SIVAKASI WEATHER
Chinese Bang Takes the Buck Out of Sivakasi Crackers

13-10-2015
13th October 2015

- The New Indian Express

Chinese Bang Takes the Buck Out of Sivakasi Crackers

CHENNAI: November 10 is Deepavali and India’s skies will light up with a million fireworks as it has done for decades. This year will be no different for the scores of households that set off those lights in the sky. But for the town that has traditionally made over 80 per cent of those fireworks, it will not be one of frantic enterprise and bustling activity. For Sivakasi, India’s ‘little Japan’, it will be the second consecutive year that sales have fallen, production has dipped as the Chinese dragon devours yet another piece of a limited market pie.

At least, that is what the industry fears. One of those fears has already come true. The last four months preceding Deepavali have always been the period when production at Sivakasi would be at over 90 per cent.

Three years ago, manufacturing units slashing production during this period would have been unthinkable. Which is why president of Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA) G Abiruben’s statement comes as a stark reminder of what two years have done to the industry. “We are currently producing only three days a week,” he admitted to Express. “Our capacity utilisation is currently at 50 per cent, at a time when it used to be 90 per cent just three years ago,” said G V Shyamsundar, director (sales), WeTwo Fireworks Industries. The reason is simple. There just aren’t enough orders. According to TANFAMA, order books have taken a severe dent. “The average fall across order books is over 30 per cent this year, compared to last year. Retailers are just not willing to give orders anymore,” said Abiruben.
At the core of the sales decline is the influx of illegal Chinese fireworks into the Indian market that started last year.

Considering that the fall in orders and sales was nearly 20 per cent last year, the industry is looking at a dip in Deepavali sales of almost 50 per cent.

While last year’s decimation of Sivakasi’s market share was caused by a very porous border, this year, the sales decline is largely because of another reason. “Retailers tell us that they are apprehensive of hidden stocks of Chinese goods flooding the market at the last moment. This is what happened last year and recently, during Vinayaka Chaturthi this year,” said Abiruben. Last year’s sales drop was also caused by initial inaction from the government — until Union Minister of State for Commerce and Industry Nirmala Sitharaman gave firm instructions to authorities to look into the matter.
This year, government monitoring of the influx has been far better. The Directorate of Revenue Intelligence and Customs department have seized several consignments of illegal imports from China and less than a week ago, Sitharaman tweeted that the DRI seized 285 MT of illegal firecrackers during August-September. A volume that is nearly triple that of what was seized (104 MT) during the whole of 2014-15. A large portion of these firecrackers were Chinese.

“The government has been incredibly proactive this year. There have been several raids and a lot of seizures. Nearly 50 containers of such fireworks were seized in the Mumbai Port recently. But retailers are worried about the goods that came into the country last year,” Abiruben said.

The effect that Chinese firecrackers on the open market have on their Indian counterparts is no secret. Not only are they cheap, up to half the price, they are also colourful and give a bigger bang for the buck. On the flip side, they are also several times more dangerous. The standard explosive substance used in Chinese firecrackers is potassium chlorate and perchlorates — both of which are banned in India due to their instability and explosive power.

While the extent to which Chinese fireworks enter the Indian market can only be perceived in the last two weeks before the festival, the effect they have had on the manufacturing base is already set in stone. The size of the industry is set to decline to Rs 4,000 crore this year, from Rs 5,000-plus crore two years ago. And Sivakasi’s workers are working half the time and taking home half the pay.

For Sivakasi, this Diwali is already a pretty dark one.


News & Events
top