Time to expand capacity to meet increasing domestic and global demand
Claiming that the spinning sector was the worst hit in the recent cotton yarn crisis, the textile mills have urged the Centre, especially the Union Textiles Ministry, to allow the industry to expand and meet the increasing domestic and global demand.
While welcoming the move to contain cotton yarn exports and moderating the domestic price of cotton, mill owners are urging Textile Minister Dayanidhi Maran to take more steps to ease the ‘supply side' and ensure that the mills are able to expand capacity and raise production levels.
Captains of the industry feel that more than the global slowdown, it was the ‘unfettered export' of cotton yarn and the retrospective discount offered for its export in the past that hurt the industry most — especially the spinning mills. Competing countries such as Bangladesh benefited from the crisis, which the Indian textile industry the only Asian industry to shrink. This situation was corrected in late 2009, with the intervention of Mr. Maran.
When the Technology Upgradation Fund (TUF) was cleared and a backlog of nearly Rs.2,000 crore was reimbursed, many mills got back their working capital and have begun gradually expanding capacity.
Global shortage of yarn
Asked for a response to the steps announced by the Centre, Southern India Mills' Association past Chairman and Loyal Textiles Chairman and Managing Director Manikam Ramaswami said there was now a global shortage of yarn. Andhra Pradesh and Tamil Nadu, which account for 65 per cent of the spinning capacity, have been badly hit by the power cut.
The gas was turned off in Andhra Pradesh and the load shedding hit the textile sector the most in Tamil Nadu. This was a primary requisite to utilise the existing capacity, leave alone adding capacity to meet demand, he argued. Hardly 60 per cent of existing capacity was not utilised because of supply side problems.
He said the yarn prices had hit the roof, the labour cost had doubled in a year, there was a power shortage, and the problem of pollution was haunting the industry.
The textile sector, especially the knitting and garment units, had to modernise, mechanise and become more competitive to retain its share in the global market.
Many knitting/garment units were coming up in Kolkata and the East because of easier and cheaper availability of coal. Units in the South depended on firewood to a large extent, and the biomass plants were making it unviable.
Mr. Ramaswami appealed to Tamil Nadu Chief Minister M. Karunanidhi to exempt the textile mills from the power cut, considering their demand for electricity and the employment they offered.
“The next three months will be critical, after that we can turn to wind energy too. We need this help desperately,'' he added.