Fired up over Middle East war. In the state of Gujarat in western India, ceramic kilns and the hundreds of thousands of employees dependent on them have been abruptly shut down, victims of gas shortages.
Normally fueled by propane, the kiln in this Morbi factory is now cold.
A thick layer of dust now covers the massive machines that crush the clay used to make tiles. On site, only a handful of workers are still loading the last tiles produced three weeks ago onto trucks.
“The entire sector is disrupted,” comments factory owner Kishor Dulera, forced to close three sites and send hundreds of employees home. “We have suffered a terrible blow.”
The blockade by Iran of the Strait of Hormuz since the first American-Israeli strikes at the end of February has seriously disrupted India’s oil and gas supplies, as the country imports a large portion of its consumption.
To avoid shortages, Prime Minister Narendra Modi’s government has reserved most of the deliveries of liquefied natural gas (LNG) for households and essential sectors such as transportation or hospitals.
As a result, many industries have had to reduce or even completely halt their activities, such as the chemical industry.
– “Disaster” –
This is the case for the ceramic sector, which generates an annual turnover of $6.5 billion in India and employs several hundred thousand workers, mostly around Morbi.
Factories in this Indian ceramics capital account for 90% of the national production, with some of it exported to the United States or Thailand.
Over 400 of them have shut down their kilns, which run continuously, as soon as gas deliveries dried up, according to Manoj Arvadiya, the head of the local producers’ association.
“You can’t run them for two days and then just shut them down the next day,” he explains, “Unfortunately, it doesn’t work like that.”
As with other employers, Hitesh Detroja had no choice but to close the Lexus Granito factory, which was producing up to 30,000 tiles per day. “A horrible crisis,” “a disaster,” he fumes, thinking about the $74,000 in monthly loan repayments.
The halt in the industry has already begun to weigh on subcontractors and the entire economy of the region. Ceramics provide nearly a million direct and indirect jobs, according to official statistics.
“Everyone is worried,” confides 29-year-old Bunty Goswami. A farmer, he is part of the many workers in the sector who supplement their income there.
– “Recover later” –
“We’re not sure what to do,” he continues, “should we go home or stay here a little longer…”
The Indian government has taken multiple measures to boost local gas production or diversify its sources of supply, including from Australia and Russia. It is also negotiating with Iran for the release of its tankers stuck in the Strait of Hormuz.
Instead of shutting down his kilns, Jitendra Aghara, in charge of one of Morbi’s largest factories, Simpolo Tiles, chose to keep them running by buying propane at double its usual price.
“Even if we suffer losses for two or three months, we can always recover later,” he believes.
The ceramics industry has flourished in Gujarat because clay is abundant and its ports allow for easy supply.
But the current crisis suggests that it may be time to reduce its dependency by using other energy sources besides gas, says Mr. Aghara.
Indian industry giants like the Reliance Group have announced ambitious projects in hydrogen, for example. However, the quality of tiles produced by these facilities “has not yet reached 100%” of those produced in gas kilns, notes the boss.
