Carbon black manufacturers today said there is not shortage of the raw material used for making tyres and urged the government to keep import duty to safeguard domestic producers and jobs.
The Carbon Black Manufacturers Association (CBMA) in a statement denied any shortage of carbon black in the country, saying in fact, there is a surplus and demand is weak in domestic markets due to cheaper imports.
The statement came in response to reports that claimed shortage of the key raw material used in tyre industry.
Tyre makers body Automotive Tyre Manufacturers Association (ATMA) recently claimed that shortage of carbon black has led to unplanned shutdown of factories.
"The country in fact holds surplus capacities in production of carbon black and is forced to undertake exports in view of significant imports of carbon black made by the users due to duty exemption schemes of the government," the CBMA said.
Carbon black manufactures like SKI Carbon Black, Phillips Carbon Black, Himadri Specialty Chemicals and Continental Carbon have a combined capacity of 10.58 lakh tonnes while annual requirement is around 9 lakh tonnes, it said.
The user industry meets about 15 per cent of its requirement through imports due to the duty exemptions, it said.
"This has resulted in exports of carbon black in almost similar volume by the carbon black manufacturers."
"Under the circumstances, carbon black manufacturers are left with no option but to export similar volume to optimise the utilisation of its production capacities," CBMA said.
The ATMA had claimed that in 2017-18, domestic carbon black production stood at 8.4 lakh tonne, while actual consumption was at 9 lakh tonne and exports were at 1.2 lakh tonne. Import of the raw material stood at 96,000 tonne.
China is the single largest producer of carbon black in the world accounting for about 40 per cent of global production but a steep anti-dumping duty has been imposed on import of the raw material from the country, the ATMA had said.
ATMA asked the government to allow tyre companies to import carbon black on a duty free basis to the extent of the existing gap between demand and supply to enable the domestic tyre industry continue with its planned production.
CBMA said the carbon black industry can easily operate its plants in the region of 90-95 per cent and meet the entire requirement of the country provided the consumers make firm commitments.
It also said the present shutdown of production by Continental Carbon due to government orders is a temporary phenomenon and all efforts are being made by the company to meet the statutory obligations and recommence production.
The industry body said because of the availability of economically cheaper raw material and other inputs (carbon black in particular), the global tyre manufacturers are attracted to India and are adding to employment generation.
"By imposing restriction on imports, Indian industry is able to safe guard its expansion plans and generation of employment for millions of jobless educated youth of India," CBMA said.
Disclaimer: No Business Standard Journalist was involved in creation of this content
