The Hindu Business Line : Textile engg sector unable to cope with growing demand for machinery

THESE are happy days for the textile engineering sector in the country. The cash registers are ringing and the order books are full. The sector did business worth Rs 1,650 crore in 2004-05, up Rs 250 crore from the year-ago period.

However, despite the bull run, the textile industry is facing shortage of machinery. Textile companies today have to wait 12-24 months for delivery of machines, while the normal delivery time is 10-12 months.

Lakshmi Machine Works (LMW), Coimbatore, does not find it easy to meet the rising demand.

"Supplying machinery to new projects is taking 18 months but we hope to reduce the delivery time to 10-12 months in 2006-07 with the help of our new capacities," said Mr R. Rajendran, spokesperson for LMW.

According to Mr C.V. Radhakrishnan, Advisor, Textile Machinery Manufacturers Association, the delay in delivery of the machines is due to two factors. As textile companies are expanding and adding capacities rapidly supply of machinery is not able to keep pace with demand.

Secondly, the Technology Upgradation Fund Scheme (TUFS) of the Textile Ministry, which gives financial incentives to the textile companies, is likely to end by March 2007. Therefore, textile companies wanting to take full financial advantage of the scheme are racing to place orders for the machines.

In the next five years, India would need 12 million spindles given the growth of the textile industry but the textile engineering industry would be able to provide only 10 million spindles, Mr Radhakrishnan said.

Products such as textile ring frames, a major component in textile processes, are not preferred in spite of the low Customs duty, as it is 30 per cent more expensive than indigenous frames.

The major delay is in the delivery of spinning machines. These machines are customised to suit individual requirements. Their current delivery time is 18 months, whereas industry norm is six-eight months. They are almost running one year behind schedule.

Mr S.K. Tayal, Chairman of KSL and Industries, told Business Line that established textile companies are not facing the problem of machinery shortage to the extent faced by medium and small players.

The textile industry went through a depression between 1990 and 2003. Therefore, machine manufacturers too suffered.

Small and mid-sized textile companies that are not expanding business in a big way but in a piecemeal manner are facing problems, Mr Tayal said.

On Indian textile manufacturers sourcing Chinese machines, Mr Tayal said the Chinese machines are better and in some cases the best available.

Large German, Japanese and British textile manufacturing companies have set up their base in China. And to make matters worse for Indian manufacturers, their delivery time is three-six months, Mr Tayal said.