Dyestuff industry in Gujarat going through a bad phase

Ahmedabad, Oct 31 : Recession in the global economy and competition posed by China has adversely affected the trade of dyestuff industry at Ahmedabad in Gujarat.

The Indian market was at its peak in the global market for almost six months when China took a break in production of dyestuff commodities following introduction of environment laws during Beijing Olympics.

Gujarat is known as the dyestuff hub of the country, which exports 60 per cent of the total Rs. 1300 million dyestuff materials to countries like Brazil, Turkey and Italy.

The current downturn in the market has affected at least 1100 dyestuff units employing at least 5,5000 people in Gujarat.

Several units are facing a slack in exports with tons of material like Black 210, H-acid, and DASA piled up.

"A lot of our industries have sold their material to Brazil, Turkey, Italy on DA basis now that the Euro rate has also gone up. So their payment situation has become very difficult. So most of our members, those who have sold these on DA basis are not able to fetch these collections and they are in trouble," said Sailesh Patwari, President, Naroda Industries Association.

Since August 2008, Brazil and Turkey have not made payments to manufacturers in India. The manufacturer who were speculating a good business are now worried with their piled up stocks.

"Brazil and Turkey are our main consumers. They fear they have plenty of stock due to the speculation in the prices. They fear to purchase our material, " said Satish Aggarwal, Director, Asiatic Colour Chemicals India Limited.

Businessmen made good profits during Beijing Olympics when they fetched a good amount for raw materials like Black 210, H-acid for $ 2.66 per kg, but nowt has come down to $1.33 per kg, respectively due to recession.

Exports of dyes and dye-intermediates from India, which was Rs.15.2 billion in 2001-02 increased to Rs.55.2 billion in 2005-06.

The worldwide demand for organic colorants (dyes and organic pigments) is estimated at 10.6 billion dollars in 2008. By uday Adhvaryu

ANI