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Lack of liquidity baffles Surat textile industry

04
Nov '08

Few months back, textile industry of Surat was engulfed by severe problems, with number of manufacturers facing closure.

Processing houses in Surat mostly import raw materials like chemicals and dyestuff from China. Since the supply of these was scarce around Olympics, the processing houses were forced to cut production by 30 percent. This eventually led several weaving units into a dire state.

However, issues today are completely different.

General Secretary of Federation of Surat Textile Traders Association (FOSTTA), Devkishan Manghani, explained to Fibre2fashion, “The shortage of chemicals and dyestuff is an old problem and has been overcome. We are getting sufficient chemicals from China these days. About a month back, due to power and gas cuts the processing houses were not able to produce sufficient amount of processed fabric. This is also only a negligible obstruction now.”

Even then, Surat textile industry was unable to capitalize on the raw material price drop. Experts say that the lack of liquidity, caused by factors that are beyond a country's control, is the key reason for the situation.

Mr Manghani stated, “Due to various problems like slowdown in international economy, unexpected violence and so on, production of textile industry has been hampered. Infact, only 65-70 percent of our seasonal Diwali target was achieved this year. Nevertheless, the situation is reasonably strong. Presently, Surat alone is producing grey fabric of around three crore meter per day.”

Fibre2fashion, News Desk - India

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