Salt production down after rain, prices go up

Chennai: Salt manufacturers in the state have reason to rejoice. Though heavy rains have pared annual salt production, the resultant shortage has raised prices, translating into better profits for small-scale units.

“For the first time in the last three or four years, salt prices have gone up marginally by Rs 100 per tonne,” said Mr S.K.S.C.N. Dharmaraj, CEO of SKSCN Ltd.

The salt manufacturer, who is also the chairman of the Confederation of Indian Industry, Thoothukudi district, said, “Due to heavy rains, production has been down from 12 lakh tonnes to 11 lakh tonnes per annum this year, which, in turn, has pushed up prices.”  Salt prices are currently ruling at Rs 850 per tonne.

Thoothukudi is the country’s second biggest salt hub after Gujarat, catering to one-fourth of the total salt demand of the country.

The industry has been through a rough patch as production costs, including power and labour, have gone up by over 20 per cent in the last two years while prices remained stagnant.

“There have been fewer power cuts this year and this helped us focus on production. However, labour costs have shot up by over 35 per cent in the last two years,” said Mr G.N. Chakravarthy, executive director of the KSPS Group. The salt maker has been bringing in workers from neighbouring villages to work in saltpans.

Individual saltpans in Thoothukudi are much smaller — ranging between 12 and 20 acres — compared to the vast 1,000-acre saltpans of Gujarat.

The smaller size deters hi-tech solutions as those in the market cater to large acreages and come at a huge cost.

“We are working with local universities and companies to come up with mechanised solutions to overcome labour issues and have also sought agriculture status for better funding for the industry,” said Mr Dharmaraj.