About 30,000 power loom units involved in producing rayon fabric stopped production for a week from Monday unable to cope with the rising prices of yarn.
These units functioning at Veerappanchatiram, Ashokapuram, Manickampalayam, Rasampalayam and Chithode were involved in purchasing rayon yarn from companies at Pallipalayam for producing and selling the fabric in north India.
According to B. Kandavel, coordinator, Tamil Nadu Federation of Power Loom Association, the price of yarn that stood at ₹150 a kg during Diwali rose to ₹176 this week. He said frequent and erratic increases in yarn prices were hindering the execution of orders on account of the heavy losses they were incurring.
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“We incur a loss of over ₹5 per metre,” said Mr. Kandavel. About 24 lakh metre of rayon fabric is produced daily in the units in which over 50,000 workers are employed. The work halt would result in a production loss of ₹40 crore, said members of Erode Vhisaithari Urimayalargal Sangam.