For smaller textile mills across Tamil Nadu, securing raw material at reasonable prices proves key to economic viability.
On the sidelines of the South India Spinners Association (SISA’s) annual meeting, President R. Arunkarthik said that volatility in raw material prices ranks amongst the chief reasons behind textile mills turning sick.
The Union government ought to scrap the import duty on cotton permanently so Indian cotton prices ease.
The Tamil Nadu government should back and encourage cotton cultivation within Tamil Nadu by extending financial support to farmers for automation and the purchase of quality seeds.
For smaller mills to use more man-made fibre (MMF), the State government ought to establish a cotton and fibre auction centre.
“This would serve as a platform for foreign companies to sell raw material to mills based in Tamil Nadu. The Cotton Corporation of India should open a warehouse within Tamil Nadu so smaller mills can purchase cotton directly from it, he added.
Mr Arunkarthik said nearly 100 units amongst its members had ceased operations across the last five years owing to the slowdown gripping the textile sector.
“The age of machinery within existing mills ranged between 10 and 25 years. Smaller mills remained reluctant to invest in modernisation given its capital-intensive nature,” The Hindu reported.
“The Tamil Nadu government should extend a 25% capital subsidy, as done by States such as Maharashtra and Madhya Pradesh, so mills can invest in modernisation,” he added.
The mills were presently operating at 95% capacity as demand for yarn had picked up, with many shifting towards speciality yarns, he added.
Image courtesy: Aditya Birla
