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Yarn spinning mills demand stimulus package
17
Jan '09
The yarn manufacturing sector, in which heavy investments had been made in the last two years, is facing troubled times, due to the current ongoing global recessionary trends. To be able to survive through this difficult phase, the yarn manufacturers have demanded that the government immediately announce a stimulus package for the spinning industry.

According to them, 30 percent of their production capacity is lying idle due to the slowdown and they were also affected to a great extent by cheap imported yarns which has flooded the local markets. They wanted the package on the lines announced by countries like India, China and Pakistan to survive as well as stay competitive.

They have demanded a hike in the cash incentives from the current 5 percent to 10 percent and introducing a 5 percent R&D fund on the lines done by Pakistan. They have added by saying that they want these incentives on a purely temporary basis and the government was free to withdraw the same as when the situation shows signs of improvement.

They said that they were unable to compete with Indian manufacturers of yarn as their government had provided incentives as well as they did not have to import cotton and capital intensive machinery. This has resulted in yarn from India being quoted at 10-15 percent less, than the rates, quoted by Bangladeshi spinning mills for the same comparative yarn.

fibre2fashion.com spoke to a section within the Bangladeshi spinning sector who said that, “Yes, the textile and yarn manufactures have demanded stimulus package from the government in order to benefit the industries during this current recession period and we are represented by Bangladesh Textile Mills Association (BTMA), which has put forth various demands.”

They also added by saying that, “Main demand is to reduce rate of interest which is current ruling around 14 percent and to create a fund for R&D sector whereby, some work can be carried on to give benefit to the textile industries. We have also demanded to extend the term of the bank loans given to the spinning mills.”

The BTMA is very positive about the government accepting the demands and expects to get approval for the same within a period of one month. According to latest data available, in 2008 a total of 43 new spinning mills were set up adding up to 9,44,744 spindles, compared to 2007, when 28 mills were set up with 4,42,848 spindles.

Fibre2fashion News Desk - India

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