BS: What is the present status of aluminium utensils industry ?
Sunil Shah: The aluminium utensils industry today is largely under the `small-scale and `tiny sectors. Except for one or two units, which can be said to be medium/large-scale, the industry consists of numerous small scale units spread all over the country.
Among the consumer durables, utensils and appliances such as pressure cookers, form an important part. Aluminium utensils are traditionally preferred by certain communities in India, as it is a virgin metal as distinguished from alloys like stainless steel and brass. Apart from the cost factor, aluminium is excellent metal, because of its high conductivity and distinctive functional properties, such as uniform dispersal and longer retention of heat. It is a fact that aluminium utensils/vessels will cook food faster than that of stainless steel.
Although the utensils industry caters to a very vital need, no special status has been accorded. Furthermore, even though organisations, such as the Bureau of Indian Standards (BIS) exist and standards have been formulated for the basic metal as also for utensils and numerous other items, adherence to such standards in the domestic market is not mandatory.
Therefore, an overwhelmingly large percentage of units do not take up the scheme of BIS (ISI) certification, because it also involves adherence to certain prescribed standards in the matter of raw material etc., which may not always be convenient, particularly to the unorganised sector. The result is a free for all situation. The government has not been able to give adequate attention to this even though aluminium utensils are required to adhere to the right quality and right metal composition, as otherwise it becomes a health problem. Furthermore, in the case of pressure cookers some measures to ensure standards are absolutely essential as the safety-factor is also involved.
BS: How do we fare on the exports of aluminium utensils?
SS: India has been traditionally exporting aluminium utensils, during the past several decades to the Gulf countries and certain parts of Africa, as also countries like Fiji. These utensils have been in demand in developing countries.
There is also demand from areas with a sizeable ethnic Indian population such as South Africa and Mauritius. In the early years, the items in demand were of a rudimentary nature, such as topes with certain specified shapes. Indian exporters were quick to adapt to the requirements, with the result that now exports, particularly of preferred shapes in certain Arab countries, have done well over the years. With the independence of several Arab and African countries and the consequent attempts at industrialisation, many of these countries have established their own utensils industry, mostly for manufacture of aluminium utensils. This, in turn, has adversely affected our exports, more so as these countries have imposed a protective duty on such imports, to safeguard their domestic industry. However, utensils of certain shapes, which involve intensive skilled labour, such as items involving the spinning process, viz: kettles, spittoons, kavadani, etc., which require skilled work to attain the desired shapes are
exempt from such duties. So also, some of the Arab countries prefer ornamental designs on the exterior surface of items for which the labour in these countries is not yet trained to undertake these jobs; hence import of such items continue from India.
In recent years, the more sophisticated types of aluminium utensils, combing functional utility with aesthetic elegance are in great demand. Even countries like the U K, with a significant Indian population, has demand for such items which consist of pressure cookers and non-stick cookware as also tableware such as frying pans, casseroles, saucepans etc.
The demand for traditional items may not go up substantially. With the population growth all over, the demand for utensils will also increase. It can be said that there is a growth of about 5 per cent in exports of aluminium utensils from India.
Unfortunately, the traditionally and habitually revenue-oriented government departments such as the Customs and Central Excise, though they are doing a magnificent job, are saddled with additional duties of regulating and supervisory exports, where there is no direct revenue to these departments. This also applies to the Duty Exemption Eligibility Certificate (DEEC) scheme, where imports of raw materials are allowed duty-free and exports of good made from such material are exported, conforming to certain norms laid-down in the Exim policy. The revenue-oriented departments generally have a tendency of taking a negative view, which tends to hinder exports.
BS: We have allowed the export of aluminium ingots (basic raw material for aluminium utensils manufacture) on the one hand, while the same ingots are imported by the Indian aluminium utensils manufacturers on the other. Please comment ?
SS: India has vast reserves of aluminium bauxite estimated at 3 billion m/ts. Therefore, it can be a major producer of primary aluminium. Tremendous potential exists. However, our primary aluminium production is just about half a million tonnes per annum, spread over four main smelters. Aluminium production involves substantial quantities of electric power, which is literally a raw material in the production of primary aluminium. Unfortunately, our state electricity grids are not in a position to meet this demand at all, let alone at competitive rates.
Therefore, many of the leading primary producers such as Hindalco and Nalco, have set up their own captive power plants and these have been working very well. However, in order to compete in the international markets, the prices of primary aluminium must be competitive, as compared to the international prices. We cannot have high domestic prices and hope to successfully compete in the international markets for the products manufactured from such metal. It is precisely for this reason that aluminium utensils and articles exporters prefer to import aluminium ingots under the DEEC scheme, so that they get the benefit of international prices, which are very often lower than the prices at home.
BS: What are the other problems faced by your industry?
SS: It has been repeatedly suggested to the government and the primary producers of aluminium that a scheme may be evolved to supply indigenous aluminium at international prices to Indian exporters, so that the freight and insurance costs expended on imports under the duty-free scheme can be avoided and valuable foreign exchange saved. A suitable mechanism must be evolved, with adequate safeguards to supply such metal free of duty. For one reason or the other, mainly due to the so-called procedural hassles, this suggestion has not been accepted. On the contrary, the primary aluminium producers export ingots to other parts of the world at prevailing international prices. Hence, we have the phenomena of simultaneous import and export of aluminium ingots which no sensible person can endorse. There have been instances where our own aluminium imports exported by the primary producers have been imported under the DEEC scheme. However, the powers that be, seem to be unmoved and indifferent to the issue.
The disturbing fact is that exporters, instead of devoting all their energies for promoting exports are required to spend considerable time on chasing procedural hassles.
BS: What are the emerging trends in the utensils market?
SS: With increasing urbanisation and an ever increasing middle class, an improvement, or at any rate, an increasing, desire to shift from the traditional to more sophisticated is inevitable.
and is seen now.
This change is not always superficial but in several cases functional utility has been enhanced combining it with aesthetic elegance.
Therefore, such sophisticated designs in items such as saucepans, frying pans, casseroles, etc., will be in increasing demand, in the coming years. So also non-stick cookware with PTFE inside coating.So also, with the increasing working population, with large numbers of women working, appliances, such as pressure cookers generally made of aluminium, are also in increasing demand. It is no longer a sellers market, but a buyers market.
In order to attain optimum results and to serve consumers in the best possible manner, research and development (R&D) is an absolute necessity. Unfortunately, this aspect has not received the attention it deserves.
