After a sharp drop in Spring Festival sales, fireworks companies in Liuyang, Hunan province and the authorities overseeing their production hope to re-ignite demand by making more innovative and environmentally friendly products.

The Spring Festival holiday used to mean big business for the industry, but sales plunged this year, said Hu Jianjun, deputy director of the Liuyang fireworks and firecrackers administration bureau.

The decrease mainly came in cities, while rural areas saw little change, said Lu Binghui, chairman of the Liuyang Fireworks and Firecrackers Association.

While sales generally fell about 20 percent in cities, organized displays for official events saw a falloff of about 70 percent, said Zhang Qiuming, chairman of the Liuyang Firework Show Association.

According to the administration bureau, the 900 companies in Liuyang produce about 70 percent of China's fireworks and firecrackers and 60 percent of the export market. Of the 1.3 million people in Liuyang, 300,000 work in the industry.

In 2013, production by the industry was valued at 19.09 billion yuan ($3.08 billion), while 2.6 billion yuan worth of fireworks and firecrackers was exported.

The ban on using public funds to buy fireworks was a major factor behind the drop in sales, Hu said.

The Communist Party of China Central Commission for Discipline Inspection, the country's top discipline watchdog, released a circular in late November urging officials not to buy fireworks with public funds during the holidays.

The government also issued fewer approvals to enterprises to hold fir displays, Zhang said.

In addition, cities restricted their use and the content of fireworks has changed, Hu said.

The latest regulation on fireworks and firecrackers passed in 2013 reduced the maximum powder content and made them smaller, said Huang Weide, board chairman of Liuyang Qingtai Fireworks.

So if consumers bought the same box of fireworks as the year previous, the content was smaller.

Though Liuyang also exports fireworks, that market only accounts for about 20 percent of its total output, said Tang Xiaodong, deputy director of the e-commerce department at the association.

If too many companies export, the price may fall even more, Tang said.

More innovative and environmentally friendly products are being considered, said administration bureau deputy director Hu.

"We have been cooperating with various research institutions, including the Beijing Institute of Technology and Nanjing University of Science and Technology, to make the fireworks and firecrackers more environmentally friendly and safe."

The Liuyang city government has a special fund of 20 million yuan allocated every year for research and development, and one important research aspect is to reduce the sulfur content.

"The propellant we use in the fireworks contains sulfur, which pollutes the air. But now we have developed a new kind of propellant without sulfur," Hu said.

"It's impossible to have fireworks without smoke, but we are trying to reduce the smoke as much as possible," Hu added.

Some small factories will be phased out when their three-year production licenses expire, Hu said, while companies are being asked to pool resources, cut costs and diversify.

The Liuyang government plans to reduce the number of such companies to 600 by 2015. Now some companies are looking at other fields, Hu said.

Zhong Ziqi, chairman of the fireworks association and also chairman of Dancing Fireworks Group, said environmental considerations are a priority, as are more innovative products.

Contact the writers at houliqiang@chinadaily.com.cn and fengzhiwei@chinadaily.com.cn

WANG JING/CHINA DAILY

About 70 percent of China's fireworks and firecrackers are produced in Liuyang, Hunan province.