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Ceramic players hike price by 20% with immediate effect

Morbi based ceramic manufacturers have raised price by 20 per cent with immediate effect following Gujarat high court's direction for strict implementation of the guidelines issued by Central Pollution Control Board (CPCB) with regard to use of gas-based furnace.The industry has decided not to use coal-based furnace in ceramic units.

"After high court order, at the association level, we had decided to increase price after Diwali. But ceramic players have already hiked the price by 15-20 percent from Monday with immediate effect," said Divyesh Patel, president of Morbi-Dhuva Glaze Tiles Association.

He said that the association has also asked ceramic units with coal-based furnace to switch over to liquified natural gas (LNG) based furnaces. "We are preparing to go to government to allow us to use coal furnaces," Patel added.

The court has sought a report in this regard during the next hearing on November 11. If these industrial units fail to switch over from coal base to gas-based furnace, they will be forced to shutdown. The high court has ordered Gujarat Pollution Control Board (GPCB) to remove coal-based furnaces. The order came in response to a PIL alleging the use of coal-based furnaces by over 200 ceramic units and 15 silicate industries in and around Morbi without adopting the proper pollution control system.

The petitioner had contended that the CPCB had on August 23, 2012 asked the Gujarat Pollution Control Board (GPCB) to take action against 77 polluting units that use coal-based furnace, while the permission is granted for the use of natural gas.

In Morbi, most of the ceramic units are using coal-based furnace as it is almost 30 per cent cheaper than LNG. With tax LNG price is Rs 43 per cubic meter, while coal gas is almost cheaper by Rs 12-14.

M P Shorya, managing director of Orbit Cera Tiles Pvt Limited said, "Use of gas-furnaces will increase our production cost over 15 per cent and in this condition, ceramic players have to hike price for survival. If we do not increase price, it will be difficult for small units to survive."

In India there are about 750 ceramic products manufacturers, out of which more than 500 units are located in the Morbi area of Gujarat.

The total turnover of the Indian ceramic industry is about Rs 10,000 crore wherein Gujarat contributes about Rs 7000-8000 crore. The industry gives direct and indirect employment to the over 600,000 people across India.

According to ceramic players, when the industry is still to come out from the recession this kind of situation will defiantly hurt, mainly to the small units.

Source: Business Standard