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One more textile mill in 'Manchester of East' goes under
05
Jan '09
The saga of textile mill closures never seems to stop in Ahmedabad, so called the Manchester of the East at one time. This city which was compared to the iconic Manchester and which at one time had more than 150 textile mills operating in the city has now just been reduced to just 5-6 textile mills.

Neptune Spinfab, which had taken over a closed mill under the textile restructuring plan in 1991, has planned to close down shutters. The mill which employed around 330 workers and about 100 contract workers, have been asked to go in for a voluntary retirement scheme (VRS).

The management of the company is in talks with the Textile Labour Association (TLA), Ahmedabad and the VRS scheme is being done under the aegis of the association. The mill has been forced to close down shutters, due to the high prevailing prices of cotton in the market.

fibre2fashion.com spoke to Mr Ramanlal Patel, President of TLA, confirmed the closure by saying, “There were total 345 workers out of which 240 were asked to take VRS. They have been given gratuity of 1 year and 30 days. Company was facing loss of Rs. 700,000 per month, which was the main reason that the management was forced to take such a step.”

The increase in MSP of cotton and also the slowdown witnessed in the last few months is turning what were once the managed textile mills in to sick units. The mills are not able to extract remunerative prices for the yarn or fabric they manufacture, or for that matter even exporting units have had to reduce prices by at least 10-15 percent.

Fibre2fashion News Desk - India

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