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How Matchboxes Sparked a Revenue Boom

Pratyush Madhav by Pratyush Madhav
16 October 2023
in Economy, Opinions
How Matchboxes Sparked a Revenue Boom
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Matchbox industry revenue: Sometimes, a single spark can ignite change on an unprecedented scale. In the world of matchboxes, this sentiment holds an undeniable truth. While matchboxes are not objects that stop you in your tracks, not many are aware of the immense contributions they have made to the Indian economy, both in economic terms and cultural significance.

The matchbox industry is often overlooked, an unsung hero among India’s economic contributors, and it shares a unique connection with the fireworks industry. Both industries have deep-seated origins in the vibrant town of Sivakasi, nestled in the heart of Tamil Nadu. It is from this small town that the flames of innovation have spread far and wide, illuminating the world with the light of economic progress.

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India’s matchbox manufacturers have crafted a rich heritage within the industry, marrying traditional craftsmanship with modern production techniques. Over the years, they have honed their expertise, leading to the creation of matchboxes that consistently meet the highest standards of quality and functionality. The matchbox industry stands as a testament to what a small but determined group of individuals can achieve when they are driven by a commitment to quality and innovation.

So now, let’s explore the vital role played by the matchbox industry in India and unravel why it is crucial to preserve this seemingly unassuming yet indomitable legacy of matchboxes. Their story is one of resilience, ingenuity, and a spark that has lit the path to a brighter future.

An Accidental Invention, but a tried and tested success formula!

Did you ever stop to consider the origins of the humble safety match, one of the most underrated yet crucial household items? Its history is a fascinating journey, marked by accident, innovation, and global influence.

The story of safety matches is a tale with many origins. It spans the ages, touching medieval Bharat, China, and even Europe. However, the modern safety match we know today can be traced back to a laboratory mishap, courtesy an amateur British chemist named John Walker.

In 1826, John Walker embarked on a quest to find an easier way to kindle a fire. While chemical mixtures that could ignite explosively were known, transmitting that flame to a slow-burning substance like wood had proven elusive. One fateful day, as Walker was preparing a lighting mixture, a match inadvertently caught fire due to friction on the hearth.

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These early matches consisted of wooden splints or cardboard sticks coated with sulfur. Their tips contained a mixture of sulfur compounds, antimony sulfide, chlorate of potash, and gum. The sulfur played a vital role in transferring the flame to the wooden splint, setting a new era of fire ignition in motion.

The matchbox industry, birthed in this moment of serendipity, soon spread its wings, reaching neighboring countries and various British colonies. However, it was India that emerged as the true beneficiary of this invention.

Bharat, that is India, now produces a staggering four crore matchboxes daily, boasting the title of the world’s most economical matchbox manufacturer. Approximately one out of every three matchboxes used worldwide is Indian. The industry churns out an astounding 90 million bundles annually, with each bundle containing 600 matchboxes, and each matchbox housing 40 to 50 sticks.

The production of wooden matches in India is divided into three distinct sectors: the mechanized large-scale sector, the handmade small-scale sector, and the cottage sector. The latter two, the handmade small-scale and cottage sectors, together account for a substantial 82% of total match production. Despite the industry’s vast scale, technology in these sectors has remained relatively simple.

As a consumer durable product, matchsticks require effective branding and an extensive distribution network to capture market share. This is primarily due to the high volume in which matchsticks are sold. By 2015, the revenue generated from match and matchbox production had reached an impressive Rs. 1500 crores.

The challenges ahead

Despite its significant contribution to the Indian economy, the matchbox manufacturing industry faces a range of daunting challenges, some of which pose substantial hurdles.

The first challenge stems from the very source of matchsticks – timber. Suitable wood for match production is found in regions like Kerala, Mysore, and the Andaman Islands. However, the cost of transporting this wood to manufacturing centers is considerably high. The geographical separation between timber sources and manufacturing units becomes a logistical challenge, affecting both cost and efficiency.

Another pivotal challenge lies in the labor-intensive nature of the matchbox manufacturing industry, which is predominantly concentrated in Tamil Nadu. This sector relies on the labor of women, with over 90% of the workforce comprising female employees. The labor-intensive character of the industry means that labor input costs constitute a significant portion of the total expenses, making it susceptible to socio-economic factors, such as inflation in living costs and labor productivity.

The issue is compounded by the presence of disposable plastic lighters, predominantly imported from China, which have started to replace matchboxes in the domestic market. These lighters, with their price range of Rs. 10-20, have the potential to substitute several matchboxes for consumers. As a result, any attempt to enhance the sector’s total revenue by raising the price of an inelastic product is met with resistance due to the ease of product substitution.

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How the matchbox makers can learn from the Agarbattis

To usher in a renaissance for the Indian matchbox manufacturing industry, a multi-pronged approach is essential. Achieving this revitalization demands a proactive policy overhaul, favoring sustainable, livelihood-oriented products over environmentally detrimental cheap imports.

This shift can be seamlessly integrated into the burgeoning Micro, Small, and Medium Enterprises (MSME) sector, where acquiring Production-Linked Incentives (PLIs) for matchbox production could be more attainable.

Moreover, this strategy can be harmonized with the overarching national initiative, “Make in India,” which would undoubtedly pique consumer interest and promote the sector’s growth.

A fitting parallel can be drawn with the resurgence of the agarbatti manufacturing industry, an integral component of Sanatani culture. The incense industry, like many others, was not immune to the disruptions wrought by the COVID-19 pandemic. However, it has demonstrated remarkable resilience and growth. Over the past two years, amid the pandemic’s grip, the industry has notched a staggering growth rate exceeding 10 percent, with a potential Compound Annual Growth Rate (CAGR) of 8.8 percent from 2023 to 2028.

This resilience showcases the incense industry’s gradual embrace of the principles of “Aatmnirbhar Bharat” or self-reliance. The focus has shifted towards reducing dependency on external sources and achieving greater self-sufficiency.

For the matchbox manufacturing industry, this transition should be a considerably more manageable undertaking. By channeling efforts towards promoting sustainable, domestically-produced matchboxes, supporting traditional craftsmanship, and exploring opportunities within the MSME sector, the matchbox industry can secure its place as a beacon of self-reliance, akin to the flourishing incense industry. This reinvigoration would not only safeguard the livelihoods of those employed in the sector but also reinforce India’s position as a hub for indigenous manufacturing and self-sufficiency.

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Tags: Agarbattischallengescottagecraftsmanshipcultural significanceEconomic ContributionFire IgnitionHandmadeIndigenous ManufacturingInnovationJohn WalkerLabor CostsLabor-IntensiveMake In IndiaMatchboxMatchbox IndustryMechanicalMSMEoriginPlastic LightersproductionProduction-Linked IncentivesqualityResiliencerevenueSafety Matchself-reliancesivakasiTimber
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