Indian chems stock up as truckers' strike looms

13 June 2008 13:59  [Source: ICIS news]

By Isha Jha

MUMBAI (ICIS news)--The Indian chemical industry is scrambling to stock up on inventories following a threat by Indian truckers to strike from 2 July, producers said on Friday.

The strike would be the latest in a series of actions against high oil and fuel prices across Asia and Europe affecting chemical transportation.

"The apex body of truckers All India Motor Transport Congress [AIMTC] has threatened to go on a nationwide strike from 2 July if the government did not remove the ad valorem levied on diesel and cut the taxes on old highways where recoveries had already been made," said AIMTC president Charan Singh Lohara.

"It is increasingly becoming difficult for us to operate amid the high diesel prices and the raised tax structure by the government, and we have presented a series of demands to the government, which if not met with by 30 June, would make us call for a strike."

This has caused concern among Indian producers, which believe that a strike could force them to reduce their operating rates.

"Although we will stock up our inventory due to the expected strike, we can only manage to run our plants for three to four days," said Saurav Ghosh, head of purchasing at Meghmani Organics, adding that a prolonged strike could affect the company’s production and supply to customers.

"It is very difficult to store chemicals and particularly liquid chemicals, the strike would affect our plants and we may have to run the plants at lower capacity," said an official from Gujarat State Fertilizer and Chemicals.

Others producers believed that the government would resolve the issue as a strike could worsen the inflation situation in the country.

Polystyrene producer Supreme Petrochem didn’t expect its production to fall, but company officials said a strike could affect its sales.

"We usually keep 15 days stock to run our plants, therefore, our production could be sustained through the period, however our supplies and sales could be affected due to the strike," the official added.

Most producers did not expect prices of chemicals to increase as they were already at peak levels.

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By: Isha Jha
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