TN textile units looking at neighbouring states for its expansion plan

Tamil Nadu, one of the country’s thriving textiles and garmenting hubs are looking at Maharashtra and Gujarat as an emerging alternatives for their capacity expansion plan, due to the continuing power crisis across the state and effluent discharge issues at the key Tirupur hosiery hub. Karnataka too is rolling out sops to draw in investments from the neighbouring state.

Close to 200 entrepreneurs are learnt to have signed expression of interest to invest close to Rs 12,000 crore in Chamarajanagar district of Karnataka, with many of them said to be from the Coimbatore-Tirupur hub in Tamil Nadu. With power cuts increasing to nearly nine hours a day in several parts of the state (Chennai being an exception), industries are badly hit by the drop in production. Industries in TN suffer at least eight hours of load shedding every day, apart from peak-hour restriction of four hours. Textile mills are forced to use generators when there is no power supply and those who are unable to use the generators because of high cost of fuel have cut down on production, a representative of the Southern India Mills’ Association (SIMA) said.

An evidence of this is available in the stagnant spindlage addition (increasing the production capacity of mills) over the last three years in the state, primarily due to power problem in Tamil Nadu.

With consumer sentiment in key global markets, including the US and the EU, picking up, units in Tamil Nadu are looking at alternative options to scale up capacity. Apart from Karnataka, some Tamil Nadu-based spinning mill owners have also reportedly met to discuss the possibility of shifting production to States such as Maharashtra and Gujarat, where power and raw material such as cotton are available. In order to make the transition easier for spinners, SIMA is learnt to have recently organised a meeting where officials from Maharashtra and Gujarat invited local spinners and promised a package for investors from Tamil Nadu.

Karnataka, on the other hand, has formalised a policy ‘Suvarna Vastra Neethi’, specifically keeping in view the requirements of textile entrepreneurs from Tamil Nadu, state government officials indicated.

A recent study by industry body the Associated Chambers of Commerce and Industry of India (Assocham) revealed that over two lakh jobs were lost as over 2,650 textile factories remained non-operational in Tamil Nadu during 2000-2010. Of the total 17,987 textile factories across India, about 12,688 were operational and about 5,300 non-operational as of 2010-11, said the study titled ‘State-wise assessment of textile sector & recommendations’. Of this, Tamil Nadu alone has over half of the non-operating factories.

Tamil Nadu alone accounts for about 54 per cent of non-operating textile units followed by Gujarat (16 per cent), Maharashtra (over 10 per cent), Punjab (over 4 per cent) and UP (over 3 per cent). The five states together accounts for about 88 per cent of these non-operating textile factories according to the study.