Gujarat bakers shift to CNG to cut losses

Consequent to the rise in prices of petrol and diesel, bakers in the state hiked prices of 400 gm and 800 gm bread by Re 1 and Rs 2 per packet, a few days ago. Though it helped smoothen operations, margins still remained squeezed.

"Price hike will only help for sometime. In the long-run, we have to resort to other viable means and CNG seems the ideal choice," said Mustufa Shaikh, president of Gujarat State Bakers Federation (GSBF), and chairman of Italian Bakery Pvt Ltd.

Almost 80 per cent of bakers use diesel as fuel, apart from wood and furnace oil. But now players like Super Bread and Popular Bread are gradually shifting to gas, hoping to cut losses.

According to Shankerlal Ahuja, owner of Super Bread, a shift from diesel to CNG reduces the fuel cost by around 30 per cent.

While medium and large bakery units with a capacity of 10 tonne bread per day and above have to spend between Rs 10 lakh and Rs 15 lakh, small bakery units have to shell out Rs 5 lakh to modify production facilities to suit CNG. "Within a year, nearly 50 per cent of bakers may be using CNG," added Ahuja.

Further, CNG prices too rose by Rs 3.30 per scmd recently and only.  units with access to gas pipelines can shift while others will have to continue using diesel.

The industry has hit a rough patch since a month with prices of other raw materials too rising. Prices of vanaspati, maida and yeast have been quite volatile over the last month.