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Setting Up a Small Factory in Coimbatore: Full Cost Breakdown

Setting up a small manufacturing unit in Coimbatore is one of the most financially viable options for entrepreneurs in Tamil Nadu. With a strong industrial ecosystem, good labour availability, and competitive land costs — especially in the Annur corridor — Coimbatore offers a genuinely advantageous environment for new factories. Here's a realistic cost breakdown for 2025–26.

1. Land / Building Rental

You have two main options: rent open land and construct a shed, or rent a ready-to-use factory building. For most small businesses, renting a ready building is more capital-efficient.

• Ready factory building (2400 sqft): ₹12–14 per sqft/month = ₹29,000–₹34,000/month
• Security deposit (typically 3–6 months): ₹90,000–₹2,00,000
• Open land with self-construction: ₹700/cent land rental + ₹15–25 lakh shed construction cost

2. Power Connection

Getting a new industrial power connection in Tamil Nadu (TANGEDCO) involves a one-time capital cost. Typical charges for 25–75 HP supply:

• Security deposit (refundable): ₹30,000–₹80,000
• Service line charges: ₹10,000–₹40,000
• Meter and installation: ₹15,000–₹30,000
• Total one-time power setup: ₹55,000–₹1,50,000

At Vedanth Industrial Zone, HD power lines are already available at the site, significantly reducing the connection lead time (typically 2–4 months) and can lower service line charges.

3. Factory Fit-Out and Civil Works

Even in a ready building, you'll need some fit-out work:

• Internal electrical wiring and distribution boards: ₹80,000–₹2,00,000
• Machine foundations and anchor bolts: ₹30,000–₹1,50,000
• Painting, minor civil repairs: ₹20,000–₹60,000
• ETP or effluent pre-treatment (if required): ₹1,00,000–₹5,00,000

4. Machinery and Equipment

This varies enormously by industry. For reference, common starting points:

• Light engineering / precision components: ₹15–50 lakh
• Plastic moulding (with 1–2 injection moulding machines): ₹25–80 lakh
• Small foundry setup: ₹40–120 lakh
• Textile spinning/weaving unit: ₹30–200 lakh

Government schemes like PMEGP, MUDRA Yojana, CGTMSE, and TN government's MSME subsidies can cover 25–35% of machinery costs through subsidised loans or capital subsidies.

5. Licenses and Compliance

• TNPCB CTE fee (Red Zone, based on investment): ₹25,000–₹2,00,000
• Factory Act registration (Factories Inspector): ₹5,000–₹20,000
• MSME Udyam registration: Free
• GST registration: Free
• Trade licence from local body: ₹5,000–₹15,000
• Legal fees (lease registration, company formation): ₹20,000–₹60,000

6. Working Capital for First 3 Months

Typical working capital for a small 2400 sqft factory:

• Rent + utilities: ₹60,000–₹90,000/month
• Labour (10–20 workers): ₹1,50,000–₹3,50,000/month
• Raw materials (industry-specific): ₹2,00,000–₹10,00,000/month

Getting Started at Vedanth Industrial Zone

Our factory buildings at Vedanth Industrial Zone near Annur offer one of the lowest-cost, most infrastructure-ready options to start manufacturing in Coimbatore. With Red Zone land, power lines at site, borewell water, and competitive rents, you can start operations faster and at lower upfront cost compared to building your own shed. Call us at +91 9042317075 to discuss your requirements.