Gujarat ginners foray into yarn spinning
Gujarat which is the biggest raw cotton producer in India, sells 70 percent of the same outside the same as there are very few spinning mills in the state to consume the cotton. This has led a few ginners to consider forward integration and consider setting up spinning mills.
Buoyed by the rising demand for cotton yarn and a policy which permits cheap imports of second hand machinery, a few ginnery owners totaling to around 10, are contemplating setting up spinning mills in the state, albeit maybe on a smaller scale.
In the 2009-10 season, Gujarat produced 980 million bales (1 bale=170 kg) of cotton or 33 percent of India's overall cotton production and its output in the 2010-11 season is estimated at 1.06 billion bales.
Speaking on the subject, Dr PR Roy, Director – fibre2fashion said, “Companies across the textile value-chain are increasing capacity, which would spur demand for cotton yarn, so I consider this as a logical step towards value-addition by the ginners”.
Speaking to fibre2fashion, Dilip Patel, President of Gujarat Cotton Association (GCA) said, “The ginning sector has expanded rapidly in the last few years and most of the cotton grown in Gujarat flows to Maharashtra and the southern states, which means incurring high freight costs. If these mills were to be set up in Gujarat, the costs saved could mean increased profit margins for the ginners”.
Dipak Patel of Jaydeep Ginning says, “There is no spinning sector worth the name in Gujarat and since the future of cotton yarn is good and if these spinning units are set up in the state, the value-addition will remain within the state, thereby generating employment and revenue for the government”.
Ishwarbhai Thakker - Bhavani Ginning in Dhrangadhra, is of the opinion that currently spinning units are operating at very good margins and raw cotton which is sold in other southern states comes back in the form of yarn to Maharashtra, Gujarat and Rajasthan after having spent heavily on transportation in both directions. However, spinners are not drawn to the state due to the fact that electric costs are high and the government should think on those lines”.
Giving details about his spinning plant, Dilip Patel revealed, “We operate one of the biggest ginning plants in India. In north Gujarat and Saurashtra, many spinning plants are being set from imported secondhand machinery. However, we are setting up a spinning plant with the latest technology that too from India, except for one machine which is being imported from Japan, since the technology is not available in India. We hope to bring back the glorious days, when Ahmedabad was called the “Manchester of the East'.”
Throwing light on the current trends in cotton, Dilip Patel informed, “The deadline for exporting the first batch of raw cotton gets over on December 15, due to which prices have stabilized. However, I anticipate that, the prices may correct after December 5 and secondly the untimely rains have also spoilt a portion of the standing crop, which may impact prices.
Dipak Patel opined that, “Whatever, permission the government has given till date to export cotton, may not happen again as cotton crops have been partially spoilt due to the rains, due to which, the final production figures will be lower than the estimated ones, and which will be the key reason for the government not permitting exports”.
Fibre2fashion News Desk - India