VELLORE: Due to a rise in raw materials costs, the cottage and small-scale matchstick industries in Gudiyatham town were forced to shut down for over a week. A bleak future awaits as they are unsure when it will open up again.
While prices are skyrocketing, the rate for the finished product remains the same. A matchbox with 30-45 sticks is still sold for `1.
In just a year, the price of 11 raw materials has shot up. The price of cardboard has increased 96% from April 2021 to April 2022. The price of Chlorate (an important chemical component) , sulphur, and wax increased by 59.56%, 96% and 106% respectively, said the Matchstick Manufacturers Association.
The prices have been rising since the onset of the pandemic, Secretary of Gudiyatham Match Manufacturers Association RK Mahalingam told TNIE. "In a year, the price of wax increased from `58 to `120. Now, it has risen by another `20 over the last two weeks. The rate for red phosphorus shot up from `360 a year ago to `850, an increase of `500. It's unbearable and so we shut down the power," he said.
The debate on matchstick raw material price was held in the Tamil Nadu Legislative Assembly on Tuesday. Replying to the matter, State Small Industries Minister TM Anbarasan said, the wax will be procured by Chennai Petroleum Corporation Limited (CPCL) along with Small Industries Development Corporation (SIDCO). He also assured the livelihoods of the workers will be safeguarded. The Matchstick manufacturers held a meeting with raw material manufacturers, TM Anbarasan and the Department Secretary. However, there has been no respite for the manufacturers till now.
The demands of the matchstick industry are not restricted to raw materials. They urge the government to give tax and export incentives to the industry. At present, 0.01% of tax incentives are given to exports. It's too less and we cannot compete with the other countries at this rate, RK Mahalingam said.
It may be noted the matchstick industry attracts 12% GST.
Box: Gudiyatham has around 14 big semi-automatic industries and hundreds of cottage industries, employing 5,000 people. The region constitutes around 6% of the total match stick production in the State. Tamil Nadu produces almost 96% of the total matchstick in the country and exports it to various countries. More than 700 industries employ 4 lakh workers.