Appriciation of Rupee against Dollar hurting spinning mills
Mill owners in the textile towns of Gobichettipalayam, Namakkal, Karur, Salem, Coimbatore, Dindigul and Tiruppur have shelved expansion plans.
The yarn prices have hit the rock-bottom owing to the rupee appreciation, while cotton prices have increased. Bank interest rates have gone up from 8 per cent to 12.5 per cent. The contracts, entered into in January, will keep the mills running till July.
Talking to The Hindu on Tuesday, Tamil Nadu Spinning Mills Association president A.P. Appu Kutti said: “In the present situation, we don’t see any future for the spinning mills. The future of 3.50 lakh employees is bleak.”
According to him, there are over 2,000 spinning mills in Tamil Nadu. On an average, they produce eight tonnes of yarn a day, roughly Rs. 1.80 crore worth of business.
The yarn prices have hit the rock-bottom owing to the rupee appreciation, while cotton prices have increased. Bank interest rates have gone up from 8 per cent to 12.5 per cent. The contracts, entered into in January, will keep the mills running till July.
Talking to The Hindu on Tuesday, Tamil Nadu Spinning Mills Association president A.P. Appu Kutti said: “In the present situation, we don’t see any future for the spinning mills. The future of 3.50 lakh employees is bleak.”
According to him, there are over 2,000 spinning mills in Tamil Nadu. On an average, they produce eight tonnes of yarn a day, roughly Rs. 1.80 crore worth of business.
Tiruppur Exporters Association president A. Sakthivel said:“By August, we expect 25-30 per cent of mills in Tiruppur to remain idle owing to lack of orders, and operations in ancillary units to come to a grinding halt.”
“Out of the 2.50 lakh workers at Tiruppur, 60-70 per cent are from other States. Now they will be asked to go back… Overall, the situation is turning from bad to worse.”
Source: The Hindu
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