• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• Smartbuy

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureaus

Coimbatore/Chennai, July 11 The cotton textile industry is not surprised that it is among the laggards as far as the IIP (Index of Industrial Production) numbers are concerned.

“It has nothing to do with the market. It has everything to do with power availability,” said Mr Manikam Ramaswami, former chairman of the Southern India Mills’ Association.

The State’s textile sector is facing a severe power shortage with mills facing power cuts of up to eight hours a day, according to him. It is this that has resulted in a drop in production of the mills.

According to industry representatives, Tamil Nadu accounts for a third of the country’s textile business and capacity utilisation in the mills has suffered by 25-30 per cent due to power cuts.

A host of other factors have also added to the textile mills’ woes. Financing and input costs have gone up. The larger mills were able to get bank loans at 7.5-8 per cent interest in 2007. This has now gone up to 14-15 per cent. Raw cotton prices have increased from Rs 20,000 a candy to Rs 30,000 a candy, according to the representatives.

The appreciation of the rupee vis-À-vis the dollar resulted in a drop in export income. To offset this, when the textile companies entered the domestic market, they were confronted with a lower realisation in domestic sales because of competition.

According to the representatives, inadequate local supply of cotton has forced the mills to buy cotton from Punjab and Gujarat, resulting in huge transportation costs.

More Stories on : Textiles | Power | Tamil Nadu

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Industrial growth slumps to 3.8% in May

Copyright © 2008, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line