Traders and retailers who are into fireworks business are cutting down on budgets. Owing to the COVID-19 pandemic, they have decided not to stock up more than what is required ahead the festive season. A few traders say they are not even applying for licences to open stalls.
A trader from Sowcarpet, who regularly opens stalls during Deepavali, says, “Last year, I booked consignments for over ₹5 crore; this time, it will be half of that. I will wait until November 10 and will consider buying more, based on the demand. With salary cuts and job losses, crackers would be at the bottom of consumers’ shopping list.”
Another retailer, who puts up three stalls on the Island Grounds in Chennai, says, “I have not invested much this year. I have cut down on the budget by 30%... There is still no clarity on green crackers...”
Traders point out that if consignments are unsold, they cannot return them to manufacturers. Many traders say they have booked consignments on credit from manufacturers. “Usually we sell off the unsold crackers for marriages and during Christmas and New Year. With a cap on the number of people attending weddings, the celebrations are low key, and there is no demand for crackers,” says Rajan, a retailer.
Though production has been impacted at all factories, fireworks manufacturers in Sivakasi, India’s cracker hub, are quite optimistic that business will be good this season. On an average, production has fallen by 20%-30%.
“Production is slightly down but orders have been good. People who were under lockdown for several months now want to go out, shop and celebrate. So this Deepavali will certainly be good,” asserts P. Ganesan, president of the Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA), which represents the industry.
“Over 75% of the orders have come in and consignments have started going out. We are expecting more orders in the coming days,” said P.C.A. Asaithambi, partner at Lord Fireworks. “We are hopeful that Deepavali sales will be good. Else the economy of Sivakasi will collapse as people here are dependent on this industry.”
Mr. Ganesan points out that many manufacturers borrow to run their businesses and if the festive season does not work well it will be a huge burden for the entire industry. There are over 1,000 licensed cracker units at Sivakasi, which account for a market size of ₹2,500 crore-₹3,000 crore. These apart, there are several illegal units that operate out of small sheds and cottages in and around Sivakasi; ballpark estimates show that they do a business of over ₹2,500 crore a year.
Green crackers
Mr. Ganesan and other manufacturers who are members of TANFAMA say over 80% of the crackers from Sivakasi will carry a green tag this year. But a few manufacturers say that even before they could get the green cracker formula right, the lockdown came into force.
A manufacturer, who has three units, says he could not make green crackers this year. “In December 2019, we were working on how to get the formula right. By the end of February, we decided to start work, and by then the lockdown was announced, and we had to halt our business.”
While the big firms have migrated to green crackers, the small units are struggling to get the formula right. The proprietor of a small unit says, “Only 20% of what we made this year are green crackers. Many manufacturers are not able to make green crackers. The migration is cumbersome. Furthermore, no one is going to check on the kind of crackers.”
Manufacturers say it will take another 2-3 years for the industry to switch to green crackers completely.
