Economy

South India Spinners body calls for halt to production

Our Bureau Coimbatore | Updated on July 12, 2011

The South India Spinners Association (SISPA) has given a call to its member mills to halt production from July 14, citing supply-demand mismatch, huge pile up of inventory.

The Association President, Mr S.V. Devarajan, said that the mill sector would have no option but bring yarn production to a complete halt till the situation improves. “We are facing a situation of glut today. Inventory pile up is huge. Unless some of it is offloaded in the market, we cannot operate the mill.

A good number of units are already operating only one shift and others have cut production by 50-60 per cent. Despite initiating such measures to tide over the situation, it has only worsened. So we have decided to stop production completely,” he said.

Alleging the Government of inconsistent export policy, the SISPA chief said ‘this coupled with the frequent tinkering in bank rate is adversely impacting the manufacturing industry. The margins are squeezed and the inventory pile up is further affecting the functioning of the mill sector.”

The association has sought urgent government intervention to bail out the sector. “The Government should restore the Duty Entitlement Pass Book) scheme and duty drawback with retrospective effect; find an amicable solution to the pollution problems confronting the industry; withdraw the 10.3 per cent tax imposed on branded readymade garments; consider a one year moratorium on repayment of loans and interest; special working capital assistance at concessional rate; conversion of CC limits to term loans and advise banks to reduce the interest rate from the prevailing 15 per cent to 10 per cent.

Such measures would help the sector see light at the end of the tunnel,” said Mr Deverajan.

Published on July 12, 2011

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