Ceramic industry in Gujarat's Morbi stares at shutdown as West Asia conflict disrupts gas supply

Morbi (PTI): The ceramic industry in Gujarat's Morbi faces a potential shutdown in the next few days as gas supplies from the Gulf region remain disrupted due to the ongoing war-like situation involving Israel, the United States and Iran, industry representatives said on Wednesday.

The Middle East is facing military turmoil where the US and Israeli forces are at war against Iran, which has closed the Strait of Hormuz - a major passage for vessels. The war has intensified since the killing of Iran's supreme leader Ayatollah Ali Khamenei, on Saturday, attacks carried out by the US.

The ceramic industry relies heavily on propane or natural gas for its operations, particularly for firing kilns and drying processes.

President of the Morbi Ceramic Manufacturers Association (Vitrified Tiles Division), Manoj Arvadiya, said petroleum and gas shipments coming from the Gulf countries have been impacted, with consignments stuck at the Strait of Hormuz, which is under Iran's control.

"Gas is the main fuel for the Morbi ceramic industry. Due to the current situation at the Strait of Hormuz, the gas supply for the Morbi ceramic industry has stopped," he said.

Companies using propane gas have a maximum stock of only three to four days, he said.

Regarding CNG supplied by Gujarat Gas Ltd, he said the estimated available stock will last about one week.

"If the war situation persists, then in the coming week or 10 days, we will face a situation where the entire ceramic industry will have to suspend operations. This is the possibility we foresee," he added.

Echoing similar concerns, Haresh Bopaliya, president of the Morbi Ceramic Manufacturers Association (Wall Tiles Division), said the supply chain for natural gas and propane has been disturbed, affecting the timely availability of fuel to units.

"The supply chain for natural gas and propane has been disrupted. Because of this, the timely supply that companies should be receiving is not happening," Bopaliya said.

He noted that propane stock with companies is likely to last only two to three days, while natural gas supply from Gujarat Gas is estimated to continue for around 10 days.

"After that, if we do not get propane or natural gas, we will face the situation of shutting down the industry," he said.

Bopaliya said Morbi currently has around 600 ceramic units and said all of them may have to shut down if the gas supply remains irregular.

Two to three lakh labourers work in Morbi's ceramic units and they will face difficulties in case of a shutdown, he said.

Ceramic manufacturer Manibhai Bavarva said most units in Morbi are dependent on propane and natural gas, with nearly 80 per cent using propane.

He said the propane supply had already been disturbed following an accident at a port in Saudi Arabia on February 23.

"Because of that, the propane supply has been disturbed since then. We were hoping that things would improve slightly by March 10," Bavarva said.

"Now, because of this war, propane supply has nearly stopped. "The gas supply may stop completely by this evening or tomorrow afternoon, which could trigger an industry-wide shutdown," he added.

Former association president Mukesh Kundariya said the war-like situation across the Gulf region has led to a short supply of fuel, including propane, LPG and natural gas, all of which were being sourced from the region.

"The supply of propane and natural gas might stop entirely in about two to three days. Under these circumstances, if there is no gas supply to the industry today, it will probably be able to survive for four to five days. After that, a situation will arise where all industries will have to shut down the operations," he said.

Kundariya said the duration of the conflict would determine the length of the shutdown.

"If the war continues for one or two weeks right now, this industry is likely to remain shut for 30 to 45 days. If it lasts for four weeks, the industry will not be able to restart for two months," he said.

He also cautioned that fuel prices could rise sharply when supplies resume.

According to him, survival for units would become extremely difficult if fuel prices rise in the future.

Highlighting the employment impact, Kundariya said about four lakh labourers are directly and indirectly dependent on the ceramic industry in Morbi.

"If the industry shuts down, it will definitely have a direct impact on the labourers," he said.