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Rise and fall of India’s calcium carbide industry

Scarce raw materials, high cost of power, poor quality of output, low volumes and intense competition from China have devastated the Indian calcium carbide industry.

Rise and fall of India’s  calcium carbide industry

Production of calcium carbide in India began in the mid 1950s, with calico as an import substitution. This was followed by the setting up of medium-sized calcium carbide production plants in Kerala and other States where abundant and cheap hydro-electric power was available. These units were immensely power- consuming owing to the poor quality of calciferous (burnt lime) and sub-standard technology design of the furnaces. The calcium carbide produced was also of inferior quality.

Senka Carbon too suffered from uncertain and limited supply of calcium carbide. By 1996, having come to know of the availability of superior grade calcium carbide in the inner Mongolia province of P R China, I undertook an exploratory trip to meet major calcium carbide producers and negotiated competitive prices for bulk shipment to Mumbai. I noticed that unlike Indian units, the Chinese received active support of their local and central governments.

 

Support Factors in China

Most of the calcium carbide plants located in the Inner Mongolian Province and some units in North and South China, had abundant supply of anthracite coal from large, open, cast mines, at comparatively low cost.  The Chinese government also encouraged setting up of large capacity thermal power plant at the mine pit-head. Thus, they manufacturers enjoyed uninterrupted supply of low-cost power and easy access to superior-quality burnt lime and coking coal. 

Other favourable factors were cheaper finance from banks and availability of well-disciplined Chinese workers at modest wage levels who could be trained quickly and offer high productivity.  The Chinese government also bifurcated production and marketing and fixed competitive targets.

Such nurturing of Chinese producers led to quick development of the industry and large scale production. Their capacity was a million tonne per annum while the Indian units produced a paltry 10,000 tonnes per annum.

Chinese producers were also encouraged to compete effectively in global markets. Units in India, Romania, and Indonesia had to shut down their units due to intense competition from China. Only a few calcium carbide units that were set up for captive consumption and enjoyed lower cost power, survived the pressing ordeal.


Not cheap now...

Withdrawal of local subsidies, increase in power tariff and fuel costs, withdrawal of export incentives, restrictions on inland transport and ports which handle hazardous chemicals, have resulted in steep rise in prices in China as well. 

Imposition of export tax to meet local demand and strict implementation of pollution control measures have further heightened troubles. The shocking rise in export price (fob) of calcium carbide during the past 20 years, from 250 USD/MT to 700 USD/MT, is a glaring testimony to this  development. 

Indian industrial units would be forced to source calcium carbide from China, till they switch over to modern technology or apply alternate process routes like trichloroethylene and PVC desulphurising compounds. India can take a cue from U.S, where most of the industrial units have switched to MAPP Gas sourced from petrochemicals and laser cutting technology. However, these involve high capital investment which India might not be albe to afford.

The Indian calcium carbide industry is now hanging by the thread and could be wiped off the charts completely, if dynamic remedial measures aren’t taken in quick time. 

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