Various textile companies in Gujarat, a leading textile-producing state of India, are not utilising their full capacity as raw cotton and cotton yarn prices are continuously rising. It has been anticipated that some units may face the possibility of temporarily shutting down.
Units are also facing difficulties in booking fresh orders due to the high raw material price.
As per a report published in The Financial Express, a leading business daily, if prices don’t go down, most spinning units will be forced to shut operations.
Saurin Parikh, President, Spinners Association of Gujarat and Founder of Pashupati Cotspin, said, “Already many spinning mills are incurring losses to fulfil customer commitments. Nearly 120 spinning mills in Gujarat are running at a little over 50 per cent capacity at present.”
He also added that weavers as well as international buyers are not willing to pay the higher prices of cotton yarn, most spinning units are unable to increase prices of end products in proportion with raw cotton rates.
Chintan Thaker, President, Welspun Group, said “Our two units in the state are operating at 60 per cent capacity. Our international buyers are not willing to absorb increased prices of raw materials. In some cases, we are supplying textile products despite making losses to fulfil prior commitments.”
Known for fabric, terry towels, denim and other textile products Chiripal Group, Ahmedabad has also cut production up to 20 per cent.
Not only spinning mills or large textile group, even apparel manufacturers are also facing production cuts. Vijay Purohit, President, Gujarat Garment Manufacturers Association (GGMA) said that it is extremely difficult to run apparel manufacturing unit as prices of fabric have skyrocketed especially when majority of the apparel manufacturers are MSMEs.
If cotton prices don’t come down, many units will close down in a couple of months, causing huge job loss.
