Cracker hub of Sivakasi stares at another 'dud' Diwali

Cracker hub of Sivakasi stares at another 'dud' Diwali

The word Diwali used to light up the faces of people in Sivakasi, be it fireworks manufacturers or labourers working in their factories, for the huge business or income that the festival brought to them.

But, cases seeking ban on sale of crackers across the country in a bid to tackle pollution and a general decline in the craze for firecrackers in the past few years has put the once-thriving industry and its dependent workers on the edge.  

The Diwali of 2018 presents a different picture.

Production was affected for more than a month due to a strike demanding government’s intervention in “saving the industry” and seasonal rains leading to losses.

Not just that, the manufacturers have reduced the production capacity due to lack of advance orders from wholesale dealers owing to uncertainty on sale of crackers in view of the pending cases.  

The industry, which is pegged to be valued around Rs 6,000 crore, might suffer losses between Rs 1,200 crore to Rs 2,400 crore due to the prevailing uncertain situation, manufacturers claim.

They were expecting that the Supreme Court, which has reserved its verdict in the case demanding ban of crackers across India, to deliver its judgement by October first week so that there is clarity on the issue.

The industry suffered huge losses in 2017 after the Supreme Court banned sale of crackers in the Delhi-NCR region at the last minute with the whole sale dealers bearing the brunt.

Though, technically there is no ban this year, wholesale dealers in the Delhi-NCR region have refrained from placing orders due to apprehension that the ban could be enforced yet again at the eleventh hour.

However, wholesale dealers in other parts of the country have purchased goods, but it is far less than the quantity that manufacturers sold before the cases were filed.

“The case seeking ban on sale of crackers across India has wrecked the lives of both manufacturers and workers. As a result of the case, manufacturers witnessed 30 to 40% decline in crackers’ orders across the country and produced only 60% of fireworks as against their capacity,” K Mariappan, General Secretary, Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA), told DH.

The fireworks industry, which begins production of crackers with the advance money given by wholesale dealers, took the risk of manufacturing fireworks despite less orders by pooling in its own resources, including availing bank loans, this year.  

G Abiruben, Managing Director of Ayyan Fire Works, said no wholesale dealer from Delhi-NCR region has bought firecrackers this season.

“By this time, we would have completed our dispatches to north India and focussed our mind on the business in the southern states. None of the five wholesale dealers from Delhi-NCR region, who have been our customers for decades have placed orders this time. This is certainly a loss for us,” he told DH.

P C A Asaithambi, President of TANFAMA, feels there will be no respite for the manufacturers even if the top court takes a view favourable to them.

“Since the production came down this year, most of the crackers have been sold out. Even if the verdict is in favour of us, many companies would still be affected. Only big companies that have enough stock of crackers will be able to dispatch them. Small companies that are entirely dependent on the region will face huge loses,” Asaithambi said.

On the sales outside Delhi-NCR, P Ganesan of Sony Vinayaga Fire Works said though most of the crackers that were in stock have been sold out, the quantity cannot be compared to previous years.

“If the verdict was out and there was clarity, this could have been a much better Diwali. Every manufacturer reduced their production capacity since there was much confusion and this has resulted in losses. We hope that the Supreme Court considers the lakhs of workers who are dependent on the industry while taking a view on the petitions,” he said.

Some crackers are produced only to cater to the Delhi-NCR market and many companies have almost stopped manufacturing such items due to uncertainty.