Financial Daily from THE HINDU group of publications
Saturday, Mar 20, 2004
Industry & Economy
Tuticorin salt sector seeks sops
Workers gather salt at Vepalodai, a major production centre near Tuticorin. Shaju John
Tuticorin , March 19
SALT manufacturers in Tuticorin are hoping for support on infrastructure and concessions from Government levies - as available to other industries - to face competition.
There is nothing common about salt, it would seem, listening to the uses that common salt can be put to.
Apart from serving to add taste to food, it is an important raw material for a range of chemicals and Tuticorin is a major production centre, accounting for about 25 per cent of India's production.
Despite this versatility, the industry is on a slide because its fortunes are tied to that of the chemical industry, which is in the doldrums, according to Mr N. Ratnavel, a leading producer and supplier of salts and allied chemicals.
For instance, in the last decade the textile industry has received various concessions in power tariff and excise and other forms of support.
The salt industry should be considered for similar measures as it is among the largest provider of livelihood in Tuticorin.
Over three lakh men and women are employed directly and they earn about Rs 75-90 a day.
Truckers bringing in goods to the Tuticorin port load salt on the return trip.
Tuticorin produces about 12 lakh tonnes of salt, about 90 per cent of Tamil Nadu's production, and more than half the quantity is used by the chemical industries.
But production has been dropping in Tuticorin because the area under production has been stagnating.
For instance, at nearby Vepalodai, production has dropped to 6,24,000 bags of 80 kg each in 2003 compared to 7,41,400 bags in 2002.
Tuticorin supplies salt to most States in the South, including coastal States because conditions there are not conducive to salt-making, according to Mr Ratnavel.
Producers in Gujarat have an edge over those in Tamil Nadu because of certain natural advantages.
In Gujarat, where the pans are creek-fed, salt is produced at Rs 40-60 a tonne while in Tuticorin it costs about Rs 90.
This is because in most parts of the district producers have to pump up ground water at a cost of about Rs 4.50 a unit.
According to Mr Ratnavel, the State Government should consider lower tariffs for power to salt producers.
Power generation facilities are available close by and salt manufacturers are among the bulk consumers.
Also, the infrastructure facilities are not available. Road conditions are poor: what used to be a 20-minute drive from Tuticorin to Vepalodai now extends to nearly an hour. This drives up freight costs.
But producers in Gujarat are better able to reach other markets. Rail wagons are in short supply, which means that Tuticorin producers cannot reach potential markets like Assam and West Bengal, he said.
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