Industrial Potential Survey Report - Erode

INDUSTRIAL POTENTIAL SURVEY REPORT - ERODE about:reader?url=https%3A%2F%2Fdcmsme.gov.in%2Fpublications%...
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INDUSTRIAL POTENTIAL SURVEY

REPORT - ERODE
34–43 minutes
CHAPTER IV
EXISTING INDUSTRIAL SCENARIO - A REVIEW
Erode district is one of the most industrialised in the state of

Tamilnadu. Industry and Trade occupy a place of prominence in the
economy of the District. Industries that flourished in early days in
and around Erode area were Handlooms weaving and carpet
manufacturing. The advent of modern era has changed these
industries to some extent and the powerloom weaving is slowly
replacing it. Erode District is predominantly agricultural in nature is
emerging gradually and steadily in food products and beverages
sector.
Erode District is occupying 5th place in Small Scale Industries next

to Coimbatore, Chennai, Salem and Kancheepuram Districts. The
district is having 23918 Registered SSI units as on 31.03.2000. The
share of SSI units in Tamilnadu State is about 5.9%.
Same of the important industries in this district are listed below.
i. Cotton Textiles Industry
ii. Edible Oil Mills
iii. Rice Mills
iv. Other Food Product Industries
v. Leather Products
vi. Non Metallic - Mineral Products
Cotton Textiles
Textile industry is the oldest and one of the biggest industries in the
district. It provides large scale employment and is a source of
foreign exchange earner. Textile industry has developed in all the
three segments namely mill sector, handloom and powerloom in
this district.
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a. Mill Sector
The units in this sector mainly spinning oriented. Out of the 47 units
in the medium and large scale sector, 36 units are coming under
spinning sector, one unit is a composite unit, 7 units are engaged in
textile processing activities like bleaching, dyeing, calendering,
mercerising, printing etc, and two units are coming under knitting
activities. Besides these, there are number of powerloom and
handloom units functioning in this district.
The profit in the spinning mills has been declining since 1990.
According to SITRA, the net profit in the first half of the 90s has
averaged about 2% of sales and between 1999 and 1998, the mills
have incurred a loss of about 3% due to steep increase in the input
cost namely cotton, power, interest and overheads without any
commensurate increase in yarn selling prices. Hence, nearly 60%
of the units are in the red.
Textiles account for one fifth of the country’s industrial production,

7% of the GDP and 30% of its exports. India is the largest exporter
of cotton yarn and 3rd largest producer of cotton. Textile export are
the largest foreign exchange earner for the nation, with the exports
crossing the 10 billion mark even in 1997-98. However, due to
competition both within and global, despite the rise in exports, the
unit realisation and margins have been eroded. The industry has
attained unplanned growth with excess spinning capacity and
without the Technological Upgradation in all the sectors.
b. Handlooms
Handloom industry is the traditional industry in Tamilnadu providing
employment to 10 lakh persons. In Erode district, there are a
number of villages wherein the handloom sector tends to
concentrate as indicated below.
Handloom Focal centres and their location
Name of the Taluk Focal Centre
Erode Erode, Sivagiri, Avalpoondurai
Perundurai Chennimalai, Vijayamangalam
Gobi Gobi, Athani, Kanakkampalayam
Sathyamangalam Doddampalayam, Kodiveri

Arasur, Dasppagoundanpudur
Kangayam Kangayam, Vellakoil
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Bhavani Bhavani, Anthiyur, Thavittupalayam
There are 48833 handlooms in this district as per 1995 census in

this district. Total number of persons engaged in this sector is
32,418. There are 220 Nos. of weavers Cooperative Societies
functioning in this district.
Production particulars of the handloom in cooperative focal for the

past three year are given below.
HANDLOOM PRODUCTION PARTICULARS
S.No Name of the 1997-98 1998-99 1999-2000

Product
Metre Value Metre Value Metre Value
in Rs in In Rs in In Rs in
lakhs Lakhs lakhs lakhs lakhs lakhs
1 Bedsheet 54.34 2779.63 52.23 2758.36 48.93 2851.55
2 Towels 40.49 947.84 36.30 949.97 32.47 890.19
3 Carpets 27.13 1244.07 22.55 1252.20 21.65 1265.78
4 Pillowcovers 2.27 97.53 2.41 106.18 2.77 125.63
5 Sarees 14.14 762.64 16.47 1066.25 15.05 1028.09
6 Polyester 1.42 75.17 2.87 160.12 2.05 110.36
7 Govt.scheme 13.86 363.70 11.37 313.00 7.95 247.81
8 Others 99.55 4711.97 101.50 3513.39 107.67 5081.02
Total 253.20 10982.55 245.70 10119.47 238.54 11600.43
During 1999-2000 this district has produced 238.54 lakhs metres of

handloom products worth of Rs.116 crores in cooperative fold.
Export of Handloom Products
Handloom weavers Cooperative Societies are exporting their

products outside the country and contributing foreign currency
earnings to our country from 1999 - 2000. The type of products
exported are Bedspreads, Bed Covers, Screen Cloth, Table Cloth,
Table Mat and Towels. The details of the export is given below.
Year Export
Quantity Value
Metres in lakhs) (Rs.in lakhs)
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1999-2000 38.82 1850.00
2000-2001 119.44 6363.84

(upto February)
To develop this sector both Central & State Government are

implementing various schemes through the office of the Assistant
Director (Handloom & Textiles) at Erode. The schemes are
i. Handloom Development Centre
ii. Project Package Scheme
iii. Help Package Scheme
iv. Housing scheme for weavers
v. Export Package scheme
c. Powerlooms
Powerloom sector plays a major role in the country. The quantum of
production of fabrics in the powerloom sector works out to 57% of
the overall production. The powerloom industry provides one of the
basic necessities of life. But the most significant contribution is that
it provides employment to more than 75 lakhs workers in our
country. As the powerloom units are situated mostly in semi urban
and rural areas, it contributes substantially to the growth of the
economy in those areas.
The industry is endowed with availability of raw cotton and the raw
materials indigenously, in adequate quantity at reasonable cost.
Labour is available at lower wages. Overhead costs of the unit are
relatively lower. The industry is in a position to offer products at
competitive rates as compared to the mill products. These are
essentially strength of the industry.
The productivity of the industry is lower. Quality of the products

manufactured in most cases is not up to the international standard.
Marketing structure is weak and therefore find it difficult to sell the
products effectively. These are basically the weakness of the
industry, which has prevented the industry from achieving its full
market potential.
A major draw back is that the industry has not been modernised
adequately. The machinery installed is obsolete, which needs
replacement immediately. The technology employed in the industry
for manufacture of textiles is outdated, resulting in increased cost
and lack of sufficient demand for the products manufactured. The
immediate task is therefore upgradation and modernisation of the
textile industry at a faster pace. The need for immediate
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modernisations of the industry arises from the fact that by the end
of 2004, quota restriction imposed by certain developed countries
like USA & European Union, will be completely phased out.
In the post quota regime, i.e. from 2005 onwards, there will be
intense competion from the supplying countries to increase the
respective market shares. In such a situation, only those countries,
which have products qualitatively superior and are in a position to
offer products at competitive rates will survive. The need for
undertaking modernisation at faster pace is therefore assumes
greater importance.
The Government has introduced the Technology Upgratation Fund

Scheme (TUFS) for undertaking modernisation, which is not only
timely, but also very much needed. What is required is that various
provisions of the TUF scheme needs to be modified to meet the
requirement of powerloom textile industry.
In Erode district there are 39,212 powerlooms as per census in the

year 1999. The major powerloom cluster in the district is at Vellakoil
in Kangayam Taluk. Nearly one third of the units are functioning
here. The powerloom units in this district are mostly in urorganised
sector. Most of them are running the units on job work basis, by
production of grey cloth, bedsheets etc. to the master weavers &
traders.
Details of Powerloom in Erode District
Sl.NO Details Year Year Year

1997-98 1998-99 1999-2000
1 No.of powerloom in the 39212 39212 39212

district
(as per 1995 census)
2 Total No. of persons 6867 6867 6867

engaged
3 No.of Powerloom Weavers 10 13 13

Coop Soceity
Source: Asst.Director, Handloom & Textiles, Erode
There are 13 weavers Cooperative Societies functioning in this

district. The production particulars of powerloom in this Cooperative
sector is given below.
Powerloom Production in Coop. Sector - Erode District
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Sl.No Year Production
Quantity Value
(Metres in Lakhs) Rs. In lakhs)
1 1997-98 213.20 1286.84
2 1998-99 124.67 1656.49
3 1999-2000 96.97 1191.31
The above particulars are the production of sarees & dhoties,

ordered by Government of Tamilnadu for free distribution system.
It is distress to note that the utilisation of funds under TUF scheme

in Erode District is almost Nil, though the scheme is in operation
from 1st April 1999. Due to the Nil utilisation of funds under TUF
and the importance of modernisation in textile industry, SISI,
Chennai has organised an one day “Awareness Programme of TUF
scheme” at Erode, in association with District Industries Centre,
Erode and Erode District SSI Association. Shri Karuthiah Pandian,
District Collector, inaugurated the programme. Officers from SISI,
DIC, SIDBI, Regional Textile Commissioner’s Office Lead Bank of
the District (Canara Bank) and eminent persons from the industry
addressed to the participants. 100 persons participated in this
programme. Doubts, clarifications raised by the entrepreneurs of
textile industries about TUF scheme have been clarified by the
AGM, SIDBI & Deputy Director, Office of the Textile Commissioner.
At the end of the meeting a questionnaire has been distributed to
the participants and their views on TUF scheme has been collected
from them. The details of their response are given in the annexure.
Exports of Cotton Powerloom Textiles from India
Exports of cotton powerloom textiles have achieved a growth rate

of 2.80% in terms of US dollars and 5.92% in terms of rupees in
1999-2000, as compared to the previous year. The levels of exports
in respect of powerloom textiles are given below.
(Figures in Million)
Financial Unit Cotton Cotton made- Total

Year fabrics ups
1997-1998 Rs 21908.25 23290.68 45198.93
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Us 587.67 624.75 1212.42

$
1998-1999 Rs 22846.59 26043.92 48890.51
Us 543.19 619.21 1162.40

$
1999-2000 Rs 23381.32 28405.05 51786.37
Us 539.49 655.40 1194.89

$
Source : Powerloom Development & Export Promotion Council,

Erode.
Entrepreneurs from Erode District are directly and indirectly

exporting their powerloom products. The figures of Erode district is
not available and hence it is not furnished.
As cotton powerloom textiles have considerable export potential, it

is possible to develop export substantially by a wider margin
provided adequate measures are taken to remove constraints to
provide adequate benefits and facilities for developing exports.
Major markets for cotton textiles (including cotton yarn) are the
countries U.S.A., Hongkong, Bangladesh, U.K., Germany, Italy,
Korea Republic, Japan, Mauritius, Belgium and U.A.E.
Textile Processing
It is needless to emphasize the importance of processing units in

the development of textile sector. Textile processing units are
concentrated in the banks of River Cauveri & Bhavani in Erode &
Bhavani Taluks. There are 7 modern & mechanised textile
processing mills in medium & large scale sector, about 30 semi
mechanised processing units and around 1200 numbers of
manually processing tiny sector units in this district. These units are
engaged in dyeing of yarn, cloth and printing on fabrics. These are
providing employment to 18000 persons approximately.
The main problem of the tiny units engaged in dyeing are pollution
and effluent disposal problem. Two common effluent treatment
plants are yet to function. The concept of CETP is not worked out
well in this district due to wide dispersal of units. Hence these units
are establishing separate effluent treatment plant on their own.
These units are not modernised and using the obsolete machinery.
Considering the cost of modernisation, huge investment, the cost of
production is high for tiny units due to less volume of business &
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heavy competition. The dyeing and printing units are working on job
order basis for the fabric & garment manufactures. The main
products from the printing units are sarees and lungies. Apart from
this, Bed spreads, Pillow covers and Printing on Hosiery cloth are
also done here.
Readymade Garments
Readymade garments units are developing at faster rate.

Readymade garments using woven fabric include a very wide
range of ready to wear clothing items like shirts, trousers, frocks,
jackets, skirts, sport wears, uniforms etc. Inner garments like
petticoats are manufactured here. Most of the units are concentrate
in Erode Taluk. About 100 units are engaged in production of shirts,
trousers, 25 units are producing uniform and specialised wears
ordered by the customers. Approximately 50 units are producing
petticoats. Most of the these units are producing for domestic
market. Very few only directly and indirectly exporting. Other than
these a lot of units are engaged in production of garments on job
basis and tailoring units. The opportunities in the local & export
markets are not exploited so far. There is a good scope for
readymade garments units as this district is having enormous
capacity in producing fabrics in powerloom sector.
Edible Oil Mills
Edible oils like Gingelly Oil, Coconut Oil, Groundnut Oil, Sunflower
Oil, Refined oil are the one and important among the food products
units. There are about 494 edible oil mills are in this district. The
main area of concentration for Gingelly Oil units are Erode &
Vellokoil. Groundnut oil & Refineries are concentrated in Erode,
Perundurai Taluks. Coconut oil units are concentrated in Kangayam
Taluk. These units are facing heavy competition from imports,
especially cheap imports of Palmoil & Refined palmolein. The
imported edible oil are sold at cheaper rates affected the local oil
mills. Considering the comparatively higher cost of edible oils like
groundnut oil, gingelly oil & coconut oil people prefer the imported
oil, which is available at lower rates. The imported oil penetrated
the market deeply upto the rural outlets. These created the lower
productivity of existing oil mills. Some of the Groundnut oil &
Refineries were closed due to the above problem. In Gingelly oil
manufacturing units the problems are not that much deeper like
Groundnut oil units. However, Gingelly oil units are also suffering
due to lower price realised in the market.
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Regarding coconut oil manufacturing units there are 150 units

concentrated in and around Kangayam. Also 500 kopra processing,
drying units are at Kangayam Taluk. These units are also having
problems from 1999-2000. Consequent to the partial removal of
Quantitative Restrictions (QR), the prices of kopra slashed down
upto Rs.20/- per kg due to import of kopra. Government took
necessary measures to stop the import of kopra. However there is
no improvement in the market. Government intervened in the
market and fixed the minimum support price of kopra at Rs.30/- per
kg and directly procured from the farmers during 1999-2000. Now
the Government is selling the procured kopra which adds another
dimension of problem to the kopra producers, who are realising low
price. The prices of coconut oil also slashed. The import of Palm oil
affected the industries. Traditional consumers like Keralites
preferring palm oil to coconut oil to various reasons like price,
cholesterol content etc. & industrial users like Vanaspathi
manufacturing units, Soap Manufacturing units prefer the cheaper
imported oil. All these made coconut oil prices cheaper and the
production is in decreasing trend. This leads to lower capacity
utilisation and the units are incurring loss.
The entrepreneurs are expecting the Government to take suitable

actions to curtail the import for the survival of the existing units.
Timely action is necessary to save the edible oil industry. The
problem in the edible oil industry directly affects the farmers, who
are the suppliers of raw material. If the same trend is continued
farmers may shift their cultivation from oil seeds to alternative
crops.
Rice Mills
Rice Mills are another important industry among the food products.
The mills are concentrated at Kangayam, Kodumudi, Modakurichi,
Gobichettipalayam, Uthukuli blocks. There are about 834 Rice mills
functioning in the District. Among them about 500 Rice mills are
functioning in Kangayam Taluk itself. Though the district is
producing Paddy around 311865 tonnes it is not sufficient to feed all
the mills. The entrepreneurs are sourcing their raw materials i.e.
Paddy from the
neighboring state Karnataka. Though there are some modern rice

mills in this district still there is a need for quality improvement. The
association felt to improve the quality by employing latest
technology, which is available abroad. In the marketing side though
they are having a good market set up throughout the state, they are
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not allowed to sell outside the state, as per Government policy. The
units may be allowed to sell their products outside the state, like
procuring the raw materials from outside the state. This will help the
units to get better price and better profit in the way of increased
turnover.
Dairy Products
Erode district is leading in dairy sector. The district is traditionally

well known for the dairy products likes milk, curd, butter and ghee.
As far as the procurement of milk by the Cooperative sector is
concerned it stands 3rd place next to undivided Salem (Salem &
Namakkal) district and North Arcot (Vellore & Tiruvannamalai)
districts. Erode district cooperative milk producer union is
functioning at Chitthode and is procuring the milk from farmers
through the Cooperative milk producers societies spread over the
district. In private sector Nilgiris Dairy also procuring milk and
producing dairy products. Also a lot of small units are engaged in
this sector. The production details from the cooperative sector is
given below.
MILK PROCUREMENT DETAILS
Year Quantity Value

(in Lakh litres) (Rupees in lakhs)
1996-1997 454.3 3153.3
1997-1998 505.0 3798.4
1998-1999 624.7 5575.4
1999-2000 716.4 6376.9
It is seen from the above table that procurement of milk is steadily

increasing year after year. It was 454.3 lakh ltrs during 1996-97 and
it was 716.4 lakh liters during 1999-2000, percentage of increase
over the year 1996-97 was 57.7%. It is due to the better price
10 of 25 3/13/2024, 8:40 AM
offered by the Cooperative sector.
The cooperative sector has 3 milk chilling centres in this district.

The details are given below.
Sl.No Location of the chilling centre Installed capacity
1 Sankarandampalayam 50,000 lrs / day
2 Sathyamangalam 30,000 lrs / day
3 Thalavady 5,000 lrs / day
Besides these, the cooperative sector is having one milk powder

producing unit called Feeder Balancing dairy at Chithode. The
installed capacity of the unit is of intake 3 lakh litres per day and the
production of Milk Powder 40 Tonnes per day, butter 12 Tonnes per
day and Ghee 12 Tonnes per day. It is one of the biggest unit in
Southern India with an aim to convert the excess milk into milk
products in this region. The details of the Dairy Products pertaining
to Erode District in the cooperative sector is given below.
Details of Dairy Products
Sl.No Name of the Production (Quantity in Tonnes)

Product
1996-97 1997-98 1998-99 1999-2000
1 Butter 1208 1210 2046 2776
2 Ghee 556 398 808 930
3 Milk Powder 116 71 623 2200
Apart from this the cooperative sector introduced the products like
Dairy Whitener, buttermilk etc during this year. They are having a
plan to introduce Rose Milk and Ice Cream in the coming years.
The cooperative fold is facing heavy competition from imported milk
powder.
SMALL SCALE INDUSTRIES IN ERODE DISTRICT
Erode district is one among the industrialised district in Tamilnadu

and it is fifth among the districts in Tamilnadu as far as Small Scale
Industries concerned. There are 23918 registered SSI units as on
31.3.2000 in the district. Cotton Textiles industry dominates the
district at present. It accounts for 20.60% of the registered SSI units
in the district. Next comes to Hosiery & Readymade Garments
industry, which is accounting for 17.43% followed by food products
with 11.98%
Small Scale Industries are providing large-scale employment next
11 of 25 3/13/2024, 8:40 AM
to Agriculture in this district. It have played a vital role in the districts

economy by providing large scale employment opportunities at
relatively low capital cost, a wide entrepreneurial base, easy
dispersal of industries in rural areas and backward areas and
concentration of certain industrial groups at specific areas.
The relative position of the district in the state in terms of registered

SSI units as on 31.3.2000 is given below.
The district stands first for the highest number of units in
i. Beverages
ii. Jute, Hemp & Mesta Textile Products
It stands second in the following sectors.
i. Food Products
ii. Cotton Textiles
It stands fourth in
iii. Basic Metal Products
Area of Concentration
The following table shows that different type of industries and their
area of concentration. It may be seen that food products are
concentrated at Erode, Perundurai & Kangayam, beverages are
concentrated in all the 3 blocks of Erode Taluk namely,
Modakurichi, Erode & Kodumudi. Cotton Textiles and Readymade
Garments are concentrate in Erode Taluk. Erode Taluk is also
having the maximum number of industries in Leather & Leather
Products, Non metallic mineral products apart from Food Products.
Next to Erode, Perundurai taluk stands second in Food Products,
Cotton Textiles, Chemical & Chemical Products and Transport
Equipments.
Concentration of SSI Units in Erode District - as on 31.3.3000
Ind. Name of No.of Regd Registered %

Code Industry SSI Units SSI growth
as on 31.3.91 Units as on during
31.3.2000 the
period
No. % to No. of % to
of the units the
units total total
20-21 Food Products 1051 16.9 2865 12.0 172.6
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22 Beverages 138 2.2 645 2.7 367.3
23 Cotton Textiles 1544 24.8 4928 20.6 219.2
24 Wool, Silk & 37 0.6 220 0.9 494.6

Synthetic Fibre
25 Jute, Hemp and -- -- 118 0.5 --

Mesta Products
26 Hosiery & 421 6.8 4168 17.4 890.0

Readymade
Garments
27 Wooe and 145 2.3 686 2.9 373.1

Wood Products
28 Paper & Paper 305 4.9 945 4.0 209.8

Products
29 Leather & 408 6.6 829 3.5 103.2

Leather
Products
30 Rubber & 167 2.7 328 1.4 9 6.4

Rubber
Products
31 Chemical & 171 2.7 779 3.2 355.6

Chemical
Products
32 Non-Metallic/ 258 4.2 624 2.6 141.9

Mineral
Products
33-35 Basic Metails, 807 13.0 1877 7.8 132.6

Metal Products
etc
36 Electrical 228 3.7 793 3.3 247.8

Machinery &
Apparatus
37 Transport 152 2.4 1008 4.2 563.2

Equipment &
Parts
38 Other Mfg. 383 6.2 3105 13.0 710.7

Industries
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Total 6215 100.0 23918 100.0 284.8
The small scale sector has registered a significant growth during

the last 10 years. It has achieved 285% of overall growth. Hosiery &
Readymade garments sector has achieved a highest growth of
890% followed by Transport Equipment & Parts by 563%. Wool,
Silk & Synthetic fibre industries achieved an impressive growth of
495%, Wood and Wood Products by 373% and Beverages units
achieved a growth rate of 367%.
The total number of registered SSI units has increased from 645 in
1990-91 to 23918 in 1999-2000. Almost all the sectors are
registered a growth rate of more than 100% except Rubber &
Rubber Products which shows the growth of 96%. The period 1990
to 2000 is a milestone in Erode District for the growth of SSI units.
Small Scale Service & Business Enterprises
Like the SSI sector the SSSBE sector has also grown considerably
in this district. There are 6165 registered SSSBE units as on
31.3.2000 in this district. Group wise number of units in this
segment are given below.
SSSBE Units as on 31.03.2000
Group Code(Two Group Name Number of

Digit) Units
50 Digging of Bore-wells --
51 Painting & Decorating 165
74 Storage & Ware Housing 42
76 Communication 90
82 Data Processing 425
93 Medical & Health Service --
96 Personal Services 265
97 Repair & Servicing 3632
99 Services not elsewhere 1546

classified
Total 6165
DISPERSAL OF SSI UNITS
The notable feature of the SSI sector is its easy dispersal in wide
14 of 25 3/13/2024, 8:40 AM
areas including backward areas. In Erode district, the SSI units

spread all over the district even though concentration of the units
can be seen in some of the places. While Erode Taluk alone having
41.5% share of SSI units, the surrounding taluks Perundurai,
Bhavani & Kangayam is having the share of 17.4%, 11.0%, &
10.3% respectively. It can be seen that all of the above four taluks
namely, Erode, Perundurai, Bhavani & Kangayam altogether having
a share of 80.2% of the total SSI units. The remaining three taluks
are having only 19.8%. The blocks like Thalavadi, Bhavani Sagar
and Kundadam are having the SSI units less than one percent i.e
0.5%, 0.9%, 0.9% respectively.
INVESTMENT LEVEL & EMPLOYMENT - TALUK LEVEL
The total investment in plant & machinery in the SSI sector in Erode
District is Rs.46868.26 lakhs as on 31.3.2000. The average
investment in plant & machinery per unit is estimated around 1.96
lakhs. Total employment generated directly by the registered SSI
units in this district is 99850 persons, which works out an average
of 4 persons, during 1999 - 2000.
Employment Generated & Investment in SSI Sector

As on 31.3.2000 - Taluk Level
Sl.No Name of the Number Investment Employment

Taluk of in
Units Plant and
Machinery
As on
March 2000
Rs.in lakh
1 Erode 9923 15184.23 39787
2 Perundurai 4169 9461.60 20861
3 Gobi 2232 4628.53 8194
4 Sathyamangalam 1098 2564.89 4840
5 Kangayam 2466 8226.32 12914
6 Bhavani 2628 3548.49 3311
7 Dharapuram 1402 3254.20 9943
Total 23918 46868.26 99850
From the above table it can be seen that Erode Taluk is leading
among other taluks in terms of number of units, investment level
and employment. Erode Taluk is having 41.5% of registered SSI
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units with 32.4% of total investment level and 39.8% of employment

in the district. It is due to concentration of cotton textiles &
readymade garments units in this taluk and their easy accessibility
to the market. Next to Erode, Perundurai Taluk is having 4169
numbers. of registered SSI units with 9461.60 lakhs in investment
in plant & machinery and providing employment to 20861 person.
Kangayam Taluk is having 2466 units. The average investment in
plant & machinery is about 3.3 lakhs per unit which is the highest
among the other taluks in the district. In Dharapuram Taluk 1402
SSI units providing employment to 9943 persons at an average of 7
persons per unit which is the highest among other taluks.
Sathyamangalam Taluk is having 1098 registered SSI units, which
represents 4.6% of the district, is the lowest number of units in the
district.
FACTORY SECTOR IN ERODE DISTRICT
There are 1228 registered factories in the district. The following

table shows the number of factories in the district, product wise &
taluk wise as on 31.12.99
Factory sector in Erode District - Taluk Level
Product Number of factories as on 31.12.1999

Group
Erode Perun- Kangayam Dharapuram Sathya- Gobi Bhavani Total
durai mangalam
Food Products 114 103 100 45 11 53 11 437
Cotton textiles 175 72 52 31 56 36 35 457
Wool, Silk & -- -- -- -- -- -- 1 1

Synthetic Fibre
Jute, Hemp & 1 -- -- -- -- -- -- 1

Mesta
Hosiery & 34 19 6 3 -- 1 1 64
Readymade
Garments
Paper 18 10 2 2 4 8 3 47
Products &
Printing
Leather & 28 -- -- -- -- -- -- 28
Leather
Products
16 of 25 3/13/2024, 8:40 AM
Basic 20 7 1 4 2 7 3 44
Chemical &
Chemical
Products
Non metallic 5 5 1 8 8 5 12 44
mineral
products
Basic Metal, 17 9 -- -- -- -- -- 26
Alloys & Metal
Products
Machinery & 11 4 -- -- -- 4 1 20
Parts, Elect-
rical
machinery
parts
Transport -- 2 -- -- 1 -- -- 3
Equipments &
Parts
Miscellaneous -- -- -- -- -- 1 -- 1
manufacturing
industries
Repair of 26 -- 2 2 2 2 2 36
capital goods
Other 9 1 -- 1 1 2 5 19
industries (non
manufacturing)
Total 458 232 164 96 85 119 74 1228
Source : Deputy Chief Inspector of Factories, Erode.
Cotton textiles units are leading in this district followed by Food

Products units. While cotton textile units are 457 Nos, food
17 of 25 3/13/2024, 8:40 AM
products units are 437 Nos, both are having the share of 37.2%,
35.6% respectively, which shows that these two sectors alone
dominating in this district, in factory sector.
Erode Taluk is having 458 No.of units occupies the first place with
37.3% of the total units in the district, followed by Perundurai Taluk
with 232 units. Bhavani Taluk is having 74 units, which is the lowest
No.of units among all other talukes.
KHADI & VILLAGE INDUSTRIES
Khadi & Village Industries are patronised by the Khadi & Village
Industries Board (KVIB) in this district. It is the nodal agency at the
local level. KVIB has two offices in this district, one at Erode and
another at Dharapuram. It has own production centres in this
district. Cotton yarn spinning centres, Polyester yarn spinning
centres, Cotton Khadi & Polyester Khadi Weaving Centres, Silk
Saress Weaving Centres, Soap manufacturing unit, Leather units
and Handmade paper units are functioning under Khadi and Village
Industries Board. In addition to that, there are some co-operative
societies functioning under KVIB. KVIB have sales outlets to extend
marketing assistance to the units functioning under them.
The total production of KVIB items, the volume of sales,

employment and earnings are furnished in the following table.
S.No Product Production Sales Employ- Earnings

Rs. Lakhs Rs.in ment Rs.in
lakhs (No.of Lakhs
persons)
1 Khadi 17.27 -- 338 7.85

Cotton Yarn
2 Polyester 18.29 -- 272 7.70

Yarn
3 Cotton Khadi 50.27 35.69 55 8.80
4 Polyester 65.11 20.32 87 16.66

Khadi
5 Silk 57.06 47.91 44 NA
6 Woolen -- 0.96 -- --
7 Village 19.11 26.84 18 2.25

Industries
Soap
18 of 25 3/13/2024, 8:40 AM
8 Leather 28.24 27.61 13 1.28
9 Carpentry -- -- -- --
10 Handmade 24.21 18.69 23 3.75

paper
It is evident that the KVIB has committed to promote business and

micro industrial ventures in both rural and urban areas.
LARGE SCALE INDUSTRIES
There are 59 Large Scale Industries in this district. Most of the units
are cotton textile units. 47 units are textile industries. The following
table shows the number of large scale units product wise.
No.of Large Scale Units in Erode District
Sl.No Description of Activity No of Units
1 Textile Industries 47
2 Engineering Industries 3
3 Machinery manufactures --
4 Machinery & Equipment --
5 Cement & Allied Industries --
6 Diamond Cutting & Polishing --
7 Electrical & Electronics --
8 Sugar Mills 2
9 Oil Extraction --
10 Distilleries --
11 Others (Food-2, Chem-4, Paper-1) 7
Total 59
Among the Large Scale units, the Textile Industry is the traditional
one. It is mostly spinning oriented. Out of the 47 units, 36 units are
spinning oriented, one unit is a composite unit. 7 units are engaged
in Textile processing and two units are coming under knitting
activities. The remaining industries are chemical product 4 Nos,
Engineering Industries 3 Nos, Sugar mills 2 Nos, Food Products
Industry 2 Nos and Paper Products 1 No.
Industrial Cooperative Sector
Various industrial cooperatives are promoted by the Industries
19 of 25 3/13/2024, 8:40 AM
department in this district to provide employment and to up-left the

economic condition of the poor. At present there are 12 such
industrial cooperatives with a total membership of 1609 numbers
operating in this district. Persons engaged in particular activities are
brought under one roof and registered as cooperative societies by
providing share capital loans, procuring machineries, raw materials
required for the units and marketing support by the industrial
cooperative wing.
Among the 12 Industrial cooperative societies 10 are engaged in

production activities such as Engineering, Coir products, Jute
products, Textile products, Processing, Printing & Chamber Bricks
and 2 are engaged in Auto Transport service sector.
COTTAGE INDUSTRIES
Cottage Industries are providing large scale employment with low

cost investment. In Erode District there are 4221 units registered
under cottage industries as on 31.10.2000 and they are providing
employment to 4725 persons. Among them the major type of
industries are given below.
Major Cottage Industries as on 31.10.2000.
Sl.No Name of the Cottage No.of Employment

Industries Units
1 Tailoring units 1176 1180
2 Weaving of Cotton, Wool, Jute 963 986

and Silk
3 Leather Products 508 538
4 Coir & Coir Products 239 245
5 Gem cutting 218 365
6 Pickle and Mixture making 144 164
7 Bidi Manufacturing 121 162
8 Coconut leaf Thatching 121 126
9 Puffed Rice 108 118
10 Wood Industry 91 132
11 Dehydrated / Dried fruits & 88 90

vegetables
12 Pottery 85 97
20 of 25 3/13/2024, 8:40 AM
13 Bamboo Baskets 68 73
Handi Craft Units
Like cottage industries, handi craft units are also providing

employment to the rural artisans. In Erode District there are 3527
units providing employment to 3704 person. The major types of
activities are furnished in the table.
Major Handicrafts Units As on 31.10.2000
Sl.No Name of the Handicrafts No.of Units Employment

Activity
1 Readymade Garments 901 961
2 Handloom Cloth 628 674
3 Leather 513 542
4 Agarbathi 337 352
5 Carpets 238 262
6 Palm Leaf Articles 164 188
7 Incease Perfumery 141 170
8 Artistic Printing 114 136
9 Jewellary 108 108
10 Bamboo, Cane etc. 106 128
11 Hand Printing 82 82
12 Wood Work 82 92
Regd. SSI Units - Block-wise and Product wise as on 31.03.

2000 in Erode District
Ind.code Name of Erode Moda- Kodu- Perun- Chenni- Uthu- Gobi Nambi-
Industry kruhi mudi durai malai kuli yur
20-21 Food 327 206 204 301 98 162 78 22

Products
22 Beverages 58 138 68 56 12 4 20 12
23 CottonTextiles 980 302 282 480 315 140 68 141
24 Wool, Silk & 32 2 4 5 8 7 21 17

Synthetic
Fibre
21 of 25 3/13/2024, 8:40 AM
25 Jute, Hemp 1 4 7 8 -- 2 5 2
and Mesta
Products
26 Hosiery & 364 804 746 108 112 227 77 18

Readymade
Garments
27 Wood & Wood 10 28 29 28 18 25 29 19

Products
28 Paper & Paper 56 120 62 60 62 60 22 9

Products
29 Leather & 63 28 16 72 38 65 14 40
Leather
Products
30 Rubber & 6 41 24 12 28 15 4 25
Rubber
Products
31 Chemical & 45 22 18 72 112 90 8 16

Chemical
Products
32 Non-Metallic/ 18 46 64 22 16 20 14 12
Mineral
Products
33-35 Basic Metals, 138 197 240 193 43 93 8 22

Metal
Products and
Machinery &
Parts
36 Electrical 36 76 72 90 55 36 13 26
Machinery &
Apparatus
37 Transport 22 22 54 160 50 85 17 35
Equipment
& Parts
38 Misc. Mfg. 251 445 342 248 142 114 20 118

Industries
Table Continues
22 of 25 3/13/2024, 8:40 AM
Ind.code Name of Sathy Bhavani- Thala- Bhavani Amma- Anthi- Dhara- Kunda-
Industry Sagar vadi pet yur puram dam
20-21 Food 55 34 18 72 38 91 21 29
Products
22 Beverages 17 5 - 12 14 28 28 18
23 CottonTextiles 32 47 12 162 141 147 13 23
24 Wool, Silk & 9 4 8 3 14 16 12 --

Synthetic
Fibre
25 Jute, Hemp -- -- -- 12 14 14 6 --
and Mesta
Products
26 Hosiery & 45 63 14 102 109 99 78 16

Readymade
Garments
27 Wood & Wood 20 9 2 74 26 16 14 4

Products
28 Paper & Paper 15 1 2 21 18 10 12 8

Products
29 Leather & 12 3 3 32 17 14 7 7
Leather
Products
30 Rubber & 4 2 4 38 13 2 8 --
Rubber
Products
31 Chemical & 18 2 2 26 15 14 6 5
Chemical
Products
32 Non-Metallic/ 31 1 2 23 7 12 7 7
Mineral
Products
33-35 Basic Metals, 36 3 16 42 17 34 9 20

Metal
Products and
Machinery &
Parts
36 Electrical 9 3 5 38 9 10 24 12
23 of 25 3/13/2024, 8:40 AM
Machinery &
Apparatus
37 Transport 28 12 11 44 18 26 19 30
Equipment
& Parts
38 Misc. Mfg. 35 15 26 77 31 88 58 41
Industries
Table Continues
Ind.code Name of Kangayam Vellakoil Erode Bhavani

Industry (M) (M)
20-21 Food 225 118 344 112

Products
22 Beverages 59 37 18 14
23 CottonTextiles 68 35 1131 86
24 Wool, Silk & 26 -- 8 4

Synthetic
Fibre
25 Jute, Hemp 14 -- 7 5
and Mesta
Products
26 Hosiery & 112 87 560 142

Readymade
Garments
27 Wood & Wood 48 30 8 97

Products
28 Paper & Paper 137 95 15 30

Products
29 Leather & 106 79 80 26

Leather
Products
30 Rubber & 7 20 10 12
Rubber
Products
31 Chemical & 87 49 60 27
24 of 25 3/13/2024, 8:40 AM
Chemical
Products
32 Non-Metallic/ 24 50 85 13
Mineral
Products
33-35 Basic Metals, 264 182 32 34

Metal
Products and
Machinery &
Parts
36 Electrical 116 65 26 22
Machinery &
Apparatus
37 Transport 58 26 85 36
Equipment
& Parts
38 Misc. Mfg. 112 80 334 68

Industries
25 of 25 3/13/2024, 8:40 AM

Industrial Potential Survey Report - Erode

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INDUSTRIAL POTENTIAL SURVEY REPORT - ERODE about:reader?url=https%3A%2F%2Fdcmsme.gov.in%2Fpublications%...

INDUSTRIAL POTENTIAL SURVEY

Erode district is one of the most industrialised in the state of

Erode District is occupying 5th place in Small Scale Industries next

Same of the important industries in this district are listed below.

i. Cotton Textiles Industry

ii. Edible Oil Mills

iii. Rice Mills

iv. Other Food Product Industries

vi. Non Metallic - Mineral Products

Textiles account for one fifth of the country’s industrial production,

Handloom Focal centres and their location

Name of the Taluk Focal Centre

Erode Erode, Sivagiri, Avalpoondurai

Perundurai Chennimalai, Vijayamangalam

Gobi Gobi, Athani, Kanakkampalayam

Sathyamangalam Doddampalayam, Kodiveri

Kangayam Kangayam, Vellakoil

Bhavani Bhavani, Anthiyur, Thavittupalayam

There are 48833 handlooms in this district as per 1995 census in

Production particulars of the handloom in cooperative focal for the

HANDLOOM PRODUCTION PARTICULARS

S.No Name of the 1997-98 1998-99 1999-2000

1 Bedsheet 54.34 2779.63 52.23 2758.36 48.93 2851.55

2 Towels 40.49 947.84 36.30 949.97 32.47 890.19

3 Carpets 27.13 1244.07 22.55 1252.20 21.65 1265.78

4 Pillowcovers 2.27 97.53 2.41 106.18 2.77 125.63

5 Sarees 14.14 762.64 16.47 1066.25 15.05 1028.09

6 Polyester 1.42 75.17 2.87 160.12 2.05 110.36

7 Govt.scheme 13.86 363.70 11.37 313.00 7.95 247.81

8 Others 99.55 4711.97 101.50 3513.39 107.67 5081.02

Total 253.20 10982.55 245.70 10119.47 238.54 11600.43

During 1999-2000 this district has produced 238.54 lakhs metres of

Export of Handloom Products

Handloom weavers Cooperative Societies are exporting their

1999-2000 38.82 1850.00

2000-2001 119.44 6363.84

To develop this sector both Central & State Government are

i. Handloom Development Centre

ii. Project Package Scheme

iii. Help Package Scheme

iv. Housing scheme for weavers

v. Export Package scheme

The productivity of the industry is lower. Quality of the products

The Government has introduced the Technology Upgratation Fund

In Erode district there are 39,212 powerlooms as per census in the

Details of Powerloom in Erode District

Sl.NO Details Year Year Year

1 No.of powerloom in the 39212 39212 39212

2 Total No. of persons 6867 6867 6867

3 No.of Powerloom Weavers 10 13 13

Source: Asst.Director, Handloom & Textiles, Erode

There are 13 weavers Cooperative Societies functioning in this

Powerloom Production in Coop. Sector - Erode District

Sl.No Year Production

1 1997-98 213.20 1286.84

2 1998-99 124.67 1656.49

3 1999-2000 96.97 1191.31

The above particulars are the production of sarees & dhoties,

It is distress to note that the utilisation of funds under TUF scheme

Exports of Cotton Powerloom Textiles from India

Exports of cotton powerloom textiles have achieved a growth rate

Financial Unit Cotton Cotton made- Total