MATCH BOX INDUSTRY IN INDIA

Overview
Wooden match production in India is split into three sectoral categories:
mechanized large-scale sector 18%
the handmade small-scale sector 67%
the handmade cottage sector. 15%
Cottage sector: manual production unit producing less than 75,000 cases of match boxes per year.
Together cottage & handmade sectors produce 82%.
Wimco is the only mechanized sector unit with 18% production.



Geographical Stronghold
The strongholds of the small-scale, non-mechanized sector are in the
Ramanathapuram and Tirunelveli districts of Tamil Nadu in South India, where
67% of Indias matches are produced.
The veneering and splint industry in the adjoining state of Kerala is an important
ancillary industry, providing nearly 90% of the wood used in Tamil Nadu
Veener: thin sheet of wood from the outer surface of the log .Used in manufacturing
match sticks and wooden match box.
Splint: matchstick is called a splint.




Scope
For handmade sector , it requires low levels of technology and relatively small
capital investments. Indian government policies have consistently favored the
handmade sector. All future expansion of the match industry is reserved for
this sector, with particular emphasis on the cottage sector.
Government Efforts in Promoting the Small-Scale Sector

Protective Tariffs: import tax on foreign matches.
Differential Excise Duties : Fully mechanized-12%
Semi Mechanised-6%
Handmade -Nill

State Sales Tax Exemption: Nill for handmade sector

Semi Mechanised: even if a single process is done by powered machine except word processing
If the hand-made sector uses ready-made printed boxes, it comes under semi-mechanized.
Issues and Constraints
Raw Material:
Prices of potassium chloride, red sulphur , paper , board and wax - jumped manifold in the recent past but
not the retail price of matchboxes.
Example :Sulphur price has gone up from Rs.17/kg to Rs.32/kg in a matter of four months. Potassium
Chloride is now atRs.40 per kg, up from Rs.28 a year ago
Period Price per box
1950 : 5 paise
1960 : 10 paise
1970 : 15 paise
1980 : 25 paise
1994 : 50 paise
2008 : Re 1 (Only done by a few companies)
Price of match box has not increased proportional to the increase in raw material prices.
Issues and Constraints
Large match industry manufacturers paid Cenvat/Excise at 12 percent while
hand-made units were totally tax-exempt. This leads to huge tax evasion by
large as well as small units.
Shortage of Quality match wood required for automated process by
machines.
Unethical competition by unorganized mechanized units who sell their
product as handmade . Thereby lowering tax.




Match Box manufacturing
process
http://www.madehow.com/Volume-
3/Match.html
Reference video links
Village handmade match making:
https://www.youtube.com/watch?v=xIRF8BEFoHc
Fully Automatic match making:
https://www.youtube.com/watch?v=A4LITFws06A
https://www.youtube.com/watch?v=wFS-E388o0E