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India’s National watchdog on environmental matters decided in mid-March to ask ceramic units in Morbi, using coal as a fuel, to immediately shut down. This will affect about 390 of 1,000 units. Not surprisingly, many industry players said they may appeal against the order.

New Delhi bench of National Green Tribunal (NGT) also said in its order that a committee headed by a retired High Court judge and members consisting of experts from Central Pollution Control Board (CPCB) and Gujarat Pollution Control Board (GPCB) will conduct a survey and submit a report to NGT and pressed upon the fact that industry be made to pay for the pollution they are causing.

PNG (pipe natural gas) is considered to be friendlier to environment compared to coal. However, one cubic metre of gas costs Rs 36, compared to Rs 20 in case of coal. K G Kundariya, former president of Morbi Ceramics Association – Vitrified Tiles Division, acknowledged that NGT has passed such an order, although the final copy will be available in about two days. “We may go for an appeal against the order by NGT. We feel that some of the aspects presented by the industry may not have given proper importance by the tribunal,” said Kundariya, adding that while most units have shifted to NGT, those using coal as a fuel are not causing pollution the way it is projected.

According to one industry observer, “In my opinion, It’s a good move. There will be a short-term impact but it will help to clear finished goods inventories, which are currently very high.”

It is thought that such a ban of coal gas would affect up to 10% of double-charge/GVT producers and 70% of the wall tile sector. The sanitarwyare sector, however, would remain unaffected. In fiscal terms, this could mean that if manufacturers opt to pass on the costs, there will be somewhere in the region of a 10% rise in wall tile prices.

Consequently, it could well be that the less viable factories are forced towards closure, improving the overall quality of the industry and resulting in a more stable set of market conditions. Admittedly domestically this will work, but how it will hit the embryonic export industry is more uncertain, particularly with the Gulf States already starting to impose duty on product coming in.

As with all things in Gujarat, nothing is guaranteed. However, some order amongst the chaos has long been called for. Let’s see how the next few months pan out…

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