Dyestuff Makers Rally on Crackdown in China
Firms like Shree Hari and Aarti Inds have risen sharply, but some experts say gains may be temporary
Mumbai: Dyestuff makers in India have caught the fancy of market traders in recent weeks. Shares of nearly two dozen dyestuff manufacturing companies have witnessed a rally of 10-57% since early March following China’s crackdown on local industry to lower pollution. Shree Hari Chemicals, Kiri Industries, Bhageria Industries, I s h a n Dye s a n d Che mi c a l s, Chromatic India, Aarti Industries, Vipul Dyechem, NOCIL, Nitta Gelatin, Poddar Pigments, Asahi Songwon and Narmada Gelatines , among others have witnessed a sharp up move in share price in just over a month.
China’s top dyestuff maker Hubei Chuyuan, which has a 30% market share in the sector, was recently shut down by the government on environmental concerns. “Hubei Chuyuan’s shut down has given impetus to the recent rally in share price of India’s dyestuff makers but it could be temporary,” said Daljeet Singh Kholi, head of research at IndiaNivesh. “Hubei Chuyuan could restart operations in the next few months after changing the plant location or environmental upgradation and so on. In India, dyestuff makers have shown good numbers recently and overall there is a view that China may further crack down on the activity.”
India is the second-largest manufacturer of H-Acid, globally after China. H-acid is the chief dye intermediate used in manufacture of black dyes. However, H-acid is the most polluting industrial effluent that generates 50 kg of waste for every one kg of usable material. It is toxic and non-biodegradable.
According to data from Directorate General of Commercial Intelligence and Statistics, India alone manufactures around 24,000 tonnes of dyestuff every month. Manufacturing in China is more than double of India.
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