There would be impact on these employees as well as auxiliary units, too.
The spectre of permanent closure hangs over nearly 150 units in India’s largest ceramic cluster near Morbi town in Gujarat due to a recent order of the National Green Tribunal (NGT) to shut all these units that run on coal gasifiers and switch over to natural gas.
On March 6, 2019, the national watchdog on environment had ordered a shutdown of all ceramic units. The order given by the Delhi Bench of NGT came as major blow for the India’s largest ceramic cluster as nearly 400 of the 900-odd units immediately down shutters. However, within a fortnight, some of the units converted to natural gas but in the case of units which would be forced to close, it would be difficult to start the production due to financial constraints.
“More than 150 small factories, which were running on cheaper coal gasifiers, might be shut down permanently as they would have to incur investment of at least `3 crore to construct new kiln and other technological upgradations. Some of them didn’t have adequate land to match the length of kiln run on natural gas. Already land prices near Morbi and Wankaner towns, where most of these factories are situated, are exorbitant and these small players couldn’t afford it,” said Nilesh Jetpariya, president, Morbi Ceramic Industry Association.
Such closure would ultimately translate into reduction of production, said Jetpariya, adding that the state government as well as the central government should come out with measures to save small factories from closure. The other reason of dip in production would be higher prices of piped natural gas which is `35 per cubic metre, over 40% higher than coal gasifiers. In such situation, middle-level units which have migrated from coal to gas would reduce output.
“Going by these reasons, the production of Morbi ceramic cluster would reduce by 15% till the market would absorb increasing prices of ceramic products,” said Jetpariya. At present, Morbi clusters’ annual turnover stands at nearly `40,000 crore. India’s largest ceramic cluster gives direct employment to about 4 lakh people and 2,000 auxiliary units including paper mills, packaging units, ceramic machinery manufacturers and engineering units, among others. There would be impact on these employees as well as auxiliary units, too.