Export of finished products, import of raw materials hit by rupee volatility

Safety match manufacturers are sore over market uncertainty due to overproduction. Since heavy production is carried out in an unorganised manner, market is not adequately regulated.

Hence, the match manufacturers in Kovilpatti sought the intervention of enforcement agencies to check irregularities in production.

Many of those paying excise duty for production of matches in Kovilpatti felt there was a large-scale duty evasion and if it was ignored, the industry might be badly affected.

In view of an increased production cost, the manufacturers could not continue the business since a majority of the unorganised units had gained control over the market.

About half of the production was done on unlicensed premises by using manpower, unmindful of the safety risks. Owing to such uncontrolled production, real investors had to bear the brunt of market uncertainty, said the manufacturers.

J. Devadoss, secretary, South India Match Manufacturers Association, said on Thursday that many manufacturers had reduced production by 25 per cent as stocks to be marketed accumulated.

Export market had suffered a setback against a backdrop of slump in rupee value against the US dollar.

Fluctuating exchange rates in the international market in the recent days had slowed the export trade, and imports of raw material, mainly wooden logs, splints and other essential chemicals, turned costlier, he noted.

“Only when the rupee value is stable, safety matches export trade could bounce back,” Mr. Devadoss said.

A match box exporter said no order had been placed by importers over the past 20 days as market value could not be determined owing to fluctuating exchange rates.

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