Cracker manufacturers in Sivakasi, the fireworks hub of India, fear a massive setback to their business this festive season owing to the COVID-19 pandemic.
While it is business as usual for big manufacturers, smaller units are cutting down on production by 20%-30%. Manufacturers say the number of orders for Ganesh Chaturthi has not been good.
The Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA), which represents the fireworks industry, has sent a letter to Prime Minister Narendra Modi, requesting that the government announce that Deepavali celebrations would happen (with personal distancing norms, if needed).
In the letter, TANFAMA president P. Ganesan said, “Because of the pandemic and the lockdown, the industry is in panic whether Deepavali will be celebrated. This is the month when wholesalers and retailers place orders but all wholesalers, distributors, retailers are cancelling orders... This will result in a huge economic blow to all of these industries, resulting in closure and huge unemployment.”
There are about 1,000 licensed cracker units in Sivakasi, which account for a market size of ₹2,500 crore-₹3,000 crore. The industry employs over 3 lakh people directly, and over 5 lakh indirectly.
Mr. Ganesan, who also runs Sony Fireworks, said that with minimum staff, he is making only 70% of the crackers on his premises. “As of now, we are optimistic that Deepavali will happen this year. But if it doesn’t, the industry will collapse, stocks will pile up and there won’t be any fresh orders for 2021. This will, in turn, lead to job losses and factories being shut,” he said.
A few firms under the TANFAMA umbrella have submitted cracker samples to the National Environmental Engineering Research Institute (NEERI), part of the Council of Scientific and Industrial Research (CSIR), to check whether the emissions will help in containing COVID-19. “There is a theory that a few insects like mosquitoes get killed because of the emissions. So we have sent some samples and we will know the outcome over the next few weeks,” Mr. Ganesan pointed out.
K. Mariappan, who runs Sri Arumugam Fireworks, said only select items were being made at his factory. “We are making select products, which we are confident will sell. At the same time, we are honouring every order that comes our way. Traditionally, we take advance payments, so that we will have manufactured the products for which orders are placed in January ,” he said.
He said units that are dependent on marriages and other functions have incurred huge losses. Illegal units have also been hit as there is no cash flow. “Most illegal businesses happen out of rented premises. On an average, they pay ₹1 lakh to ₹2 lakh in rent. With the lockdown, the illegal units are not able to meet their monetary commitments, which is good for those who are doing genuine business,” Mr. Mariappan said.
P.C.A. Asaithambi, partner at Lord Fireworks, said they start production in December and get advance payments by January/February so there has not been any impact on production. “We need to wait and see how Ganesh Chaturthi turns out, and based on that, we can assess how Deepavali sales will be,” he said.
Some manufacturers said wholesalers and retailers who visit Sivakasi to place orders have not turned up because of the lack of transport. A Chennai wholesaler said, “We are being cautious. We are not sure whether people will spend money on crackers, given the lay-offs and salary cuts across all industries.” The wholesaler, who has been into this business for over two decades, said overall spending on crackers is coming down every year, with many becoming environmentally conscious.
