Textile mills in Tamil Nadu face multiple challenges to sustain business

Textile mills in Tamil nadu are hit by multiple issues and are in a transformative phase

For almost two years, textile mills in Tamil Nadu are hit by slump in demand, high power costs, and relatively higher raw material prices. The industry is seeking measures from the Central and State governments to address its challenges so that it does not lose its market to players from other States.

About 2,100 textile mills in the State, with 24 million spindles, have seen production dwindling in the last two years to such an extent that almost 500 units have stopped production and 1,000 more units run only a portion of its capacity.

Ravi Sam, former chairman of the Southern India Mills’ Association (SIMA), said yarn supplied by textile mills from States such as Gujarat, Maharashtra, Odisha or Madhya Pradesh was ₹20 to ₹25 a kg cheaper than Tamil Nadu.

According to A. Sakthivel, honorary chairman of the Tiruppur Exporters’ Association, the knitwear units in Tiruppur had started buying yarn from mills in other States as these units supplied at competitive prices.

S.K. Sundararaman, chairman of the SIMA, said textile mills in Tamil Nadu made yarn for multiple purposes and in different qualities. “Hosiery yarn (supplied to garment units in Tiruppur) is truly a commodity,” he said. It was estimated that less than 100 mills supplied hosiery yarn to knitwear units in Tiruppur. But, they were losing that market.

The mills in Tamil Nadu were in a transformative phase. They need to invest in integrated facility and get into value addition, or move to production of higher count yarns, or get nominated by garment buyers, he said.

A leading textile mill owner in Coimbatore said some of the international garment brands had nominated some of the textile mills in Gujarat as suppliers of yarn for the garments to be made for these brands. So, the garment manufacturers had no option, but to source yarn from these mills.