,990.00 9,833.00 843.00 9.38
Total Operating expenses 207,104.00 239,561.00 32,457.00 15.67
Operating Profit/loss (354,185.80) (333,437.00) 20,748.80 (5.86)
Add: Non-Operating income 5,157.25 13,563.25 8,406.00 162.99
Net profit/Loss (349,028.55) (319,873.75) 29,154.80 (8.35)
 197

Table No. 25
Comparative Income Statement of Alappad Mannelkadavu CVCS No. 868
for the year ended 2014 and 2015
Net Increase/ Decrease
Particulars 2013-14 2014-15
%
Sales 742,689.00 181,196.00 (561,493.00) (75.60)
Less: Cost of Goods sold 752,562.00 285,009.80 (467,552.20) (62.13)
Gross profit/loss (9,873.00) (103,813.80) (93,940.80) 951.49
Less: Admin.expenses 160,103.00 162,938.00 2,835.00 1.77
Selling Expenses 3,620.00 0.00 (3,620.00) (100.00)
Total Operating expenses 163,723.00 162,938.00 (785.00) (0.48)
Operating Profit/loss (173,596.00) (266,751.80) (93,155.80) 53.66

Add: Non-Operating income 5,501.00 6,500.00 999.00 18.16

Net profit/ Loss (168,095.00) (260,251.80) (92,156.80) 54.82

The analysis of income statement shows that society’s net loss in 2013-14 was
-168095 and -260251.8 in 2014-15. This shows the increase in the net loss per
cent (54.82 per cent) in 2014-15. The sales activities are decreased (75.6 per cent) in
the current year when compared to previous year 2013-14. Here also, it is observed
that loss phobia discouraged the management to follow the policy of minimum level of
operation.