South Indian yarn makers to shift their spinning units in Gujarat

The Gujarat Chamber of Commerce and Industry (GCCI) offering helping hand to the South India based yarn makers to explore affordable land to build a yarn cluster in Gujarat and also assist them to build shift to the power abundant state of Gujarat, as the Tamil Nadu and Andhra Pradesh based yarn makers are facing frequent power cuts, eating into the businesses.

So attractive has been the seven per cent interest subsidy and subsidized power tariff under the Gujarat textile policy that several yarn makers from south have submitted proposals to the state government for setting up a spinning unit in Gujarat.

The textile policy is not only offering a seven per cent interest subsidy but also power tariff is as low as Re 1 for the first five years. In terms of power costs alone, setting up a spinning unit will be Rs 6-8 cheaper than in the southern states. Hence, they are thinking of shifting their plants to Gujarat, said Sudhakar, owner of Sudha Agro. The Andhra Pradesh based yarn maker is looking at a capacity of 15,000 spindles at an investment of Rs 45 crore.

Similarly, Satya Spintex, again based out of Andhra Pradesh, is also looking at setting up a spinning unit of a capacity of 16,000 spindles.

Frequent power cuts and high costs have been eating into our margins. The textile policy released by Gujarat government offers huge benefits for players like them. They are, in fact, being assisted by the micro, small and medium enterprises (MSME) committee of GCCI in their plans to shift the base to Gujarat, said Ravidhar of Satya Spintex.

Such has been the response from among yarn makers from south India that the Gujarat government has already received proposals for setting up spinning units worth capacity of over 5 million spindles.

The response has been tremendous thanks to the favourable conditions in the textile policy. They have already received proposals from several yarn makers for a cumulative capacity of over 5 million spindles whereas their target under the policy was only 2.5 million spindles since their current capacity is around 1.2 million spindles, said a senior state government official in Government of Gujarat.

According to industry sources, investments worth over Rs 4500-5000 crore could be seen in the next one or two years in the spinning segment alone.

The state government plans to also assisting the interested yarn makers in availing funding for the project.