The impact of coronavirus (COVID-19) that broke out in China, which mainly supplies the key raw material required for the safety match manufacturing industry, will cast a shadow over this sector, affecting the local economy in the southern region of Tamil Nadu.
J Devadoss, secretary, South India Match Manufacturers Association, Kovilpatti, said the impact of coronavirus epidemic has been catastrophic in China and such unhealthy situation resulted in shortage of raw material shipments from China.
However, it would not have an immediate impact on this industry, but could be after a month.
The industry is largely reliant on China, from where large quantities of rock phosphate, a key raw material, are imported to cater to the manufacturing needs. Though the raw material is available in Himachal Pradesh, it’s not adequate enough to suit the requirements of the manufacturers. Of the total production, a sizeable quantity of about 25 per cent is exported to African countries in about 150 to 200 containers a month, Devadoss said.
R Gopalsamy, vice president, National Small Match Manufacturers Association (NSMMA), Kovilpatti, said apart from rock phosphate, China is also relied upon for other raw material such as wood and papers for making matchsticks.
Though the softwood species are largely available in Belgium, the required volume is normally imported from the Port of Antwerp. Such timber cargo is normally transhipped through China. But, since cargo vessels had been skipping China in the wake of the epidemic, the situation raised concerns among the match manufacturers about the future.
Container shipments have been disallowed from China and it would remain in effect until April end. The consignment of raw material was lastly shipped from China on February 15. There would be no shipments from China in the coming days. On a monthly average, 200 containers of timber logs are imported. However, the manufacturing could be managed for the next 15 days or up to a month with the available raw material stocks.
About 70 per cent of the ‘matti’ wood species grown in Kerala is contributing to this manufacturing sector and 30 per cent of wood species is imported from Belgium. But, the manufacturers fear that decline in timber import would trigger demand for the ‘matti’ wood species and lead to price hike. On the other hand, exports have increased by 20 to 30 per cent over the previous fiscal year, he said.
Though production and sale was decreased by about 20 per cent, exports showed signs of improvement, M Paramasivam, president, NSMMA, said. The handmade sector of this industry was facing extinction as manual workforce had been shrinking day by day.
Only those in the age group of 40 to 50 years are turning up for match box filling and packaging. Nearly, 1,000 handmade units existed years ago, but it has come down drastically to 400.
Since the workforce was not content with wages, they opt out for better prospects. If wages are hiked, then the production cost would jump and finished goods could hardly compete in the market.
Since partially-mechanised manufacturing units had been relying on the handmade sector, the situation tends to shake down such units. Except for fully-mechanised units, other sectors are not enterprising. Hence, many stakeholders are making a transformation from semi to fully-mechanised units for survival.
Adding to woes, he said a corporate giant is attempting to monopolise production with the aid of mechanisation. Further, he said the corporate company had already started its venture in eight states, including Tamil Nadu. Therefore, lowering of GST would be the only relief for the manufacturers, he opined.