The Hindu Business Line : TN spinners eager to invest in weaving machines

The motivation behind their `unintended' forward integration plans is clearly the soft-loan package these spinners stand to get from the Centrally-sponsored technology upgradation fund (TUF) scheme for their new investment on weaving capacity.

They have decided to acquire weaving machines, as the fabric produced by the spinners, converting their in-house yarn in the form of unprocessed cloth, up to certain value cleared for sale, will save excise and sales tax liability, the textile industry sources say.

`Quite a many spinning mills are of late showing greater interest in investing on weaving machines and most of them prefer to invest on used imported looms of less than 10-year-old vintage which will qualify for the concessional loan if these looms are bought on banks/FIs funded route', said Mr Mohana Sundaram, promoter of

Sharanya Marketing, a local firm that deals with second-hand imported looms.

Though the number of such spinning mills expanding into weaving activity is at present limited and is perceived to be around one per cent of the State's estimated 1,600-odd textile units, the trend is, however, towards the spread of the `composite' mill culture as the spinners increasingly prefer to use their `quality' yarn for in-house fabric manufacture by installing the shuttleless looms, instead of selling it at low prices in today's competitive market, says Mr Mohana Sundaram.

His marketing firm sells the second- hand imported looms in all major textile centres across the country.

The spinning mills investing in weaving machines are, are new-breed spinning mills, which have some firm linkage with export market, either offering their product to exporters directly or supplying to the merchant exporters, Mr Sundaram told Business Line.

The industry sources say that the market preference for the used weaving looms in this region is the projectile looms of wider width (in the 360cm and 390 cm range models) and these models are increasingly preferred by the investors producing grey sheets or for made-up applications.

Among the popular projectile second hand looms imported and being used in the weaving sheds in Palladam, Somanur and Avanashi clusters are the TW-11, PU and P7000 models, whereas in the case of new project promoters in Salem and nearby areas, the used rapier machines are preferred.

The Ministry of Textiles, in order to encourage the pace of modernisation of the domestic textile weaving sector, has allowed the import of used shuttleless weaving machines with a vintage of 10-years and below and installation of these models would be entitled under the TUFs, which will get the 5 per cent rebate in the interest chargeable for the term lending availed from the banks/FIs.

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