Home / Knowledge / News / Textiles / Defaults in textile sector on an ascending curve
Defaults in textile sector on an ascending curve
13
Feb '09
The textile and garment industry is a very capital intensive industry. Its liquidity requirements, whether fixed or working are very huge. Investment in land and machinery is substantial and after that the company needs to invest in raw materials like cotton, most of which is bought in advance during the beginning of the season, to fulfill requirements of the full year.

This has led to a huge exposure from banks and financial institutions in to the sector. The textile sector accounts for as much as 22 percent of loans extended by banks to all sectors. But since the beginning of the slowdown from September 2008, defaults in prepayments of loans have begun to shoot up from within the textile industry.

The spinning sector which has the largest exposure, from amongst the industry, has been facing problems since the last two years. Last year, there were severe problems in electricity supply, leading to cutback in productions and the industry was also faced with problems with regards to supply of gas and its pricing adopted by the then government.

But now the hens have come home to roost. The textile units have been trying to avoid a bankruptcy in the last few years. But with the wheels of motion, i.e, production and sales cycles being affected due to the recessionary trends, the textile units are facing severe liquidity problems leading to more and more defaults tumbling out of closets.

The government has assured of announcing a textile package to revive and stabilize the industry, which if not forthcoming early, could lead to disastrous consequences in the textile sector, leading to the same consequences in the banking and financial sector and has the potential to disrupt the economic cycle of the country.

Fibre2fashion News Desk - India


Must ReadView All

Apparel/Garments | On 28th Jul 2017

DuPont launches new stretchable electronic inks, films

DuPont Advanced Materials has announced availability of its newest...

Apparel/Garments | On 28th Jul 2017

Columbia Sportswear posts Q2 2017 net sales of $398.9 mn

Columbia Sportswear Company has recorded net sales of $398.9 million...

Textiles | On 28th Jul 2017

Dickies & Prana to show HeiQ textile products at OR expo

American apparel brands, workwear leader Dickies and activewear brand ...

Interviews View All

Headhonchos
Indian fashion industry

Cotton consumption will keep growing in the Indian fashion industry

Karan Toshniwal
Orange O Tec

Contemporary industry is paying more and more attention to the...

Veronique Lee
Modavanti

‘Sustainable fashion is trending upwards, slowly but surely, as people...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Silvia Venturini Fendi
Fendi s.r.l

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

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

July 2017

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

news category


Related Categories:

Planning to Take the Leap towards
Sustainability?

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.


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



X