Morbi's ceramic units seek piped gas, sales tax cut

The world-famous ceramic industry of Morbi has requested the government to supply natural gas through pipeline to cut fuel costs and reduce sales tax to keep the industry competitive in the domestic and the international markets.

The ceramic industry of Morbi is facing a stiff price war from its main competitor, China.

At present, high fuel costs lead to higher production cost, putting the industry at a disadvantage against the cheaper Chinese products, Praful Detroja of Omega Ceramics said.

He said fuel prices account for 35 per cent of the total production cost of ceramic units. Increasing fuel prices have pushed ceramic units in the Saurashtra region into crisis.

Pushing behind the Saurashtra industry, China has captured up to 15 per cent of the market share. The units are suffering losses in the international and the domestic markets, unable to compete with cheaper Chinese products, Detroja said.

The government has told the industrialists in the area that it will soon send a team of engineers to conduct a survey and study on supplying natural gas through pipelines to the industries.

The government wanted to provide natural gas to the industry soon, state finance minister Vajubhai Vala told representatives of ceramic units. The representatives had recently met chief minister Narendra Modi to apprise him of the problems the industry is facing.

Ceramic units, spread over Morbi, Wankaner, Thangadh, Bamanbor and Shapar-Veraval of Rajkot district, is a major industry in the state.

These areas are rich in fireclay deposits, which is a raw material for the units.

In addition to this, another raw material, feldspar, is acquired from Bikaner in Jaipur.

The units have a collective annual turnover of Rs 300 crore. Ceramic products such as glazed tiles, sanitaryware and cup and saucers manufactured in Morbi and Thangadh earn nearly Rs 38 crore of foreign exchange annually through exports to the Gulf, Sri Lanka and Africa.

Providing some relief to the industry, the government of Gujarat had cut sales tax on the products from 15 per cent to 8 per cent in the last budget.

However, to stay competitive in the international market, the industry is seeking a further reduction in sales tax to four per cent. This reduction in sales tax will boost the industry, Veljibhai, president of the Morbi-Dhuva Glaze Tiles Makers' Association, said.

Around 500 units are operating in the area and out of them, around 200 units are engaged in glazed tiles production.

The industry provides employment to more than 25,000 people, both directly and indirectly.