Home / Knowledge / News / Textiles / Synthetic & blended yarn spinning industry in dire straits
Synthetic & blended yarn spinning industry in dire straits
18
Jul '08
Mr. V.K. Ladia, President, ISA (Indian Spinners' Association) has, in a press note issued, stated that the blended and synthetic yarn spinning industry is squeezed between galloping input costs and uneconomic prices of their output, namely, blended and synthetic yarn.

The situation is extremely critical and unless immediate relief is rushed by abolition of import duties and reduction in excise duties on raw materials of the spinning industry, the bleak prospect of imminent closure is staring in the face of the industry.

Referring to the importance of the blended yarn spinning industry in the national economy, Mr. Ladia has observed that there are about 200 mills manufacturing blended and synthetic yarn.

In 2007-2008, out of the total spun yarn production in the country of 3990 million kg, the share of blended and synthetic yarn was 1309 million kg, accounting for 26%. Thus, the blended yarn spinners account for a little more than a quarter of the textile industry in the country.

Obviously, if such a big segment of the industry is in dire financial straits, it will not be possible for the textile industry to achieve the target of creating additional 17.4 million jobs by 2012.

Explaining the critical situation of the industry, Mr. Ladia has, by way of example, referred to profitability results of five leading man-made spinning and weaving industries and stated that there has been practically total erosion of net profits in 2007-2008 with mills reporting a decline in profits by 80 to 99%.

The downslide has further accelerated since April-June 2008 and many leading mills are reporting heavy cash losses. The plight of marginal mills is extremely pitiable and they are gasping for the breath.

Cost escalation:
The devastation of the industry is taking place because raw material prices have gone through the roof. The behavior of domestic price of polyester staple fibre in the recent period has been as under:

Click here to view more:

Prices of polyester staple fibre have, no doubt, influenced by skyrocketing of crude oil prices. However, because of the peculiar method of domestic producers to fix price on import parity basis, which gives additional price boost of 28% of FOB price due to the impact of import duty, SAD, CVD, freight and other charges, the domestic price of polyester staple fibre works out much higher than in other competing countries.

For example, prices of polyester staple fibre in China are lower at least by Rs.10/- per kg. Thus, the blended yarn spinners in India are at great disadvantage.

In June 2008, Government has totally abolished import duty on crude oil. Since the downstream industries are unable to absorb the tremendous shock of high crude oil prices, inasmuch as their inputs are crude oil-based, it is necessary to waive import duties on all downstream industries and particularly on polyester staple fibre.

Recently, import duty on cotton has been abolished and hence, abolition of import duty on man-made fibres is imperative for the point of parity.

Must ReadView All

Neelesh Hundekari speaking at the event. Courtesy: Subir Ghosh

Textiles | On 27th May 2017

Fabric of Change initiative announces €250000 scaling fund

The Fabric of Change initiative of Ashoka and the C&A Foundation is...

Pakistan's Finance Minister Mohammad Ishaq Dar presenting Budget 2017-18 in National Assembly in Islamabad on May 26. Courtesy: PID, Pakistan

Textiles | On 27th May 2017

Pakistan Budget 2017-18 proposes 4 new measures

To support the textile sector in Pakistan, finance minister Mohammad...

Textiles | On 27th May 2017

Indian exports can touch $325 bn in 2017-18: FIEO

Indian exports are on upward trend in last few months as the country...

Interviews View All

Rahul Bhadani
Looksgud

Navigating through catalogues is a bit hasslesome

Vidhyaa Shankar. S
A Ganapathi Chettiar

'The usage of knits is getting into the boundaries of woven fabrics'

Sonia Agarwal
Whitenife

‘The terms eco-friendly and organic are common but everyone perceives them ...

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Eamonn Tighe
Nature Works LLC

Eamonn Tighe, Fibres and Nonwovens - Business Development Manager of...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Silvia Venturini Fendi
Fendi s.r.l

"Yes, my confidence and positive attitude are my strengths and should be...

Tony Ward
Tony Ward

"You have to truly understand what your client wants, know her needs, what ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search