After being cut to the bone, gelatin industry sees better times ahead

The Supreme Court ruling against cow vigilantism and the Prime Minister’s assurance have come as a breather for the gelatin industry, which relies on the availability of cattle bones, its main raw material.

Crushed bones are used to manufacture Ossein, the intermediate product from which gelatin – a key raw material for the pharmaceutical and processed-food industry – is extracted.

Sajiv K Menon, Managing Director, Nitta Gelatin India, the Japanese-Indian joint venture, said that the gelatin industry has been witnessing challenging times since April. This is due to due to the uncertainty in the availability of raw material in the wake of attacks by cow vigilantes in North India, and also the government’s ban on trading of cattle for slaughter, which led to a drop in the availability of bones. However, normalcy has started returning following the Centre’s decision to relook the rules of cattle trading, ensuring the availability of crushed bones.

The gelatin industry consumes around 18,000 tonnes of crushed bones per month and the availability had come down to 15,000 tonnes in the earlier months, Menon told BusinessLine . Annual gelatin production is expected to come down to 15,000 tonnes from 20,000 tonnes during the current fiscal due to non-availability of bones, apart from other factors. This has forced the company to consider imports of crushed bones, which is comparatively cheaper and superior in quality than Indian bones.

According to Menon, the bone collection system in the country is highly fragmented, and the bones need to be cleaned up before use. But imported bones are pre-processed before they are supplied to gelatin manufacturers due to the organised nature of slaughtering globally.

Besides, the strengthening of the rupee has also impacted exports, as there is pricing pressure on Indian gelatin in the global market. All these factors have led to a shrinkage in production, he added.

Apart from these factors, Nitta Gelatin was forced to cut down production at its plant in Kerala due to restrictions imposed by the government for drawing fresh water during the summer months. The production losshas impacted NGIL’s financials, which registered a loss of ₹2 crore in the first quarter of FY18, compared to ₹7.3 crore in the corresponding period of FY17.

Now there is notable improvement in the situation, and the company is once again operating at full capacity, which would be reflected in its performance in the subsequent quarters, he said.

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