GDMA calls for cap on dyes' raw material prices

The Gujarat Dyestuffs Manufacturers Association (GDMA) has urged the Centre to convene a meeting of the manufacturers of raw materials of dyestuffs to put in place a cap on the raw material prices.

GDMA says that the price of benzene, aniline oil, solvents, acids and other petroleum-based raw materials of dyestuffs have risen by 30 to 40 per cent over the past five months. The price of raw materials alone now constitute about 60 per cent of production cost.

GDMA officials on Thursday met the Union minister for chemicals and fertilisers, Ramvilas Paswan, in Ahmedabad, and handed over a memorandum to him.

The association said that high raw material prices have forced several units to down their shutters. Gujarat accounts for one-third of the country's dyestuff manufacturing.

GDMA president, K I Patel said, "The worst effected are the small and medium enterprises, which are not in a position to cushion the increased raw material prices."

Patel said that over 60 per cent of the total production are meant for exports. As units have to executive export orders at a pre-determined fixed price, rise in raw material prices push them into huge losses.

"It is an alarming situation where most units are on life support systems, although the hike in raw material prices is also on account of hike in petroleum prices," Patel said.

GDMA has also sought the reduction in electricity duty, sales tax and concessional credit against purchase of plant machinery so as to enhance the sector's competitiveness.

The association has demanded immediate implementation of VAT, so that units do not have to put up with the cascading effect of sales tax burden.

The association was founded in 1962 and has a membership strength of over 800 manufacturing units, producing dyes, intermediate dyes, pigments and speciality chemicals. A majority, over 90 per cent, of the units are in the small scale industry sector, spread across the state.