Textile mills in the State, numbering over 2,000, are facing a difficult situation despite resuming operations — orders are less, prices have fallen, and export enquiries are yet to pick up.
Tamil Nadu has almost 45% of the country’s spindle capacity and produces approximately 175 million kg of yarn a month.
“With the mills resuming operations in the last one month, the average capacity utilisation is just 40 %,” said Ashwin Chandran, chairman of Southern India Mills’ Association. As the demand was low, yarn prices have dropped nearly ₹10 a kg in the domestic market, export enquiries were not high, and for the yarn supplied, the credit period ranges from 60 days to 120 days, he added.
Some mills operated at 80% to 90 % capacity, only resulting in rising inventory. Of the total yarn produced in Tamil Nadu, nearly 40% was sold in the powerloom weaving clusters in north India, mainly Maharashtra. Weaving activities were yet to gain momentum in these clusters. Even in Tamil Nadu, where there were nearly five lakh powerlooms, the weaving clusters were operating at just 50% capacity.
Hence, the demand for yarn was low.
“We expect domestic demand to pick up only in August or September.” Retail sales for clothing should revive to create demand for weaving and knitting units. Only then would yarn sales increase, he said.
Govt. intervention sought
Mr. Ashwin appealed to the Union and State governments to come out with schemes to boost exports so that Indian yarn was competitive in the international market.
However, the open end spinning mills were facing a slightly better situation. Although the 500-odd mills in the State were operating only at 30% to 40% of their capacity, there was demand for the yarn produced. That was because the market worldwide was better for hospital bed sheets and healthcare related products. The home textile units in Karur, which make these products, use the yarn from the open end mills, said G. Arulmozhi, secretary of the Open End Spinning Mills’ Association.
The mills face labour shortage as most of the migrant workers have gone home. The demand should revive by the time the workers return, say the spinners.