Glass and tile producers prefer south Gujarat to north

Vol 11, PW 25 (01 May 08) Midstream & Downstream

Glass and tile manufacturers are abandoning north Gujarat for south Gujarat, where gas is more easily available.

Take Mumbai-based Euro Group, which produces ceramic tiles, compact discs and dry cell batteries. Euro has a base in the tax-free industrial zone of Kutch in northern Gujarat, but the group is busy setting up its new glass manufacturing factory at Ankleshwar in south Gujarat.

“We need up to 200,000 cm/d,â€‌ says Talakshi Nandu, director of Euro Ceramics. “It is not possible to get this quantity in Kutch so we are setting up our new glass manufacturing factory at Ankleshwar.

â€‌ Euro wants to establish itself in the glass market in India, dominated by three companies: Chennai-based Saint Gobain, Ankleshwar-based Modi Float and Rourkee-based Asahi Glass. But Euro can’t afford to wait until 2010, when Gujarat State Petronet says it will complete a 130-km gas transmission pipeline from Morbi to Mundra in Kutch.

“We cannot wait for that,â€‌ adds Nandu. “Our factory will be ready by 2009.

In south Gujarat we can secure gas from several players including GSPC, GAIL, Shell and Gujarat Gas.â€‌ Euro’s Kutch facility burns around 60 tonnes/day of LPG from GAIL, supplied in bullets and cylinders.

GAIL is now offering pipeline connectivity to Euro’s new facility at Ankleshwar from its existing grid but is unable to supply gas, leaving Euro to scout for supplies elsewhere. Another company looking to south Gujarat is Mumbai-based ceramics producer Nitco Group, which has a factory at Alibaug in Maharashtra.

Nitco is determined to set up a factory in Gujarat, either a new facility or by buying an existing one. But even though north Gujarat and Morbi have emerged as tile manufacturing hubs, Nitco prefers to set up its new manufacturing facility in south Gujarat.

Company officials blame the lack of gas supplies for their decision. “In Morbi, we have no choice but to buy from the sole piped gas supplier, which is GSPC Gas,â€‌ says a senior company official.

“But in south Gujarat we can negotiate with several players.â€‌