Granite industry in doldrums as exports halted

The industry is also seeing payments and receivables for exports that happened getting stuck as various markets are closed.

By Author  |  Published: 20th Mar 2020  12:15 amUpdated: 19th Mar 2020  11:45 pm
Granite industry
The industry is also seeing pending payments getting stuck as various markets are closed.

Hyderabad: Granite industry in the State is in doldrums due to the multiple lockdowns due to coronavirus. As a result, quarrying, processing and exports have come to a near halt. This condition has put jobs of several on the throes.

The industry is also seeing payments and receivables for exports that happened getting stuck as various markets are closed.

“The granite industry has come to a standstill. We feel that it will be some time before normalcy returns to the industry. A recession is likely in the months to come,” said Gautam Chand Jain, Chairman and Managing Director, Pokarna Granites.

Granite quarrying is a mainstream activity in Khammam, Karimnagar, Warangal districts of Telangana. The quarried granite is converted into blocks to be exported to China for value-addition. The finished products from China find their way to Europe and US markets.

“We are not able to send any blocks to China. Lorries and ships are not available on one hand and customers are not willing to make any transaction at this point of time,” said Jain.

As per Jain’s market reading, there is no possibility of the granite industry improving for the next few months. “With no demand and no production, we will be in a recessionary phase. The product is not a staple- it is a least priority item,” he explains. His company has about 800 people working in mining and processing and is mainly into exports. He has some inventory and a lot of it is in the quarry as there are no buyers. With no space to add more granite, it is not quarrying, he said.

“Earlier, on a given day there would be about 100 traders from China negotiating deals,” he said

According to Krishna Prasad, General Secretary, Federation of Indian Granite and Stone Industry, quarries, factories and exports have been hit. These apart, international payments are getting blocked due to the lockdowns there.

“Our guess is that about Rs 1,500 crore is stuck at the national level from Europe and UK markets. This is inducing a financial squeeze here and as a result no fresh production is happening. We are in a deep mess,” he said about the supplychain dynamics.

Within South India, Telangana and Andhra Pradesh account for a large proportion of the granite production and exports too. The industry here could be seeing payments of about Rs 500 crore getting delayed due to the coronavirus epidemic.

The industry provides employment to about 25 lakh people across the country. The number in TS could be about six lakh, said Prasad, who is also the Managing Director of The Bharat Granites.

“The employment opportunities will be impacted. There will only be a skeletal staff for the next few months. There might be a temporary job loss but they will be back in the fold once the market conditions improve,” he said.

Logistics segment is also affected due to the granite industry no-show. “We need heavy capacity trucks to move the granite,” he said. The industry pays royalty of Rs 1,000 crore and GST of about Rs 150 crore at 12 per cent. Some of it comes back as input tax credit.

“We are writing to the PMO for some financial assistance. The banks should go slow on loan and interest collections for the next six months or so,” he said.

At the national level, the granite industry could have seen an investment of about Rs 50,000 crore with about 60 per cent of it coming in as bank loans. Telangana could account for Rs 12,500 crore or about 25 per cent of the total investments, he said.


Now you can get handpicked stories from Telangana Today on WhatsApp / Telegram everyday. Click these links to subscribe and save this number 9182563636 on your contacts.

Click to follow Telangana Today Facebook page and Twitter .