Real estate projects to face delay if shutdown in Morbi continues

Nov 30 2013, 04:15 IST
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SummaryReal estate developers in Gujarat are fearing inordinate delays to their residential and commercial projects if the on-going self-imposed shutdown of 600 ceramic units in Morbi continues for too long.

Real estate developers in Gujarat are fearing inordinate delays to their residential and commercial projects if the on-going self-imposed shutdown of 600 ceramic units in Morbi continues for too long.

Within a week, ceramic unit owners are expected to stop supplies, which will adversely impact several construction projects that are nearing completion.

The local construction industry in Gujarat sources ceramic and sanitary wares worth over Rs 2,200 crore every year from this ceramic cluster in Morbi where about 600 units have downed shutters protesting over a number of issues including high Piped-Natural Gas (PNG) prices.

“If the strike continues then the possession of over 10,000 housing units in Ahmedabad alone is expected to get delayed. These housing units are just 2-3 months away from completion,” said Jaxay Shah, vice-president of Confederation of Real Estate Developers Association of India (CREDAI) and a developer based out of the city.

“We are keeping a close watch on how the situation in Morbi pans out in the coming days,” said Shah. The local construction industry sources vitrified tiles, wall tiles, floor tiles, sanitary wares, porcelain, mosaic and roofing tiles from the ceramic industry in Gujarat.

According to Chuni Patel, general secretary of the Morbi-Dhuva Glazed Tiles Association that gave a call for an “indefinite shutdown” on Wednesday said the supply of all ceramic products to the domestic and foreign markets will cease within a week’s time.

“We have already stopped our production. If no solution is found, all supply of products - including exports - will cease from the midnight of December 3,” said Patel who feels that the industry has been waging a “penny-for-penny” battle against Chinese products that has been flooding the Indian market. “All we are seek is a bit of support from our government,” he added.

This stoppage in supply is likely to adversely impact the real estate projects in south India and western region. Every year, the ceramic units in Morbi produces Rs 22,000 crore worth of products (branded and non-branded). Of this, 70% of the products is supplied to states like Kerala, Tamil Nadu, Karnataka and Andhra Pradesh in South and Gujarat, MP, Rajasthan and Maharashtra in the West.

However, experts feel that the current shutdown in Morbi will directly benefit the Chinese ceramic industry against whom manufactures in Gujarat have been waging a price battle. “The spiralling effect of the shutdown in Morbi could have an effect on the kind of products used by

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