Fireworks’ industry stares at huge losses

For the third year in a row, the multi-crore fireworks’ industry based out of this town stares at losses worth hundreds of crores, due to a slew of factors, including lack of clarity on ‘green crackers’ that led to shutting down of factories for more than three months.

The industry has been encountering one problem after the other ever since it was dragged to the Supreme Court in 2015 for contributing to pollution in the national capital of New Delhi. The fireworks’ industry is estimated to lose anywhere between Rs 800 to Rs 1,600 crore this year, due to the shutdown from mid-November 2018 to mid-March 2019.

From small to medium to big companies – all have been able to produce only 60% of goods, as against their full capacity due to the shutdown.

Once the factories resumed work in March, after the Supreme Court accepted the definition of green crackers, the manufacturers had a different problem. More than 15 to 20% of the work force, which is estimated to be around 9 lakhs, have either migrated to other cities and town or have landed in illegal units.

The shutdown was utilised by illegal fireworks’ manufacturers, who operate from their homes, who not just absorbed the workforce but also raked in crores through illegal means, industry players complain.

“Usually fireworks’ factories work for 260 days in a year. This year we have worked only for 160 to 170 days and the loss of more than 90 days cannot be compensated. We can’t make up for the production loss since it is also done by human beings and not machines,” A P Selvarajan, Director of Sri Kaliswari Fireworks, told DH.

The industry’s worth is estimated to be anywhere between Rs 2,000 to 4,000 crore and the loss will be calculated on the basis of last year’s turnout. 

With more clarity expected on ‘green crackers’ and its future in November, when the Supreme Court takes up the matter again, fireworks’ manufacturers hope they will be able to produce crackers to their full capacity and make up for the losses in the past few years.

“If we take the industry’s worth as Rs 2,000 crore, we would have lost Rs 800 crore due to loss of production between mid-November to mid-March,” P Ganesan, President of Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA), said.

Selvarajan explained: “Our production is only 60% as against our capacity. Nearly 30% of the workers migrated to cities like Tiruppur and Coimbatore making it difficult for us to compensate for the loss. We had to struggle even to come to 60% due to a shortage of labour.”

Ganesan expressed the hope that production for 2020 Deepavali will begin by mid-November this year as it is now clear that only green crackers can be manufactured.

T Kannan, member of The Indian Fireworks’ Manufacturers’ Association (TIFMA) and director of Sree Balaji Fireworks, also admitted to loss of production.

“The 25 to 30% of production loss is a reality and no one can say there was no loss. The labour problem will be resolved only when the uncertainty around the fireworks’ industry ends. Unless there is some doubt, there will always be problems,” he said.