Cotton spinning mills all over the country on Tuesday announced that they would continue with the one-third production cut initiated on May 24.
In a statement here, Shishir Jaipuria, chairman, Confederation of Indian Textile Industry (CITI), said the one-day closure of textile mills on May 23 and one-third production cut under the auspices of CITI and several associations of mills had resulted in a loss of Rs. 600 crore. He said the shutdown was to draw the attention of the government to the serious problems ailing the cotton textile sector and also to the difficulty in reducing stocks of cotton yarn.
Cash losses
Mr. Jaipuria said the unsold stocks of cotton yarn and high-cost cotton had been leading to cash losses for most spinning mills and observed that the closure and production cuts had the spontaneous participation of almost all the cotton spinning mills in various regions of the country. He said that after a review of the situation this Monday, spinning mills decided on a voluntary production cut ranging from 33 to 40 per cent, depending on the stock position in the mills, to be observed from June 1 until the situation improved.
Urgent steps needed
Mr. Jaipuria said the crisis in the industry would be over only if problems of the entire value chain were addressed urgently, since all subsectors in the industry were highly interdependent. He observed that the urgent steps needed for reviving the spinning mills and the value-added segments had been brought to the notice of all the Ministries concerned.
