40% reduction in demand; industry edgy about slow biz prospects: Assocham survey.
Expect lesser fumes this Diwali.
Greater environment awareness, rising prices of firecrackers and rampant 'Say no to crackers' campaigns have taken their toll on sale of firecrackers. Demand for fireworks is likely to fall by 35% to 40% this year, revealed a recent survey by Associated Chamber of Commerce and Industry of India (Assocham). The apex industry body interacted with 250 firecracker manufacturers in Sivakasi, Tamil Nadu and 500 fireworks' dealers, traders, shopkeepers and retailers in Ahmedabad, Bangalore, Chandigarh, Chennai, Hyderabad, Kolkata, Lucknow, Mumbai and Pune during September to October 15 to gauge sentiments in domestic firecracker industry.
Spike in fuel prices, increased road freight, escalating raw material (sulphur, potassium and nitrate and waste paper) prices due to shortage have led to slump in profits for the firecracker industry. "Also lack of skilled labour, rising wages, miscellaneous levies and recent bomb blasts have also impacted margins," said Bhagyesh Soneji, chairperson, Assocham Gujarat. A 30% to 50% increase in cost of crackers over last year is expected this Diwali, informed Soneji. "But Diwali is known for its lights. People are not going to call off their celebrations just because of price rise. A cut in budget (for Diwali shopping), however, is expected. This can dampen the festivities," she added.
According to Assocham, the Rs1,200-crore domestic fireworks industry has in doldrums since last couple of years. Firecrackers hub Sivakasi has seen a 15% drop in demand from northern states of the country which account for 75% of total sales. The town is home to over 9,500 firecracker factories employing 1.5 lakh people in organised and unorganised sector. Almost 55% of total trade is wholesale. Majority of firecracker manufacturers in Sivakasi said cost of production have gone up by about 25% to 30% this year due to rising overheads and skyrocketing prices of raw materials.
A 35% increase in production of smokeless firecrackers was also observed. These lure the 'green' buyer as they are less noisy and emit smoke free from chemicals.
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