Financial Performance of Kerala State Co-operative Coir Marketing Federation Ltd. No.679

Abstract

Aim: Established in the year 1979 as the Apex Federation of primary coir co-operatives functioning in the State, COIRFED plays a pivotal role in the coir sector of the country. It enjoys the unique status of dealing only in biodegradable and nature friendly products. With its headquarters located in the coir capital of the country, Alappuzha, COIRFED is one of the premier organizations in the coir Industry. COIRFED runs 11 factories for producing various coir related products. COIRFED runs around 50 signature shops throughout the country. Due to lack of operational efficiency, underutilization of production capacity, and lack of timely access to labour and raw materials, COIRFED and coir cooperatives are currently in a declining stage (Annual Report of COIRFED, 2019-20). COIRFED's overall performance and operation were based on the marketing of COIRFED products. Improvement is made possible by identifying the causes of loss or ineffective performance. Considering this, the study aimed to analyse the financial performance of COIRFED. Methodology: For the secondary data, past 10 years data from 2010-2011 to 2019-2020 was collected from the annual reports, websites and publications of COIRFED. Statistical tools like the Ratio analysis were used for the analysis. The study was conducted during the period August to September 2023. Results: COIRFED has been incurring losses for the past decade, reflecting poor financial performance. Solvency ratios indicate an unstable financial position, posing long-term stability risks. While liquidity and inventory turnover ratios are favorable, the net profit ratio remains consistently negative. Despite sales, COIRFED operates at a loss due to high production costs and debt burdens. As a cooperative, it prioritizes member welfare over profits. The Kerala State Cooperative Coir Marketing Federation struggles with financial challenges despite being the apex coir marketing authority. Conclusion: COIRFED's financial analysis reveals a decade-long streak of operating losses, signaling poor financial health. Solvency ratios highlight an unstable position with negative implications for its future stability. Though liquidity and inventory turnover ratios are positive, the net profit ratio remains persistently negative. Despite sales revenue, COIRFED struggles with overall losses, prioritizing member welfare over profits due to its cooperative ethos. Heavy debts and high production costs compound its financial woes. The Kerala State Cooperative Coir Marketing Federation, the leading authority in coir product marketing, grapples with financial challenges despite its prominent position.