Over 150 open-end spinning mills in Tamil Nadu have downed shutters for five days from Wednesday protesting against hike in raw material prices. It is expected to result in production loss of ₹15 crore a day.
M. Jayabal, president of Open-end Spinning Mills’ Association, and G. Arulmozhi, its secretary, told presspersons here on Wednesday that the mills will not produce yarn, will not buy raw material (waste cotton), and will not sell yarn for five days. If the situation does not improve, they plan to continue the strike for another 10 days.
About 450 open-end spinning mills in the State produce 10 lakh kg of grey yarn and seven lakh kg of colour yarn a day. For the last two months, the price of raw material has increased resulting in higher production cost. But the mills are unable to increase the yarn price. “Mills that produce grey yarn suffer ₹5 a kg loss because of this situation,” said Mr. Arulmozhi.
The price of waste cotton is ₹92 a kg now as against ₹70 a kg two months ago. The currency paper mills had released three tenders for comber noil a couple of months ago and it led to hike in prices. Even now the prices have not come down. Production cost for yarn has increased by ₹10 a kg. But the mills are unable to get that price, he said.
A press release from the Association said that the production cost works out to ₹150 a kg for 20s count yarn. But the mills are able to get only ₹145 a kg. Further, only in Tamil Nadu there is one per cent market cess on cotton and another one per cent cess on waste cotton. Textile mills that sell the waste cotton to the open-end spinners charge packing cost for the waste cotton. These two factors add to the production cost for the open-end spinning mills that buy raw material in Tamil Nadu.
The Association has appealed to the State Government to remove the cess on waste cotton, to the spinning mills to remove the packing charges, and to the Central Government to levy duty on export of comber noil.