With gas and other raw material prices rising continually, Morbi based ceramic manufacturers have also increased their product prices by 12 per cent with immediate effect. According to ceramic players, at a time when lower demand had been plaguing the industry, the rise in raw material prices had added further woes.
For instance, few days ago Gujarat State Petroleum Corporation (GSPC) increased its gas price by Rs 4.60 per cubic meter. Add to that, labour cost, raw materials and transportation costs also increased gradually.
"Our overall production costs have increased by 17-20 per cent in past few months as gas prices, raw materials and transportation costs increased. We could only reduce such an impact by hiking our product prices by Rs 5 to Rs 15 per box which amounts to around 12 per cent," said MP Shorya, secretary of Morbi–Dhuva Glaze Tiles Association.
The last time the ceramic industry in Morbi had hiked product prices was in November 2011, which was by 7-10 per cent.
"Real estate is the main business source for ceramic industry and right now the same has not been doing well. Due to slowdown in the realty sector, demand for ceramics has declined by more than 50 per cent since last one month," said Tulsi Patel, president of Morbi–Dhuva Glaze Tiles Association. As against a production capacity of 2.2 million boxes per day, Morbi currently produces 1.2 to 1.5 million boxes a day wherein demand has dropped by one million boxes.
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 to it. The industry gives direct and indirect employment to the over 600,000 people across India.