Gas finds a big draw for units

IN FOCUS/TILES & CERAMICS

The tiles and refractories sector in the country is expectedly drawing up plans to capitalise on the energy opportunity provided by the recent finds of natural gas in different regions.

In areas where gas fields have been developed and are being tapped, the units located there have blossomed and turned out to be globally competitive, industry sources said. This phenomenon would be extend at locations where new gas finds have been located and identified for development and extraction.

The tiles and refractory sector was arguably one of the best uses for gas as a fuel on account of the high degree of value addition opportunities it offered using domestic raw materials, sources said.

It was also a sector with strong export linkages, yet backed by robust demand from the domestic boom in housing and core sector industries like steel, they added.

In southern India, for example, the availability of cheap gas from local fields have contributed to the success of companies like Boss Profiles.

"The Boss plant at Karaikal is getting clean gas at Rs 3.50-4 per cubic metre (cu.m) while the competition in Europe or the United States is paying the equivalent of Rs 9 per cu.m.", Boss Profiles managing director S Ghosh told Business Standard.

Companies like Boss, which produced top-end ceramic products for the building segment with high degree of value addition, were comfortably placed even is gas pricing was rationalised on the lines of the pricing of the Shankar Committee report on the sector. According to Ghosh, the pricing even then would work out to Rs 6-7 per cu.m.

Indian manufacturers have the advantage that Indian gas is clean and has a low level of contamination from heavy elements like sulphur that cause pollution and discolouring. The quality of gas helps in production of materials with a high shade of whiteness that is liked by buyers worldwide, says Ghosh.

The high cost of energy and the non-availability of gas as a fuel have choked the growth of the tiles and refractory sectors so long, along with other gas based industries like fertilisers, a member company of the Indian Refractory Manufacturers' Association pointed out.

The current generation of producers would face the problem of gas shortage on a sustained basis if they were located at places away from gas fields.