The Hindu Business Line : Diwali crackers - `more light less sound' this time

DIWALI this year could see more light than sound as manufacturers have churned out more of what they call fancy fireworks and aerial shots. The trend has emerged over the last two-three years as people have increasingly moved away from noisy crackers and opted for colourful and bright varieties.

According to Mr C. Subasingh, Wholetime Director, Standard Fireworks Ltd, Diwali will be celebrated with `more colour and less noise' this year. Over the last two years they have added more than 250 varieties and thanks to their Chinese collaborators the range is growing continuously.

This year some of Standard Fireworks's labels, especially fancy fireworks, will sport `Mfd. In Technical Collaboration with Standard Fireworks China Ltd.'

Prof K.K. Chandrasekaran, whose family has been in the business for more than a decade, says that the attraction for fireworks has not diminished among the shoppers. Particularly, those with children of school-going age continue to budget more for fireworks.

This year manufacturers appear to have focussed more on `light than sound,' he said. This means parents will have to shell out more for fireworks as fancier items are costlier.

Cost is not a major factor to most because it is once a year purchase; the increase when compared to that of other commodities is not much. More importantly, kids drive sales - a family will buy a particular quantity of fireworks depending on the number of kids, and will pick quantity irrespective of cost, he said.

Business for the dealers continues to increase but the duration of sales has come down. People buy fireworks just days ahead of the festival now. A few years back fireworks purchase was in two batches - one lot for the days before the Diwali and a major purchase for the festival itself.

Those were the good days when margins could go as high as 50 per cent but now it is more realistic to get about 15 per cent, he said.

So what happens when dealers are stuck with unsold stock?

Luckily, the shelf-life of the fireworks is about five years and the dealers who are stuck with stocks can hold on to the product till the next season, he said.

Manufacturers are also accommodative and accept delayed payment for stocks when the general sales are down, as can happen if there are heavy rains.

According to Mr Sanjay Gunasingh of Standard Fireworks, the price increase is about 20 per cent a year - driven by input costs and cost of labour. Also, interest cost is a major factor - production goes on through the year for sales that happens over a few days. The Rs 100-crore company borrows about Rs 50 crore a year and its interest payments could range around Rs 6 crore.

Manufacturers have cut back on producing noisy varieties mostly because of consumer preference. Standard Fireworks has introduced over 40 new varieties this year.

Test marketing starts in the previous season and production ramped up in the next. Over Rs 10 crore worth stocks of noisy fireworks are lying unsold in Sivakasi, the production hub in Tamil Nadu, he said.

Families continue to splurge on fireworks though it is lower on the list of shopping priorities which are: jewels, garments and fireworks in the North; and garments, jewels and fireworks in the South.

In Mumbai, middle-income group families buy up to Rs 25,000 worth of fireworks while in Tamil Nadu it is a modest Rs 5,000.

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