| Date: |
09-01-2016 |
| Subject: |
Gas price cut a relief for Morbi ceramic industry |
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Ahmedabad: Gujarat government's move to reduce prices of piped natural gas (PNG) for industrial users has given a new lease of life to ceramic industry in Morbi, which was reeling under slowdown and fierce competition from China.
Reduction in production cost as a result of gas price cut is expected to provide a much needed cushion to India's largest cluster of ceramic units to face Chinese onslaught and slowdown to some extent.
Ceramic tile manufacturers of Morbi estimate around 10% decrease in their production cost with gas prices coming down. The Gujarat government had on Wednesday slashed prices of piped natural gas prices by Rs 5 per cubic meter.
The cost of gas for the ceramic industry has come down to Rs 27 per cubic meter effective January 1 from earlier Rs 30 per cubic meter.
The price will further come down by Rs 2 per cubic meter from April 1, 2016.
As many as 350 units in Morbi had brought their shutters down for a month in November due to slowdown and Chinese competition. "From April the effective price will be Rs 25 per cubic meter. This will benefit ceramic tile makers.Reduced gas price has given a new lease of life to Morbi ceramic industry ," said Nilesh Jetpariya, president, Morbi Ceramic Industry Association.
Around 600 odd ceramic tile units in Morbi consume 25 lakh cubic meters per day and Rs 5 per cubic meter dip in gas price will bring the fuel cost down by Rs 1.25 crore per day . Decline in production will also ease pressure on margins.
Vitrified tiles from China are 20% cheaper than those manufac tured in Morbi. "As far as vitrified tiles are concerned, an anti-dumping duty is still required to get competitive edge over China. Lower production cost will aid wall tile makers in exports and domestic markets as China has limited presence in this segment," added Jetpariya.
According to industry players, availability of gas at Rs 22 to Rs 23 per cubic meter will provide the Morbi ceramic industry a competitive edge over China. And, if antidumping duty on Chinese ceramic products in imposed, it can even compete China.
Source : timesofindia.indiatimes.com
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