Granite industry in dire straits

High royalty, rising diesel price and hefty freight dash hopes of major players

December 26, 2021 01:08 am | Updated 01:08 am IST - ONGOLE

The year saw closure of a majority of the 1,500 cutter factories in the wake of hostile environment.

The year saw closure of a majority of the 1,500 cutter factories in the wake of hostile environment.

The granite sector was in the doldrums in 2021, thanks to ‘unimaginative” mining policy of the State government, hefty hike in ocean freights, and galloping price of fuel at a time when the sector was limping back to normal after the COVID-induced economic crisis the previous year.

Smarting under the impact of the lockdown and partial curfew imposed to combat coronavirus, the granite barons were hoping to meet the pent-up global demand for both natural and artificial stone material at Chimakurthy and other places in Prakasam district, which is home to the world-famous black galaxy granite, at least during the year after arranging vaccination for about one lakh migrant workers, a majority of them who had returned to work from northern States.

“The hopes of exporters have been dashed mainly due to logistic bottleneck. The granite barons are in a quandary due to high royalty rate charged by the government and unprecedented increase in the price of diesel,” according to a group of granite barons in the Building Material Special Economic Zone at Gullapalli.

With sufficient orders on hand from overseas players, the gang-saw units operating from Gullapalli produced during the year over 600 containers worth natural and artificial stone material. However, they could not ship them in time to overseas destinations as oceanic freight rates remained very high, laments N. Sudhakar, managing director of Satya Exports. They were forced to buy add-on products like insurance as well.

The container boxes were not freely available during the year. The number of vessels calling on Indian ports had come down as well following restrictions put in place in the wake of the pandemic in the European countries, explains Jyothi Granite Exports Chief Operating Officer M. Shivaram.

The shipping lines quoted up to five times the hitherto price of about 2,000 US Dollars. “We are hoping against hope for revision of the freight rates at least in the new year,” he says. It will be a herculean task to meet the export target of 20% over the exports worth ₹483 crore done by the units in the SEZ during the previous year in the present circumstances, they feel.

The year saw closure of a majority of the 1,500 cutter factories in the wake of hostile environment. Granite mining units, which have been paying royalty on cubic metre basis hitherto, were upset with introduction of new weighing system. The skyrocketing price of diesel during the year added to the woes. The year saw gang-saw units in SEZ pleading with the Centre to allow them to sell their products in the domestic market as well.

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