High fuel prices scorch firecracker business, says survey
October 20th, 2011 - 6:35 pm ICT by IANSNew Delhi, Oct 20 (IANS) Spiralling fuel prices have considerably affected the firecracker business this Diwali, a survey released Thursday said.
The study was conducted by Associated Chambers of Commerce and Industry of India (Assocham) after interacting with 250 firecracker manufacturers in Sivakasi in Tamil Nadu and 500 fireworks wholesale and retail markets in cities like Ahmedabad, Bangalore, Chandigarh, Chennai, Delhi, Hyderabad, Kolkata, Lucknow, Mumbai and Pune.
Key reasons cited by sellers were abnormal increase in fuel prices, escalating raw material (sulphur, potassium nitrate and waste paper) costs, increased road freight charges and shortage of skilled labour.
“Due to escalating fuel prices, road freight rates have gone up, along with other operational costs. Prices of tyres, lubricants and the wages of the drivers have also increased. All these are going to impact margins,” Assocham secretary general D.S. Rawat said.
About 55 percent of firecracker manufacturers and wholesalers in Sivakasi claimed that there had been a drop of about 15 percent in orders from northern states, which consume over 75 per cent of their total production.
Majority of firecracker manufacturers in Sivakasi said the cost of producing crackers had gone up by about 25 to 30 per cent this year due to skyrocketing prices of raw materials.
Sivakasi is home to over 9,500 firecracker factories.
Apart from fuel prices, increasing awareness on pollution due to crackers and restrictions of the local administration and fire department are also contributing to the slump.
For example, the survey indicates that in Delhi the profit margins of fireworks industry have trimmed by over 40 percent in the last two years.
Almost all fireworks traders in Delhi are giving details of decibel level and manufacturing date as customers demand it.
About 5,000 temporary stalls come up in Delhi every year to sell fireworks.
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Tags: abnormal increase, assocham, chambers of commerce, chambers of commerce and industry, diwali, firecracker, freight charges, freight rates, fuel prices, industry of india, local administration, northern states, potassium nitrate, profit margins, rawat, retail markets, road freight, sivakasi, skilled labour, tamil nadu