The Hindu : Despite curbs, Sivakasi gearing for Chinese challenge

Online edition of India's National Newspaper
Friday, Oct 17, 2003

Southern States

Southern States - Tamil Nadu

Despite curbs, Sivakasi gearing for Chinese challenge

By S. Annamalai

SIVAKASI OCT. 16. An anticipated market invasion by the Chinese has put the Sivakasi fireworks industry in the `top alert' mode. Unlike as in other industries, where there is an inherent fear over inability to compete with high quality products bearing competitive prices, the major fireworks units here are confident that their quality would give a run for the Chinese yen. At the same time, the industrialists are worried about the absence of a level-playing field.

S. Maheswaran, president, Tamil Nadu Fireworks and Amorces Manufacturers' Association (TANFAMA), says the restrictions now applicable to Indian fireworks are not there in China. There are curbs on use of chemicals and decibel levels and problems in transhipment. When products from China are allowed to enter India, there should also be room for Indian varieties going outside the country. "In Sivakasi, we did make an entry into the global fireworks market 20 years ago." But the products from south Tamil Nadu are yet to make a significant dent in the export market. The general feeling in the industry is that individual units should become globally competitive to successfully face the Chinese challenge. "The prices are reasonable. But the manufacturers should upgrade their products and bring down the decibel levels," says Mr. Maheswaran.

The exporters face a problem in shipping their products. Fireworks are never accepted as air cargo anywhere and hence there is absolute dependence on the sea route. Owing to transhipment problems, the shipping lines are hesitant to accept small volume exports.

The Chinese industry, Mr. Maheswaran points out, is about 1000 years old, whereas Sivakasi has just about a 100-year history. China's exports go directly to destinations in the United States and Europe, without transhipment in between.

"Both of us entered the global market almost at the same time and both of us shared modern technology. But China is way ahead as it has accomplished upgradation faster". According to Mr. Maheswaran, Sivakasi's native skill, coupled with manpower, is its strength.

While agreeing that competition will hot up with the entry of Chinese products, the former TANFAMA president, A. P. Selvarajan, points out that the base for the Sivakasi products is different.

The Chinese products are chlorate-based and hence emit real colours and are noisier.

The Sivakasi products are aluminium-based. The manufacturers also concede that the Chinese products are qualitatively superior and priced cheaper. This is attributed to low rates of tax and other concessions available in China.

While free shipment of fireworks is allowed in China, only dummies are sent as samples to a prospective buyer abroad from Sivakasi.

In international trade fairs abroad, the Sivakasi manufacturers are allowed only to display posters and play CDs — a feeble exercise in marketing their products.

The confident manufacturers also raise a query: "Why spend precious foreign exchange to import Chinese goods when you have world-class fireworks made in India?"

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