The Hindu Business Line : SIMA shelves plan to set up textile park in AP

Textile woes
About 12 players, with investments ranging from Rs 50-300 crore, had shown interest in setting up plants in the Nellore park.
SIMA likely to review the project after one year to make fresh proposal.

K.V. Kurmanath

Hyderabad, Jan. 6 The acute crisis in textile industry in the country has taken a fresh toll – the Southern India Mills’ Association (SIMA) has decided to wind up the textile park at Naidupet in Nellore district.

The SIMA members had paid in full for 375 acres of the 1,000 acres allocated for the park. “It would have attracted investments to the tune of Rs 2,000 crore. We, in fact, have blocked 1,000 acres more than the allocated land, anticipating demand from our members,” Dr K. Selvaraju, Secretary-General of SIMA, told Business Line.

About 12 players, with investments ranging from Rs 50-300 crore, had shown interest and prepared plans to set up plants in the Nellore park. The list included manufacturers such as Loyal Textiles and Ramakrishna Mills from Coimbatore.

If things went right, these plants would have become operational by now, providing employment to 20,000 people in the backward district.

But everything went wrong for the industry since the association had begun to put things into place for developing the park. “The rupee has appreciated steeply. Interest rates have gone up 4-5 per cent. The cost of raw material (cotton) increased by 10-15 per cent and the yarn price saw a decrease of 4-5 per cent,” he said.

‘Suffering a lot’

“The textiles industry as a whole is suffering a lot. No new project has been announced for quite some time. The mills in Tamil Nadu have another problem. They are facing power cuts in the range of 2-4 hours a day,” he said.

Andhra Pradesh, in fact, has emerged as an attractive destination, thanks to the industrial-friendly power tariff structure. An averaged sized mill could have saved Rs 4-5 crore on this factor alone.

The SIMA, however, feels that it is not the end of the road for the project. “We will review the project a year later and see if things have improved to make a fresh proposal. But for now, we have decided to wind up,” he said.

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