Post Diwali, the Morbi based ceramic industry is headed for more troubled times as it comes under pressure due to recent hike in gas prices.
After negotiations with the state government were met with a negative response, ceramic tiles manufacturers have decided to increase the price of their products by 7 to 10 per cent.
“We had decided to go on strike against the gas price hike earlier but there seems to be no hope for us even after talking with GSPC officials and the state government. To survive in this critical condition we have decided to increase prices by 7 to 10 percent from 1 December,” said Rajubhai Dhamasana, president of Morbi–Dhuva Glaze Tiles Association.
He added, “We do not have much choice in this matter and our clients must accept this rise. If we don’t increase the rate, we will be incurring losses and presently the industry is already working at very low profit margins. During the last one year, gas prices have increased by over 50 per cent. As petrol and diesel prices have increased, the raw material costs have also increased by 25 per cent in the last six months. This has brought down the industry activity considerably.”
Morbi gets its gas from Gujarat State Petroleum Corporation (GSPC) and recently after the gas price had reached Rs 26.70 per cubic meter.
With this price rise the cost of production has gone up by 30 per cent. “The ceramic industry is facing several problems since last six to seven months and now the hike in gas prices has also hit the industry. The Government should have informed us before increasing the fuel price so that we could manage the production costs. Right now our clients have booked their order with the previous cost and we have to complete it as we cannot pass it to on to our clients,” said Hasmukh Patel, managing director, Asian Granito India Ltd., Patel is also a director of Indian Council of Ceramic Tiles and Sanitaryware (ICCTAS).
According to Patel, about 30 per cent ceramic units are closed and the rest are working on limited time as well. In India there are about 750 ceramic products manufacturers and out of these, more than 500 units are located at the Morbi area in Gujarat.
The total turnover of the Indian ceramic industry is about Rs 10,000 crore and Gujarat contributes Rs 7,000-8,000 crore in it. The industry gives direct and indirect employment to the over 6 lakh people across India.