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Crunch in carbon black supply forces unplanned shutdowns, says tyre makers

Domestic demand-supply gap in the key input, which was 14% in 2016-17 has gone up to 20% in 2017-18

T E Narasimhan  |  Chennai 

tyres, rubber
Photo: Shutterstock

The crunch in domestic availability of is forcing the domestic tyre to take unplanned shutdowns in the recent past for want of this essential raw-material, according to tyre makers.

(ATMA), whose members account for over 90 per cent of tyre production, in a representation to the Ministry of Commerce & has asked for facilitating easy import of the raw material to ride out the difficult phase having an adverse impact on tyre production in the country.

According to ATMA, factors that have led to the domestic deficit in taking a grim turn include a mismatch in capacity addition by domestic in comparison to growing demand from the domestic Tyre and increased exports by domestic manufacturers.

The domestic demand-supply gap in carbon black, which was 14 per cent in 2016-17 has gone up to 20 per cent in year 2017-18, said in its representation.

“As it is, domestic Tyre is facing the ongoing concern of shortfall in overall availability of natural rubber (NR) on a regular basis. shortage has only added to the woes of Tyre in India”, said Mohan Kurian, Convener, (SCR) Group.

Notwithstanding domestic crunch, steep has been imposed on imports from China, the single largest producer of this raw material in the world accounting for around 40 per cent of its global production.

“Sustainable ways of improving raw material availability for the tyre need to be worked out for the continuation of drive in this vital sector. Domestic Tyre is anticipating good growth in tyre demand after a prolonged period of overall slowdown. It becomes imperative to improve the availability situation urgently”, said Kurian.

According to ATMA, tyre is left with no other choice but to import to meet the domestic deficit. However steep amounting to around 40 per cent of the import price is in place in India making such duty paid imports almost prohibitive.

The unplanned cuts in tyre production due to the shortfall in availability would only lead to higher imports of finished tyres from outside India thereby discouraging value addition within the country. Besides, substantial investments made by the Indian Tyre in capacity creation and enhancement, primarily in truck & bus radial categories, will suffer due to the shortfall of this essential raw material, said

has asked the Government to allow tyre to import on a duty-free basis to the extent of the existing gap between demand-supply to enable the domestic tyre continue with its planned production.

applicable on imports from China needs to be waived till such time the domestic availability improves. At the same time, export of from India needs to be regulated by way of fixing a minimum (higher) export price and/or quantitative restriction.

As is a critical raw material for the manufacture of tyres and the entire transport sector mobility is dependent on tyres, concerted efforts are made by the government on a long-term basis to encourage manufacturing capacity within India as a part of the ‘Make in India’ initiative, has stated.

According to ATMA, the shutdown of plant at Ghaziabad over the past two months has further reduced the domestic availability of Steps need to be taken to restart the plant urgently (after ensuring that the plant meets all statutory regulations) so that availability issue of could be addressed to some extent.

First Published: Mon, February 19 2018. 16:00 IST