Masula rolled gold jewellery industry in dire straits

The sixty-year-old world famous Machilipatnam (Masula) rolled gold jewellery cottage industry is fast collapsing due to the popularity of cheap jewellery manufactured by Mumbai firms.

"The Rs 100-crore industry will perish in four or five years if the government does not take up immediate firefighting measures to save it," N Naga Venkata Sivaramakrishna, president of the Machilipatnam Gold Covering and Plating Jewellery Manufacturers' Welfare Association (MGJMWA), told Business Standard.

"Hundreds of manufacturers and thousands of gold and silversmiths have already deserted the field, with the annual turnover crashing to around Rs 25 crore. Some 300 manufacturers and about 10,000 workers, still struggling in the industry, have been desperately looking for the government's promised helping hand," he said.

Sivaramakrishna said that the turn of business took for the worst five years ago when the Mumbai jewellers began manufacturing cheaper imitation gold and silver jewellery with colouring plants, the latest technology in the field.

"As a result, the traditional Mumbai exporters, who have been purchasing ornaments from Machilipatnam units for over five decades, have either stopped or drastically cut down their purchase orders. While the Mumbai makers use more of chemical colours and less of gold, the Machilipatnam firms employ pure gold process. However, to the consumers it seems that 'all that glitters is gold'," he said.

"In chemical gold plating, the makers use, apart from chemical colours, a plastic solution 'laker', which gives extra but temporary shine to the jewellery. Even before the warranty period of six months expires, the ornaments lose their shine and assume an ugly look. Now some Mumbai makers are not even using gold. The MGJMWA members use 100 per cent pure gold and silver for covering copper ornaments. The Mumbai makers are supplying at Rs 15-20 ornaments akin to Masula products, which cannot be priced at less than Rs 100," he added.

"If the Machilipatnam gold covering and plating industry has to survive, it should also, sacrifice the quality aspect by setting up chemical colour and laker plants to counter the competition from its Mumbai counterpart," he said.

"An outlay of Rs 30 lakh is required to set up a full-fledged unit. A chemical colouring plant costs Rs 10 lakh and a design cutter Rs 70,000," he added.

He said, "Apitco, a consultancy organisation formed by financial institutions and the state and central government agencies, prepared a cluster development programme for the MGJMWA members five months ago. The members await implementation of the blueprint."

He regretted that the problem arose as the commercial banks took an unhelpful attitude towards rolled gold industry and hoped that the Apitco and the state industries department would sort out their problems.

He sought the setting up of a common facility centre in a 30-acre land with all infrastructure facilities for the industry in the district headquarters town, and sanction of subsidies for purchase of gold, silver, copper, acids, stones, chemical storage, and other exigencies.

He said that the N T Rama Rao administration had given the benefit of zero tax to the industry (earlier four per cent). The Chandrababu Naidu government imposed one per cent tax, which continues at present.

"The makers are now agitated over the fate of the industry after the implementation of VAT next year. We appeal to the government to at least continue the present one per cent tax on the imitation jewellery industry," he said.