Wed Feb 04 13:58:46 UTC 2026: ### Kerala’s Pencil Slat Industry Faces Imminent Collapse Due to Raw Material Scarcity

The Story:
The pencil slat industry in Kerala, a key traditional sector with over 60 years of history, is facing a critical raw material shortage. The Kerala State Pencil Slat Manufacturers’ Association has warned that the industry, which generates an annual turnover of ₹1,000 crore and supports over 70,000 workers, is on the brink of collapse. The scarcity of specific softwoods, particularly Vatta (Macaranga peltata) and Ilavu (silk cotton tree), essential for pencil production, is the primary cause of the crisis.

Pencil slat manufacturers allege that the plywood industry is aggressively outbidding them for these timbers. With the pencil slat industry limited to using Vatta and Ilavu, while plywood factories can utilize a much broader range of wood types, the pencil slat industry is unable to compete. The association has appealed to the government to intervene, drawing parallels with protections afforded to the matchbox industry.

Key Points:

  • Kerala’s pencil slat industry is experiencing a severe raw material shortage.
  • The number of operational units has decreased from 250 to 150.
  • The industry generates ₹1,000 crore in annual turnover and employs 70,000 workers, mainly in the Kollam district.
  • The scarcity is due to the high demand for Vatta and Ilavu softwoods, primarily driven by the plywood industry.
  • The Pencil Slat Manufacturers’ Association has requested government intervention, seeking similar protections as the matchbox industry by excluding Vatta and Ilavu from the timbers permitted for plywood use.
  • The association is seeking reclassification of their units under the Regulation of Sawmill and Other Wood-based Industrial Units.

Key Takeaways:

  • Competition for natural resources can have a devastating impact on traditional industries.
  • Government intervention may be necessary to protect vulnerable sectors from market forces.
  • Policy decisions regarding resource allocation can significantly affect the livelihoods of thousands of workers.
  • The pencil slat industry is arguing for a level playing field in resource allocation, highlighting the limitations they face compared to the plywood sector.
  • The future of Kerala’s pencil slat industry hinges on the government’s response to the association’s appeal.

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