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By Tileswale
Your next tile purchase might put a hole in your pocket!
The Russia-Ukraine war has disrupted all commercial ties between the world and the two countries. The entire world has been badly affected by the consequences of such lethal war conditions but the most affected industry is Ceramic-Tiles Industry.
The cost of producing tiles is primarily comprised of soil material (mainly clay) and natural gas. While the main component is the soil material, natural gas accounts for 30-40% of the production cost. Every day, the industry consumes approximately 70 lake cubic meters of gas.
Results of Natural Gas Shortage
The Indian government imports a substantial part of its gas requirements from Russia. The clay is imported from Ukraine. Currently, all routes of international trade with Ukraine & Russia are closed. This will force the Indian government to revise the prices of natural gas and most probably the prices of clay alternatives will also see an all-time high. It is believed that prices of tiles products can increase anywhere from 20% to 40%. This can damage the natural flow of the market and affect small businesses.
Purchase Well In Advance
All of these factors will have an impact on Morbi's ceramic industry too, raising tile market prices in the end. As a stakeholder, Tileswale believes that taking a proactive approach and purchasing tiles and related products early on will be beneficial.
Tileswale has all of the products at the best prices and in the best quality.
Purchase now! All your ceramic tile products before the market prices skyrocket.
Revision in Gas Price under the Gas Sales Agreement ("GSA")
On account of substantial increase in natural gas price in international markets, company has revised the industrial gas price for MGO Agreement with effect from 1 November 2021.
According to the Morbi Ceramic Association, the price of natural gas, which was available at Rs 37.20 in 2017, has so far fluctuated approximately 98 times. Natural gas prices have been rising steadily since August 2021, especially after the second wave of the Corona epidemic. And the natural gas, which was available at Rs 36 till August 2021, has reached Rs 63 today and the ceramic industries have been hit hard. The sudden increase in prices has made it difficult for domestic and export orders to be fulfilled. If the gas company informs about the price hike in advance, the ceramic industry will definitely not face an unforeseen calamity. At present, the exports of the ceramic industry are declining and it is time to bear the brunt of rising gas prices.
On the other hand, the official sources of Gujarat Gas Company said that the price of natural gas is continuously increasing due to increasing demand from abroad in the international market. Says to be. In addition, falling prices in the international market are promising to reduce the price of gas.
Morbi is the largest manufacturer of ceramic tiles. It’s unfortunate to see that even after being the largest contributor in the manufacturing and taxes of ceramic, the current situation is not good.
Tiles manufacturers in Morbi are not happy with recent price hikes of gas by GUJARAT GAS company. In other regions of Gujarat, the gas price is around Rs. 10.50, while in Morbi, the gas price is somewhere around Rs. 55.
There is no accurate data for whether manufacturers are getting sufficient gas from the company or not. According to Morbi city and Jilla Grahak Suraksha Pramukh, Laljibhai Mehta, there should be a committee organized by Prime Minister Narendra Modi to discuss & investigate further on the issue.
Natural gas is used in ceramic manufacturing. And, with the constant rising in the prices of natural gas, so many ceramic factories have been shut. Besides increased gas prices, manufacturers aren’t getting essential facilities.
President Laljibhai Mehta and Minister Ramabhai Mehta said, “If the government wants to keep the ceramic industry in Morbi stable, then proper facilities should be given to manufacturers. If this won’t happen, ceramic tile manufacturers would be in trouble.”
The price of natural gas used in Morbi's ceramic industry has been increased by the gas company and currently the price has been increased by Rs 10.2 per cubic meter with tax which the ceramic industry cannot bear the price increase so that Morbi's tiles will become more expensive in the coming days. It would not be a surprise if the shutdown is a major relief to Morbi's ceramic industry, even if the government is cooperating with other industries to sustain itself, just as it is reducing profits on gas prices to sustain the ceramic industry.
The price of natural gas used as fuel in Morbi's ceramic industry is being increased by the gas company continuously and overnight which is increasing the difficulties of the ceramic industrialists as most of the industrialists supply goods to the traders by taking orders in advance. As the cost of tiles has been fixed, then the sudden rise in gas prices is a far cry from the profits for the industrialists who have to trade at a loss.
Talking to Mukeshbhai Kundaria, President, Morbi Ceramic Vitrified Tiles Assoc. Rs 5 so that the cost of Morbi ceramic tiles will go up and some factories have been shut down at present. However, sources said it would not be a surprise if more factories close in the future. The overload will increase
Talking to Nilesh Jetpariya, President, Morbi Ceramic Wall Tiles Assoc. If the price hike is announced months in advance, the industrialists can plan accordingly but the price hike is done overnight so that the traders who have ordered goods from different states of the country as well as from foreign parties four to five months ago have suffered huge losses so far. Those who used to get MGOs at a price of Rs 7.5 per liter without gas tax will now get a new price of Rs 7.31 and it will also be taxed on them, making it difficult for the industrialists to survive.
The Gujarat Gas Company has hit the Morbi's ceramic industry, which is in the grip of a recession. It is to be noted that a month ago, Gujarat Gas Company paid Rs. This is the second major price hike after an increase of five.
More than 1000 ceramic factories in the global ceramic hub Morbi have been hit hard by the Gujarat Gas Company.
According to the Ceramic Association, by Gujarat Gas Company, Ta. Unbearable price hike has been implemented from 5th October. Earlier, natural gas prices were Rs 37.36 without tax. While the new price of 47.51 MGO has been given an increase of Rs.19.75 without tax, i.e. with tax, without giving a single minute of time overnight, which is totally inappropriate, said the ceramic industrialists.
In the first phase, more than 200 factories producing 18 × 12 size will not produce. Proposal to close other units after meeting in short time.
Morbi: With the raw material of ceramic hub Morbi in good condition, the industrialists have been shocked to see a huge increase of Rs 5 in the price of pipeline gas after raw material and decided to close all wall tiles factories for the next one month and cut production as per demand and supply rules. Is. Currently 200 units making 12 × 18 size will stop production and in the near future all wall tiles units will also stop their production.
Following the price hike in natural gas, an important meeting was held yesterday under the chairmanship of Nileshbhai Jetpariya, President, Voltiles, Morbi Ceramic Association.
It is to be mentioned that earlier the manufacturers of Nano and Double Charge Tiles have voluntarily shut down and now the production has stopped completely.
In addition, Morbi Ceramic Association wall tiles President Nileshbhai Jetpariya added that all the factories have decided to stop production to adapt to the demand and supply norms in the market and a new movement will come in a month after the finished product is disposed of. Producers of 12 × 18 sizes are currently shutting down production and a meeting will be held in the coming days to close other sizes of wall tiles units.
It may be noted that rising natural gas prices have put a burden of more than Rs 100 crore a month on ceramic units. Nileshbhai also hinted that it would be difficult for the industry to cope with the recent hike in raw material, diesel and truck fares, adding that it would not do MGOs with the gas company in the coming days.
New price applicable from tomorrow: Now the price of one cubic meter of gas, if there is a three-month agreement, will be Rs. 37.51 and if there is a one month agreement then Rs. 38.01
Morbi: Morbi's ceramic industry is in a state of thirteen breaks in one joint. At present, the ceramic industry is making strenuous efforts to reduce its cost in order to establish itself in the global market. A challenging announcement for the industry in Teva today has been made by a gas company. The gas company has fixed the price of gas at Rs. Entrepreneurs raising Rs 4.37 plus tax have become concerned.
Morbi's ceramic industry has carved out a niche for itself in the global market. Moving forward, even staying afloat, has become as daunting for the industry as chewing iron chickpeas. This is because the price of gas, which plays the most important role in the cost of ceramic products, has skyrocketed. The gas company today suddenly raised Rs. 4.37 plus tax i.e. Rs. Prices of more than 5 have skyrocketed.
The increase is set to take effect tomorrow, August 24. So from now on, if the gas price is a three-month agreement, it will be Rs. 37.51 per cubic meter and if there is a one month agreement, Rs. 38.01 per cubic meter. Morbi's daily gas consumption is more than 7 million cubic meters, which would add about Rs 100 crore a month to the ceramic industry.
What to do now with an earlier order? : Nileshbhai Jetpariya
Nileshbhai Jetpariya, president of the Ceramics Association, told that gas prices fluctuate in the international market. But Gujarat Gas should increase the price every three months and inform about the price increase one month in advance. So that industries can take new orders keeping in mind the new cost. He further said that due to the sudden price hike, the industries are losing 6 months of profit. In the end, they asked the question that if Gujarat Gas has announced an immediate price hike, what will happen to the industries that have taken orders keeping in view the old cost?
What does a three-month agreement mean if you want to increase or decrease prices at any time?
Gujarat Gas's sudden price hike has sparked outrage among industrialists. Businessmen are saying that the gas company has a three-month agreement. However, the company announces price hike at any time. Therefore, it is doubtful that the gas company will not buy gas from the international market for three months. If it buys, the gas company can supply gas at the old price even if the price goes up in the international market as there is an agreement for up to three months.
After double charge and Nano, now Waltiles and GVT units are also feared to shut down.
As many as 85 units of the double charge as well as Nano have been shut down for 1 month due to current production and demand. There are fears that the price hike of the gas company will lead to the shutdown of wall tiles as well as GVT units in the near future. If these units are shut down, it will be the turn of the ceramic sector to suffer extensive damage.
Gujarat Gas Limited on January 29th 2020, have hiked gas price by Rs. 5.30 per square cubic meter thus affecting the Ceramic Industry in service majorly in Morbi, the hub of Ceramics Industry in India, situated in the Saurashtra region. The industry is expected to face the brunt of this recent hike. Meanwhile, this is the second hike by the Gujarat Gas in as many consecutive months, in December there was a hike of Rs. 4.50 taking the overall rise of price to Rs. 10. The new price is expected to take effect from February, 2021.
Earlier, before the hike in price on December 29 which was due to the reversing of the discount of Rs. 4.50, the financial burden amounted to nearly 100 crores per month to the industry. And with this hike of Rs. 5.30 in such a small period of time, the implications may result to a daily loss of Rs. 3,97,50,000. This increase is next. Going to apply from 1 February. After this increase, the ceramic industry will get Rs. 35.10 per cubic meter. It was expected that, by 1st February with the Union Budget, the gas prices might be slashed and the industries will have some respite, but with this sudden and unexpected hike before the budget many industry might not even see it trough to that period.
Natural Gas being the most important element during the production of Ceramic products, the consecutive hikes in the price has stifled the Ceramic industry as a whole. Due to the price change an amplified prediction is that, around 30% of Wall Tiles industry might shutdown production due to financial overburden.
Nileshbhai Jetpariya, president of the Ceramics Tiles Association, expressed his concern over the situation. Generally, the big companies have an extra stock of finished goods of nearly one and a half months, and its is majorly the smaller units which will face the heat from this decision. He also conveyed that, the price hike could have very well been informed giving a prior notice of at least a month so that the industries could manage their new order depending upon the new rates. But in the current scenario its he was afraid of uncertainty surrounding fate of the industry.
Gujrat Gas Limited being the sole provider of natural gas to the 1000+ Ceramics Tiles Industries in Morbi, Gujrat, has raised the price in wake of global market volatility of the Natural Gas Prices, as quoted by a spokesperson of the GGL. He also quoted that, in light of shortage and instant doubled price of the LNG the increase in price was more of a forceful repercussion. GGL however, has committed to ensure a constant supply of Natural Gas to the industries to minimize the unsteadiness caused due to this recent price change. It is to be noted that with over Rs 45000 Crore turnover and an export revenue of about 12000 crore the Gujrat Ceramics industry has been thriving in the past year. And due to China’s reputation taking a dent due to Covid, Indian Ceramic player managed to take advantage of the situation; it will not be too late to witness what this hike does to the industry and how far or how long does the industry take to bounce back from it.
Tags:- Ceramic Tiles Gas Price, Gujarat Gas Price, Tiles Gas Price, Ceramic Gas Price Hike, Gujarat Gas Price Hike, Tiles Gas Price Hike
Article Updated:- May 05, 2022
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