Even gazing into a crystal
ball would not have forecasted the unprecedented crisis pressing the textile
mills in the Southern part of India.
Until last year, spinning mills
in Tamilnadu were running round the clock, and were busy expanding their
operational capacities. Now, with the export market hit the economic crisis,
coupled with a few other factors, the declining foreign orders has pushed the
textile industry of South India is centered into a crisis.
Textile mills in Coimbatore accounts for a predominant part of the industry in South India. Presently, a
major part of the spinning mills which involves in manufacturing yarn remains
idle. Several units and closing down, putting the jobs of thousands of the
workers into jeopardy, and many others have not received their wages for
months. 392 mills were closed during the previous year leaving more than 2lakh
workers jobless. Saddled with recession, the industry is tumbling down facing a
steep fall in the export orders, especially from the South East Asian markets.
The economic liberalization, which was believed to be the pivot of Coimbatore spinning mill's success, is now being blamed as a reason for the industrial
The corresponding period during
the previous year was a busy period for the spinning mills in South India. The
spindle capacity was doubled with 40% additional capacity. All these efforts
have gone with the wind, with the advent of global recession and power crisis. The
fiscal year 2008-09 is one of the most difficult periods in the history of
textile mills in South India. Cotton yarn production is already down by 20%
during the last fiscal year. Production which was 4003.44 million kg during
2007-08 dropped to 3239.17 million kg during the last year.
Crippling Power cuts:
Mills in Andhra faced a power cut of 30%, while mills in Tamil Nadu are facing a power cut of 45%. This has
literally pushed the manufacturing units in Coimbatore region to the brink.
With very little electricity to run the machines, burdened with intermittent
power cuts, the spinning mills operate with minimum capacity. Due to the ongoing
power crisis, mills are running only on 55% of their production capacity
resulting in drastic cuts in production and widespread lay-offs.
The Government's failure to take
initiatives to provide relief to the industry has caused agitation among the
mill owners. Despite the Government's announcement of three stimulus packages
for the industry, it did not provide any succor to the ailing industry. The 5%
tax incentive given to the cotton traders as a part of the stimulus package,
only added to the woes of the spinning mills.
Like Scylla and Charybdis, global
economic turmoil and acute power cuts are pressing down the performance of the
textile units. Increasing prices of cotton and revision of minimum wages, and
export sop for cotton have added fuel to the fire. Textile industry in Tamil
Nadu which accounts for 45% of the countrys spinning capacity is now facing
incredible pressure with initiated proactive measures proving futile. Appropriate
measures must be taken, with due support from the Government to revive the