Thursday, September 25, 2008

Inflation strikes: Price of a matchbox touches Re 1 mark

23 Sep 2008, 1030 hrs IST, T S SREENIVASA RAGHAVAN,TNN
  KOCHI: More than 20 years ago, they cost a mere 25 paise, then a decade later they were 50 paise. Those prices disappeared and so did the denominations.
Now, for the first time, the ubiquitous matchbox, which could be bought with loose change left over from buying cigarettes, has touched the Re 1 mark.

The All India Chamber of Match Industry president Sreeram Ashok said dealers across India have already been notified about the price revision effective September 15.

Ashok who is also managing director of Sivakasi-based Sundaravel Match Industries Pvt Ltd said, "As of now, the price revision has come into effect in 60% markets in the country. The entire market would be converted to Re 1 per matchbox by end 2008.''

A P Selvaraj of Sree Kaleeswari Colour Match Works, which promotes Cock Brand matches, said manufacturers were left with no option but to revise prices since raw material costs had risen 250% in the last decade. "Still we were managing to hold onto 50 paise norm since we succeeded in bringing down the labour cost by mechanization,'' he said.

According to Ashok, labour was 33% of the cost of a matchbox but, with mechanization, it came down to 20%. "Since the hike in raw material prices have eaten into the benefits of mechanization, we're now forced to revise the price,'' he said.

Yet, many smaller match units still remain labour intensive. Of 90 million bundles of matches (each containing 600 boxes) produced, 18 million are handmade. Each bundle sells for Rs 350 and retailers have a margin of 25 paise per box.

Tamil Nadu leads in manufacture of matches with 75% of the country's production. Manufacturing centres are located in Sivakasi, Virudhunagar, Gudiyatham and Tirunelveli. In Sivakasi alone, there are more than 500 licensed units.

STRIKE RATES
Period Price per box
1950 : 5 paise
1960 : 10 paise
1970 : 15 paise
1980 : 25 paise
1994 : 50 paise
2008 : Re 1 

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