600 Units, 4 Lakh Workers: The Iran War Impact On Gujarat Tiles Industry

As the war in the Middle East drags on, the ceramic tile industry in Gujarat's Morbi is staring at a massive crisis. The conflict, which has led to major disruptions in the Gulf region, has hit supplies of Propane gas and natural gas, extensively used in the manufacture of ceramic tiles. These tiles are widely used in construction, and Morbi is among the major centres of this industry globally.

600 Units, Lakhs Of Workers

Morbi has more than 600 industrial units manufacturing ceramic tiles. These units employ over 4 lakh people directly and indirectly. These units are dependent on Propane gas and natural gas supplies, and their disruption can force these units to shut down.

Members of the ceramic tiles manufacturers' association said the gas supply was disrupted last month due to some problems at a Saudi port, but the war has added to their troubles.

Hareshbhai Bopaliya, the president of the association, said they have Propane supplies to last just three days, and natural gas stocks for about a week. "If supplies don't resume soon, we will face a situation where industries will have to shut down. The supply chain has been severely affected," he said.

The association's representatives met officials of Gujarat Gas, and both sides agreed that if the war drags on, the situation will worsen.

Industry Faces Big Crisis

Manibhai Bavarva, an industrialist, said the ceramic tiles industry is staring at a massive crisis. "Our fuel supplies come from the Gulf. Several units may have to shut down if gas supplies do not get restored to the earlier levels," he said. He also said that if the war drags on, gas prices will spike, and that will lead to a massive jump in manufacturing costs.

"If gas prices hike by 100 per cent, and if we raise tile prices accordingly, the market needs to accept it. So the industry faces a huge challenge," he said, adding that if the industrial units shut down, lakhs of workers employed in the sector will be affected. This will have a cascading effect on the local economy. The industry's representatives are now seeking urgent intervention by the government and an alternative source of fuel for their production.

Gas Supply Chains Choked

The spiralling conflict in the Middle East has choked global gas supply chains. About 20 per cent of global LNG supplies pass through the Strait of Hormuz, where traffic has largely come to a standstill since the war began. Iran has warned it would strike any vessel that tries to transit. This has led to a crisis and a spike in prices.

Also, Iran has targeted several gas facilities across the Middle East as it bombs some of its neighbours in retaliation for the airstrikes carried out by the US and Israel. These neighbours include Gulf nations such as Qatar, which count among the prominent gas exporters globally. If the war drags on, industries dependent on gas supplies would take a huge hit.

Inputs by Ravi Sanadiya