A MAJORITY of the ceramics units in Gujarat’s Morbi, which account for 90 per cent of the Rs 75,000 crore industry in India, on Tuesday declared a month-long shutdown over fuel shortages that went from bad to worse within a week of the blockade of the Strait of Hormuz by Iran following the commencement of war by US and Israel attacking the Islamic Republic that control the only waterway out of the Persian Gulf which exports 20 per cent of global oil.
A decision on the shutdown, taken at a meeting of the Morbi Ceramics Manufacturers Association on Tuesday, came on the heels of shortages in both of their major fuels – propane and natural gas. The industry will observe a closure till April 15, confirmed industry leaders.
Haresh Bopaliya, president of the Wall Tiles division of the Morbi Ceramics Manufacturers Association, confirming the shutdown till April 15, said that 450 of the 650 major ceramics units had already suspended production by March 17. It is mostly the ceramic units using Propane as primary fuel in their kilns that have shut down while many of those using Natural Gas are still running at half capacity, The Indian Express has learnt.
This is just on the 18th day of the conflict that began on February 28 and has cut off almost all the Gulf Cooperation Council (GCC) countries in the Persian Gulf from the nations importing their oil and gas.
The Morbi ceramics industry runs on two types of fuel: propane and/or natural gas. Consumption of Propane is an average of 55 lakh cubic metres per day in the industry and is used by about 500 units. Propane-LPG is delivered to these units in tankers through road transport by IOCL, BPCL and HPCL, via local traders. Consumption of Natural Gas is approximately 25 lakh cubic metres per day and is supplied to about 150 units through Pipeline by Gujarat Gujarat Gas Limited, a public sector company.
Speaking to The Indian Express, Sandip Kundariya, president of the floor tiles division of Morbi Ceramics Manufacturers Association said, “Almost all of the Propane supply to the ceramics industry stopped by March 10 and the last week was run on remaining stocks. The major Propane suppliers – IOCL, BPCL and HPCL – supplied fuel till March 3 after which they had to keep LPG stocks for household gas consumption according to the order by the Government of India. There’s a private company called Aegis, who gave supply till March 10. By this week, everyone’s stocks are almost finished.”
There are some units that have a natural gas pipeline as well as tankers to store propane. Those who had run out of Propane options but had PNG pipelines had then approached Gujarat Gas to give them supplies to keep their kilns burning. But Gujarat Gas on March 4, in a filing with BSE, invoked Force Majeure. Industry leaders said that since then, it was providing 80% supply of total unit demand, and only to regular customers.
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Asked about the supply of natural gas, Kundariya said, “Gujarat Gas was providing 80 per cent of demand put forward by each unit. Those who have completed their monthly quota by running a full cycle of production, have shut down, but those units who have reduced production, are still functioning at less than half capacity.”
The association met Gujarat CM Bhupendra Patel on March 10. On this, Kundariya said, “We recently met CM Bhupendra Patel, who assured us that the state would provide fuel but we decided that at the current international fuel rates, it would not be affordable to continue manufacturing as the rate of products cannot be hiked at the moment due to lack of demand. So the next logical step was to shut down for a month and observe the situation as it develops.”
This has led to an exodus of migrant workers from Morbi to their home states of Uttar Pradesh, Bihar and Jharkhand. There are more than four lakh workers employed in the ceramics industry in Morbi. However, not all workers are heading home. Unit owners told The Indian Express that they would take a maintenance break early this year instead of on Diwali. So workers tasked with these jobs will continue working in the factories.
The Indian Express had earlier reported that the ceramics industry in Morbi had already begun facing problems by March 3, following which 100 units had shut down by March 6, and 150 units had suspended production by March 9.
Brendan Dabhi works with The Indian Express, focusing his comprehensive reporting primarily on Gujarat. He covers the region's most critical social, legal, and administrative sectors, notably specializing at the intersection of health, social justice, and disasters.
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