Sivakasi firework units shut down as funds dry up

CHENNAI: Sivakasi, India’s fireworks manufacturing hub, faces a bust as an attempt to clean up the country’s toxic air choked the working capital of hundreds of units in the Tamil Nadu town.

The town, which earned the sobriquet ‘kutti Japan’ (mini Japan) for its manufacturing activities, produces 85% of the country’s firecrackers, providing livelihood to an estimated over eight lakh people.

The Tamil Nadu Fireworks and Amorces Manufacturers Association (TANFAMA) said no dealer is paying advances after a petition was filed in the Supreme Court seeking a countrywide ban on firecrackers sale, striking a body blow to the industry that depends on advance payments for working capital.

TANFAMA declared an indefinite shutdown of fireworks manufacturing units from December 26. A decision was taken at a meeting on Friday as “things have gone from bad to worse.”

The trade practice here for the past 80 years is that the dealers send advance payments after Diwali, which meets 90% of the working capital requirement of the 820 odd units based in the town. The remaining 10% is met from own funds and bank loans.

TANFAMA secretary K Mariappan told HT that in view of the petition, dealers have stopped making advance payments fearing an “adverse” judgment, making it impossible for manufacturers to run businesses. To chalk out its course of action, TANFAMA is hosting a meeting of All India Federation of Fireworks Associations on December 28 in Sivakasi . “We are tired of fighting … look forward to you for your help and support ... in having a historical win against the enemies of Diwali and Fireworks,” the TANFAMA’s invitation to AIFA members reads. “We are tired and cannot fight the battle on our own,” Mariappan told HT. He dismissed the environmental concerns associated with bursting of crackers, stating that even long after Diwali, Delhi was engulfed in smog created by atmospheric pollutants.