Textile units seek loan restructuring package

Indian Texpreneurs Federation (ITF), with members from across the textile value chain, has appealed to the Union government to announce an one-time loan restructuring package.

Prabhu Dhamodharan, covener of the Federation, told presspersons recently that according to a study that the ITF commissioned nine months ago, in which 1,800 companies were covered, it was found that many units needed one-time restructuring package. “Now, in the current Covid situation, we feel that this one-time restructuring will help at least 30 % to 40 % of the companies.”

Further, the ₹3-lakh crore relief package announced by the Union Finance Minister last month for MSMEs specifies that only industries with maximum loan of ₹25 crore can benefit from the package. Textiles is a capital-intensive industry and there are units with ₹ 250 crore turnover but with ₹30 crore to ₹50 crore loan. Hence, the debt ceiling should be increased to ₹100 crore, he said.

The average capacity utilisation across the value chain is 40 % and with drop in textile consumption, the manufacturing units are expected to see only a gradual improvement in orders. Hence, the units need more financial support.

The demand currently is better for low cost and value-for-money products and for goods sold online. On the export front, order enquiries are healthy for the next quarter or so, mainly for home textiles and apparels. The industry should now focus on the man-made fibre (MMF) sector, he added.

The ITF has initiated a cluster project where about 50 units have come forward to dedicate their production facilities to Japanese customers, if the Government can provide market link to them with a cluster in Japan. Japan has a huge market and Indian textile and clothing sector has just 1 % market share now, Mr. Dhamodharan said.

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Printable version | Jul 10, 2020 12:19:30 AM |

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