Morbi ceramic units switches to coal

Soaring prices of Liquefied Petroleum Gas (LPG), consumed mainly as economic fuel in the ceramic industries belt spread across Morbi, Dhuva, Wankaner and Thangadh in Saurashtra, has created a sudden demand for coal gasifier plants.

"Of the 180 units in Morbi alone, hardly 18 may be operating on gas fuelled manufacturing system," says Jitu Patel of Sunlight Ceramics in Morbi.

Consumption of LPG has drastically reduced to 700-850 metric tonnes per month from previous consumption of 7,000-8,500 metric tonnes of LPG per month. The manufacturers cannot afford the sky-rocketing prices of LPG, he added.

The industrial belt comprises of atleast 225 units manufacturing ceramic flooring tiles and 46 units manufacturing bathroom accessories.

The per day production here is about 6 lakh square feet of ceramic flooring tiles and 25,000 pieces of bathroom accessories.

In the last fiscal Morbi contributed around Rs. 55 crores towards sales tax and Rs. 75-80 crores towards central government taxes.

Despite the revenue generated the industry suffered a heavy blow as prices of LPG used as raw-material scaled since the month of October.

Supplies against the demand of LPG worsened when natural calamities struck refinery operations of US majors who are the key suppliers of LPG followed by shut-down of operations at Reliance Industries Limited's petroleum refinery at Jamnagar. "The prices shot from Rs.24-27 per kg to Rs.38-40 per kg. Presently it is available at around Rs.41-42. There has been a rise of 5 per cent in the prices despite the demand of gas declining slowly and surely," claims Rajubhai Patel of Phase Ceramics.

Morbi based ceramics manufacturing units operate of Kiln processing pattern comprising two categories mainly Roller Kiln and Tunnel Kiln.

Approximately 40 units in Morbi operate on Tunnel Kiln which consumes C9 gas as fuel and is an old processing technique, as against which 180 units operate on Tunnel Kiln processing technique and consume LPG as a fuel to obtain quality consistent product.

"Installation of Chinese Coal plant costs around Rs.1-1.5 crore. However majority of the 180 units are using the borrowed version of it which brings down the cost to Rs 40-50 lakhs, without making much difference to the quality," according to Jitendra Patel of Silver Ceramics.

The quantity of coal burnt is twice that of LPG gas.

On burning 1 kg of coal 6K calorifice value of heat is obtained. In comparison if 1 kg of gas if burnt would generate 11.8K calorific value of heat, adds Patel.

It is cost effective because coal costs Rs.5 per kg as against LPG which costs Rs.40 per kg approximately in present context, Patel further said.

This situation has even alarmed major players supplying LPG to this industrial belt, which includes Reliance, Super Gas, IPCL, BPCL, HPCL and GAIL and are worried on the market share lost by them daily and gradually. Today, I'm at Morbi to gauge the market size and feel really sorry to loose the market share in LPG segment, because the consumption of city which was 8,500 MT of LPG per month before October has drastically reduced to 2,500 MT per month".

"Ofcourse this is the result of upward scaling of the LPG prices, but we are helpless because the rates of LPG are based and governed from the international market keeping in view the demand-supply ratio," according to Deepak Desai, Area Sales Manager of Super Gas in Morvi.

By February 2006 end, LNG pipeline as proposed by state government and is likely to be operational resulting less demand of LPG from suppliers like us, added Desai.