Rising freight costs and a paucity of shipping lines have forced close to 250 export-oriented ceramic units in Morbi to temporarily down their shutters, according to stakeholders in Gujarat’s ceramic industry.

“We export ₹20,000 crore of ceramic products annually. But exports have fallen by 35-40 per cent In the first three months of this financial year. In August alone, exports dropped by 50 per cent due largely to rising freight costs and non-availability of containers for export,” Mukesh Kundariya, President of the Morbi Ceramics Manufacturers’ Association told businessline.

The falling exports have forced several ceramic units to down their shutters. “Currently, about 250 units in Morbi have shut down. We do not see the situation improving soon. September and October are expected to remain unfavourable as far as ceramic exports are concerned,” Kundariya added. 

Ceramic manufacturers in Morbi point out that freight costs have risen five times in the last three months, which has discouraged overseas importers. “The freight costs have risen five times on account of which demand has fallen. Apart from freight costs, there is a paucity of vessels. The problem is with shipping lines. A number of them have been diverted towards China, disturbing the routes. This time the issue has persisted for four months,” said Bhavesh Varmora, Chairman of Varmora Granito Pvt Ltd.

“Of 800 exporting units, between 250-300 units have shut down. These units were exporting 50-70 per cent of their production. They have felt the immediate impact,” he added. 

Varmora Granito operates 15 ceramic plants in Morbi, with a manufacturing capacity of 58 million square meters per annum. Asked if his units were also hit by declining exports this year, Varmora said, “None of our plants have been impacted as we largely focus on meeting domestic demand. Only 20 per cent of our sales are exports. Even if we have suffered a 5-7 per cent impact, we do not have to close down the plant. Currently, capacity utilisation is at 90 per cent.”

The Indian ceramic industry had a size of ₹62,000 crore in the financial year 2024. Gujarat accounts for 90-95 per cent of the production, and exports stand at ₹20,000 crore. Ceramics from India are exported to the US, Saudi Arabia, the UAE, Nepal, Mexico and others.

“As an industry, exports have grown from ₹8,000 crore four years ago to ₹20,000 crore now,” said Varmora. The Morbi ceramic manufacturers largely use Mundra port for exports, while a small per cent of coastal cargo to states like Kerala go through Pipavav port.

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