Tuesday, May 04, 2010

Double whammy for salt industry

Express News Service: Rajkot: Tuesday , May 04, 2010
Two units shut shop, rest cut down production as export cost increases
Dwindling prices coupled with an increase in export costs has led to a piling up of a huge stock of salt in the Saurashta-Kutch region, which accounts for 70 per cent of the salt production in the country.
With the industry forced to cut down on production, a couple of units at Karoda village in Bhachau taluka have already shut shop.
Salt Manufacturing Association president Babu Ahir said: “Salt prices have gone down drastically, but salt manufactures can no longer afford transportation charges for export due to the hike in fuel prices.” He added: “At the same time, there are not enough railways wagons available to supply salt in the domestic market.”
As a result, 35 lakh tonnes salt have piled up, which is 10 lakh tonnes more than the annual export figure of 25 lakh tonnes.
According to Ahir, there are 14 factories, over 100 big pans (spread over 100 acres) and 6,000 small pans (with area less than 10 acres) in the four districts of Kutch, Patan, Surendranagar and Rajkot. The industry is a source of livelihood for nearly one lakh unskilled labourers.
In the last four months, the price has come down from Rs 600 to Rs 125 per tonne. Salt manufacturers said this was despite the fact that their current cost of production is Rs 225 per tonne.
After the increase in fuel prices, export on ship has become costlier by 10 dollars per tonne. Besides, the availability of only 60 rakes against the 150 required per month has drastically affected transportation in the domestic market, leading to an increase in the stock. Now, the factory owners are left with no option but to cut down on production.
Ahir said: “Instead of seven days a week, most factories are now functioning on four days and a few have reduced their working days to just two.”

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