Amid the slowdown of the past two years, the brass parts industry of Jamnagar is waging a battle for survival, with the Jamnagar Factory Owners' Association (JFOA) demanding cluster status and seeking government support.
Industry representatives said domestic demand for brass parts has fallen by about 25 per cent, and this has been compounded over the past year by fluctuations in raw material prices and the rupee.
Brass scrap, most of which is imported, forms the bulk of the raw material needed by the industry. Brass parts are used in the electronic goods, real estate and automobile industries.
"The situation is not favourable. For the last two years our business has been going down and if the industry does not get support from government, it may not sustain for long. Many things have gone against the industry, like volatile prices of brass scrap and the rupee fluctuation," said Lakhabhai Keshwala, president of JFOA.
Recently, a JFOA delegation under the leadership of Jamnagar Member of Parliament Poonamben Maadam met Union Finance Minister Arun Jaitley and sought cluster status for the area's brass parts industry.
Keshwala said, "Making a cluster or special zone in Jamnagar for brass parts will give backup to the industry and government should consider it seriously. Otherwise the brass industry will not survive for long."
The industry imports about 80 per cent of its brass scrap requirement. It needs about 250 tonnes of scrap a day in normal conditions but currently consumes about 150 tonnes daily owing to lower demand.
"After the Janmashtami festival, there were some good orders but soon after demand has decreased almost 25 per cent. Currently, export orders are giving some support to the industry, though it is not enough for survival," said Ramjibhai Patel, a board member of JFOA.
Many buyers have also cancelled orders after scrap prices declined, and this has hurt smaller players. According to Keshwala, when the scrap price falls, buyers demand discounts on finished products, but manufacturers cannot offer discounts, having bought scrap earlier at higher prices. Currently, the brass scrap price is Rs 325 per kg, down by Rs 25 per kg in one month.
There are 4,000 brass-making units in Jamnagar, over 80 per cent of them in the small-scale category. The industry employs over 200,000 people, directly and indirectly. Its annual revenue was about Rs 2,500 crore four years ago, but fell to Rs 1,900 crore in 2013-14. Industry officials reckon that in the current financial year, it may not reach even this mark.
