The firecracker industry in Sivakasi, in interior Tamil Nadu, from where 95 per cent of the Indian output comes from, has said production has declined 20 per cent this year.
The industry says this happened despite a good flow of orders, due to successive accidents and consequent raids to check irregularities, because of which the government agencies have tightened the rules. The industry has also said the tiny town, which exports 300 containers of crackers every year, is now diverting export orders to China.
The Sivakasi cracker industry is estimated to be worth around Rs 1,500 crore and employs around 300,000 people directly and indirectly.
A Asaithambi, president, Tamil Nadu Fireworks and Amorces Manufacturers' Association (Tanfama), said two accidents in the past three months had put the industry on the backburner. "There is too much restriction from government agencies, which has caused a drop of 20 per cent in production."
The blast at Sholavandan railway station near Madurai that claimed two lives has resulted in intensified vigil against unauthorised transport of fireworks by road and rail. The industry also lost close to 25 crucial working days due to an early Deepavali.
"The industry that witnessed 15 per cent growth year on year is likely to remain at the same level of last year," said Asaithambi.
G Ashokan, chairman, We Two Fire Works noted the police licence for setting up retail shops to sell crackers was till last year given in June. This year, it was given only in the second week of October. This is one major reason for the drop in the order book. Order from petty shops, which constitute 60 per cent of the order in terms of size has come down. "This year selling point is too weak," said Ashokan.
Compared to last year, said Ashokan, prices of crackers have dropped by 10-15 per cent, mainly due to drop in raw material prices. For instance, the price of aluminum powder, a key one, has dropped to Rs 120 from Rs 160. "This benefit has been passed to the customers."
On the export market, Ashokan said, Sivakasi used to export 300 containers of crackers every year to Africa and Europe till five years earlier. These are now going to China. Ashokan's company got an order to supply two containers for crackers to Europe but has kept the containers idle for a year, since it couldn't get No Objection Certificates for the transshipment at Colombo or Singapore. "Even the Indian ports are not allowing crackers to be exported."
The industry has taken up the issue to the government and the ministry of shipping has promised it would take steps, added Ashokan.
