Ahmedabad:
Morbi’s ceramic industry, which has already swelled to around 290 operating units after being almost shut in March, is set to return to full capacity with 675-700 units in May as Gujarat Gas has increased piped natural gas supplies to the cluster, a senior government official said on Friday.
“Operations picked up in April, with gas consumption rising from 0.36 million metric standard cubic meters per day (mmscmd) at the end of March, when around 83 units were operational, to 2.70 mmscmd by April 22, serving around 290 units,” a Gujarat Gas official said.
Sandeep Kundariya, president of the floor tiles division of Morbi Ceramic Manufacturers Association, said the cluster is on track to return to full strength by next month.
“Production in the cluster has resumed and most of the units are expected to be operational by May 10. About 670 ceramic units in Morbi are connected to piped natural gas (PNG) supplied by Gujarat Gas and the industry is currently completely dependent on PNG,” he told HT.
He said units with liquefied natural gas (LNG) or PNG connections are not using propane or LPG under the current policy and supply situation, effectively shifting the Morbi cluster completely to piped natural gas.
Kundariya said around 400 units have already completed the minimum guarantee offtake (MGO) agreement with Gujarat Gas for May, while the remaining units are expected to do so in the next few days. “Gas prices have risen sharply and are almost double compared to March. Part of the cost will be passed on to customers and for now production will be focused on domestic demand as export orders are limited,” he said.
Gujarat Gas Limited, a state-run city gas distribution company, supplies piped natural gas to industrial, commercial and domestic consumers across the state, including the Morbi ceramic cluster. During the recent disruption, the company sourced LNG directly from Africa and other non-Middle East markets and worked with industry stakeholders to ensure continuous supply, stable pricing and alignment of volumes to restart units, a company official said.
Prior to the disruption, a large section of the units operated on LPG and propane, which were the dominant fuels for kiln operations until supply constraints and restrictions forced closure and relocation to PNG.
The sector had slowed since mid-March after the Iran war disrupted fuel supply chains, tightening propane and LNG availability and increasing input costs. According to a Gujarat Gas official, around 450 out of around 700 units suspended production and shifted to maintenance mode, affecting over two lakh employees.
With improvement in supply, consumption is expected to increase to 6-7 mmscmd in May as all units resume production. Producers have coordinated with Gujarat Gas to secure piped natural gas supply and align the requirements with the production schedule, the official said.
Gas accounts for about 30% of total production costs in the ceramics sector, making the industry sensitive to supply and pricing. Morbi Ceramic Manufacturers Association has called for removal of 6% VAT on natural gas to support the recovery.
The disruption also affected exports, with about 25% of Morbi’s ceramic production being shipped to markets in the Middle East, where shipping uncertainty slowed dispatches.
Morbi is one of the world’s largest ceramic manufacturing centers with an annual turnover of approx. ₹60,000 crores.