Chinese subsidies revive Saurashtra ceramic industry

Thu, Nov 5 01:50 AM

A year ago, the ceramic industry, concentrated in Saurashtra's Morbi-Than area, was on the verge of closing down. However, in November 2009, a shift in China's policy towards the industry succeeded in reviving it and the industry has now seen as many 45 new units come up in the area. Morbi-Than's 500-odd ceramic units, account for 60%of ceramic production in India.

A number of incentives, coupled with the withdrawal of various subsidies by China, had now made it possible for Indian ceramic manufacturers to compete in international markets. The result is that export figures since the beginning of the second quarter have more than double, compared with last year's figures.

"Fuelled by domestic and international demand, the ceramic industry has been improving. Opening the real estate market has provided a solid domestic platform, thus increasing exports. Also, the weak demand from China has opened up overseas markets for the industry,'' said Karshan Adroja, president Morbi Tiles Manufacturing Association.

"With the Chinese government withdrawing various incentives and subsidies in fuel and raw material, Indian manufactures have benefited a lot. Chinese goods always have an edge since they are cheaper. But now, Indian products are giving them tough competition," said Sailesh Vasani, MD, Itallica Floor Tiles.

According to figures provided by the customs and excise department, in May the export of sanitary wares touched Rs 1,354 lakh, while figures for July have crossed the Rs 1,400-lakh mark. Figures for the same period last year stood at Rs 650 lakh and Rs 750 lakh, respectively.

"There have been no new demands as overseas markets are still recovering from the effects of the slowdown. However, the increase in exports only indicates that Indian manufactures are eating away from the Chinese pie," Vasani added.

The soaring demand in the domestic market has proved a boon to the industry. "We were running at 30-40% of our total production capacity, but now most of the units run at over 60-80% of their capacity," said Devrambhai Patel, Surya Ceramics.

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