Timber industry facing shutdown threat in Kerala

KOZHIKODE: The timber industry in the Kallai region here, once regarded as world leader in the business, is facing a crisis threatening to lead to a total shutdown with more and more sawmills closing down reportedly due to high-tax regimes adopted by successive governments in Kerala.

The fast vanishing sawmills at Kallai, still the hub of timber industry in the state, poses a serious threat to the business and the livelihood of about 3,000 families who are directly or indirectly involved in the trade.

In the 1950's and 60's, the timber business at Kallai was regarded as one of the best in the world with almost the entire country being dependent on it for household wood works from the region.

"The decline in business started in early 70's with the traders unable to bear the huge rise in the Central Sales Tax and also owing to non-availability of wood through government auction," says President of the Kozhikode Timber Merchants Association C Jayarajan.

While trees were brought in mainly from neighbouring Karnataka and processed at the sawmills here before being sent to various destinations across the country, traders began feeling the pinch with the government hiking the entry tax from a mere two per cent to 12.5 per cent, he said.

Such is the plight of the trade now that only about 50 sawmills are left at Kallai with several of them either winding up their business and others turning them up into godowns to stockpile the wood.