T N Spinning Mills are forced to go for a production cut as exports plunge, inventory piles up.

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The labour shortage is a cause of concern for the textile industry in normal circumstances. This time around, this has come as a blessing in disguise as mills are facing financial constraints.

Steep fall in exports

Industry sources from Coimbatore said mills are under pressure because yarn exports have declined sharply and the inventory has piled up. This has resulted in a production cut by the industry, after discussions between industry associations and their members, sources added.

While sources could not confirm the number of units which had halted operations in the last month or so, industry insiders put it at around 1 per cent of the total number of mills in the State. The cut in capacity utilisation levels across the industry is estimated at 15- 20 per cent.

Mills are clueless as to how long it will take for the revival of the industry as the present hardships are due to external factors. They reiterated their demand for inclusion of cotton yarn and fabrics in the RoSCTL (Rebate of State and Central Taxes Levies) scheme. The Southern India Mills’ Association (SIMA) Chairman, P Nataraj, said that investments in Tamil Nadu’s textile sector had started to slide in the past 4-5 years. “There are around 11 million spindles in the State, but the spinning sector lags in modernisation. Around 60 per cent of TUF (Technology Upgrade Fund) investments happened across mills in Tamil Nadu till about five years ago. This has fallen to 25 per cent now.”

Stating that the entrepreneurs here were getting into value-added textile products, Nataraj said, “The opportunities are huge and so are challenges as labour is expensive and there is huge shortage of skilled man power.” Despite such hiccups, the industry is hopeful of some revival as the policy with regard to value addition, sources say, “is favourable”. The sector is expecting some respite from State’s textile policy guidelines, which are expected soon.