Firozabad: A China-spawned Disaster story "Howsoever hard we may try, we cannot match China's prices.

Look at this," he points to a large flowerpot in red glass, "It costs me Rs 45 to produce this. In China, a similar product costs Rs 20 to make. We used to make 350,000 glass shells for bulbs every day. My turnover was Rs 2.5 crore a year. That business is over, says a poignant manufacturer in Firozabad. So what does he do for a living? He now imports bulb shells and glass products from China and sells them in some markets in India. A gruesome reality. Yet true! Firozabad the tinsel town 40 km from Agra in Uttar Pradesh, had a flourishing trade in glass products a few years ago. There were 480 small scale manufacturing units producing glass beads, bulbs, vases, light globes, chandeliers, tableware, bangles and other handcrafted items. The status of affairs now- 300 glass units have closed down, the fires of the furnaces have died. This has spelled doom for thousands of laborers who have been rendered jobless, in the aftermath of their employers going bankrupt. The entry of cheap glass products from China shells required for making bulbs, vases, tableware, glass tumblers etc. has left the Firozabad glass industry paralyzed. This has been attributed to the fact that Chinese products are 40-50 percent cheaper than those from Firozabad's factories. The city's exports have also been hit. Glass imports from Firozabad have plummeted to about Rs.100 crore from Rs.200 crore a crash of 50%. Ring of fire The troubles of the Firozabad glass-makers started way back in the late 1990s when a supreme court order banned all industries from using either coke or coal within the Taj Trapezium Zone. Firozabad fell into the ring of fire. Thereafter all manufacturers were supposed to switch to gas-based furnaces. Most of them had no experience of working on gas furnaces. Many did not get enough help from the government to convert their furnaces. Despite being subsidized gas is still very expensive for most of them. Further the price of soda ash has escalated from Rs. 8000 per tonne a couple of years ago to Rs.13, 000 a tonne today. In China soda ash is believed to cost Rs.4500 a tonne. The industry is also bearing the brunt of heavy taxation. Sales tax and excise duties are at 16 per cent each. According to sources, China manages to reach its stuff to Mumbai at the same rate as the local manufacturers do. So what are the alternatives before the glassmakers of Firozabad? Most of them do not want to start importing items from China. Traditionally they have been manufacturers and most of them do not want to turn traders. Many are attached to their units and are striving hard to keep them running despite the tough times. Some manufacturers are also trying the option of switching over to automated plants. According to sources the city produces Rs 1 crore (Rs 10 million) worth of bangles every day. Glass bangles are one of the few product categories, which have still not been invaded by China. Hence many manufacturers have converted their furnaces to make glass bangles as a survival strategy and also in view of its growing market. Firozabad's glass industry enjoyed monopoly a few years ago. But it has lost in terms of its cost-competitiveness, labor-intensiveness and inadequate marketing skills. Low-cost, machine-made Chinese products are priced aggressively low and hence they have taken the market by a storm. Efforts from all quarters are required to re-kindle the fires of Firozabad's glass furnaces before the Chinese dragon wrecks damage beyond repair. What explains the China advantage? According to a World Bank study China will become the world's second largest exporter after the US by the year 2020. Many reasons go into the making of the Chinese success story - lessons to be learnt by Indian SMEs. What calls for the dragon's cost-effectiveness? The Chinese industry promotes an export culture in every sector. Unlike India, China has taken the WTO (World Trade Organization) as a catalyst for restructuring its industry and focussing on productivity. The Chinese industry enjoys the benefits of a much efficient electricity sector vis--vis India. China for instance has a power tariff of around Rs.1.95 per unit against Rs.3.70 in India. Transmission losses in China are only 6.8% compared to an awesome 23% in India and higher plant load factor.