The proposed diversification of chemical manufacturers is likely to create a shortage of inputs for traditional matchstick and firework industries in Sivakasi.
J Tamil Selvan, a local chemical manufacturer, said the price of carbonate acid, an important raw material used by chemical manufacturers, has increased almost 10-fold to Rs 30,000 tonne from Rs 3,000 tonne in January this year, primarily due to high freight cost.
Similarly, cost of other raw materials like potassium and nitrogen have also doubled in the last six months. The Tamil Nadu government used to give 50 kg of sulphur for Rs 290 about two years ago, but today the rate has increased to Rs 2,150, he added.
Currently 60 per cent of the total production by chemical units in Sivakasi is consumed by fireworks and matchstick industries while 20 per cent is by the Defence ministry.
Tamil Selvan is one of the 12 chemical manufacturers in Sivakasi who has decided to close his unit to diversify in the last six months.
More From This Section
R Subramaniyam, another chemical manufacturer, said labour problem had also affected the industry. Manufacturing units used to run three shifts a day, but now the same units are running one shift due to labour shortage. Subramaniyam's unit produced 70 tonnes of chemicals for the firework industry every day in three shifts, but today it has come down to 20-25 tonnes.
This has also resulted in a supply and demand problem. Since the supply is low to the matchstick industry, the total sticks in a box has come down to 20-25, from the earlier 50.
The chemical manufacturers are even thinking of getting into the travel agency business in metros like Chennai and Bangalore. Though packaging would be the ideal choice since Sivakasi is known for printing and fireworks, this industry too is in bad shape.