Brass parts industry of Jamnagar hit by rupee depreciation

Jamnagar exports brass parts worth Rs 300 crore every year.

As the rupee continues depreciating against the US dollar, one of the worst hit industries in the scenario is the brass parts industry of Jamnagar. Moreover slow demand in the domestic side is also creating a hard time for the industry.

“The brass parts industry has taken a beating in the last two months due to the fall in the Indian rupee value against US dollar. Moreover all kinds of demand has declined in the past few months which puts the brass parts industry in a vulnerable position,” said Ramji Patel, president, Jamnagar Factory Owner’s Association (JFOA). The Indian rupee has fallen by Rs 5 to Rs 53.685 from Rs 48.816 against the US dollar.

He added, “High import costs have increased our landing cost of brass scrapes by 15-20 per cent. Due to the high landing cost our production costs have also increased subsequently. We cannot pass it on to the customers as we are committed to deliver at our old price.”

According to Patel, more than 80 percent brass parts manufacturers have cut down the working time from 8 hours to 5-6 hours every day. Jamnagar that is known as the hub of brass parts in India having 5,000 brass making units with more than 80 per cent of them in the small-scale category. Their total annual turnover is more than Rs 2,000 crore and they employ more than 2.5 lakh persons.

“During the last two and half months the imported brass scrape price has increased to almost to Rs 40 to Rs 315-320 per kg and Jamnagar imports around 95 per cent of scrap from Europe and America. A sharp increase in the value of the US dollar has also made Indian imports more expensive. Prior commitments mean that Indian importers have to pay much higher for their contracts”, said Jinesh Shah, managing director of Rajhans Impex Privet Limited.

“Global slowdown also affects the brass parts industry. Jamnagar exports about Rs 300 crore’s brass parts every year but due to last slowdown the export demand has decreased almost to 40 per cent in past six months. With this the domestic market is also weak”, said Virji Patel, vice president of JFOA.