Coir industry in India – Meaning, problems, top states, growth opportunities

Did you know, about 5.5 lakh people are employed with the coir industry in India? The coir industry is a major employer in the country especially the rural sector. The coir industry in Kerala accounts for almost 85% of coir production in India, followed by Maharashtra, Karnataka, Tamil Nadu and Andhra Pradesh. Today, India is a major exporter of coir products and exports to over 110 countries of the world.

Here we’ll take a look at the history of coir industry, coir industry meaning, coir products, exports, problems in the Indian coir sector and more. We’ll also take a brief look at the Coir Board in India.

Coir industry meaning

Let us begin by understanding what is coir? Coir is a natural fibre extracted from the outer husk of coconut. It is available as white coir and brown coir.

White coir is used to make strings, fishing nets, ropes etc. whereas brown coir is used to make sacking, upholstery padding and more. Coir is also used as a packaging material, yarn, brushes, mattress, sofas, and insulation panels.

So, to answer the question what is coir industry – The coir industry is therefore an agro industry that’s creating employment opportunities especially in the rural sector across the coconut producing states. The coir industry is primarily export focused, with exports of coir and coir products amount to US$362 million in FY23 (Source: IBEF).

(Also read: Role of MSME in rural development and MSME Champions Scheme )

Indian coir industry history

It is believed that coconut was first introduced during the post-Vedic period. Various products made of coconut fibre (e.g., ropes) have been in use since ancient times. The fibre earned the name of ‘golden fibre’ and captured markets in Europe and other areas in no time.

However, it was only in 1859 when the history of coir industry in India began, when the first factory for the production of coir products was set up in Alleppey/Alappuzha.  Let’s learn more about it.

History of Coir industry in Kerala

Coconut is one of the primary trees grown in the state of Kerala and Alappuzha is the centre of the coir industry in Kerala. The sector is regarded as the largest cottage industry in the state, with both men and women are engaged in the production of coir, though women make up the majority.

The strategic location and waterways transportation system, that is, the backwaters available in Alappuzha saw the emergence of coir industrial units. The availability of raw material and labour, encouraged Mr. James Darragh to set up the first coir factory in India. Gradually, more units emerged in other cities of Kerala such as Kollam, Kozhikode, and Kochi. The potential of coir fibre not only encouraged other European companies to set up coir units, but Indian firms and local entrepreneurs also wasted no time to leverage the opportunity.

The demand for coir products was triggered by many factors, one being the need for an economical and readily available insulate in European homes. The demand for coir as a suitable insulate resulted in the growth of the coir industry in Alappuzha and other cities in Kerala.

(Also read: Tendering opportunities with local self government lsgkerala )

The coir industry in Alappuzha bloomed, and by 1967 there were over 1400 coir units in the city. Other cities, namely Karnataka, Tamil Nadu and Andhra Pradesh were also witnessing setup of new coir units.

The coir industry in Alappuzha bloomed, and by 1967 there were over 1400 coir units in the city. Other cities, namely Karnataka, Tamil Nadu and Andhra Pradesh were also witnessing setup of new coir units.

Coir Industry in India – Exports and Products

The coir industry in India is export driven. Coir pith is the largest exported coir product from India. USA, China, Netherlands, Spain, Australia are some of the top countries where coir is exported to.

In 2020-21, coir tufted mats were exported to over 77 countries with 80% of the products being exported to the USA, the UK, Germany, Italy and Netherlands. 96% of the import of coir fibre is by China. (Source: Indian Trade Portal)

Other popular products include: Coir tiles, ropes, baskets, plates, cushions, handbags, matting for cricket pitches or roof surface cooling, fibre discs, pith, plant climbers, doormats, geo-textiles, etc.

(Also read: How to start an export-import business in India )

Government initiatives for Coir Industry development

The Coir Board is the statutory body set up for the promotion and development of the coir industry. To support the growth of the sector, there are several schemes introduced by the government. The popular ones include:

• Coir Industry Technology Upgradation Scheme (CITUS)
• A Scheme for Promotion of Innovation, Rural Industries and Entrepreneurship (ASPIRE)
• Scheme of Fund for Rejuvenation of Traditional Industries (SFURTI)

Coir industry in Tamil Nadu

The state of Tamil Nadu is also known for its coir production. When it comes to brown fibre, Tamil Nadu is the largest producer. There are several coir societies set up and schemes initiated to drive employment and increase the use of husk.

Today, under the Department of Industries and Commerce, there are 64 societies operating to support the coir sector. Of that, there are 4 marketing societies at the regional level to market coir products. There are over 11,000+ members with a share capital of over ₹279.5 lakhs.

There’s also a gradual shift of coir units from Kerala to Tamil Nadu, and the coir industry in Polacchi, Salem, Trichy is thriving. This is because there’s access to cheaper raw materials, and business friendly socio-political and industrial environment. There are also several ports in the state that facilitates exports (shipping) and hence reduces logistics and transportation costs.

For more details on the coir industry in Tamil Nadu, visit: msmetamilnadu.tn.gov.in/coir.php

Role and Function of the Coir Board

The Coir Board based out of Kochi, Kerala was established by the Government of India under the Coir Industry Act 1953. The board has several regional offices across other states, all focusing on the promotion, research and development of the coir sector.

You can learn more about the Coir Board in India on their website: coirboard.gov.in

The main functions of the Coir Board in India are:

• Providing guidance and advice on all matters concerning the growth and development of the coir industry in India
• Ensuring that all manufacturers of coir products and those of husks, coir fibre and yarn are adequately and fairly remunerated
• Enabling the seamless establishment of coir factories and production units
• Facilitating marketing activities for coir fibre, yarn and other related products, and coconut husk in domestic and global markets, and promote export of coir products (Also read: How to design marketing strategies for business growth)
• Following regulatory and compliance requirements by registering coir spindles and looms for manufacturing, licencing exports, and other coir manufacturers
• Conducting timely inspection of coir produce to fix grade standards
• Supporting R&D in the field and supporting institutions carrying it out
• Collecting and publishing data and statistics from relevant stakeholders on the coir industry
• Promoting coir co-operatives, licencing warehouses, and managing the stocking and sale of coir products

Problems of coir industry

Though the coir industry is a thriving sector focused on exports, there are some challenges of the coir industry. Some of the common problems of coir industry in Kerala, West Bengal, and other parts of India are:

• Lack of awareness among people – For example, though West Bengal has steady coconut production, roughly 20% of the coconut husk is used for coir extraction. Unawareness of its potential and use, causes people to either discard the husk or use it as fuel.
• Unregistered businesses – That is, though there are many MSME coir units, not all have registered under the Coir Board and hence unable to leverage the benefits and support of the Coir Board.
• Lack of skilled workers – Most workers in the coir sector are traditional workers with little or no knowledge of new technologies and use of machinery.
• Wages and financial challenges – Low level wages and financial problem to buy raw materials.
• Insufficient funding – Though there are schemes set up to promote and develop the coir sector, there’s the belief that other subsidies and allowances should be provided.
• Socio economic conditions – Low level of education, lack of training and development

(Also read: Challenges faced by Indian MSMEs and tips for overcoming business challenges )

The way ahead

As a MSME owner, it likely for you to ask, how to start coir industry business? Or is coir industry profitable and a lucrative business opportunity? Or how to set up a coir exports business?

In general, the coir sector focuses on creating employment and business opportunities for both large and small businesses. India is one of the largest producers of coconut and coir, as its by-product is used to make and sell numerous products. There are several capital- and labour-intensive tasks involved in coir production (i.e., from cultivation to processing and manufacturing the finished products), along with value added services such as packaging, transportation, exporting and more.

Though the industry is primarily export driven, there’s always been a constant demand for coir products in the domestic market. Though to set up an export business you will need the to register your business with the Export-Import Bank of India and get an export-import code, and acquire the necessary licences, it is a lucrative business avenue to explore. Today, due to awareness there’s greater demand for eco-friendly and sustainable goods, and coir is emerging as a preferred product.