Tamil Nadu textile mills are hoping for a gradual market recovery and improved performance this fiscal year after nearly two years of declining demand and growing production costs.
According to Indian Texpreneurs Federation convenor Prabhu Dhamodharan, the spinning business experienced a very difficult period in the fiscal year 2023–2024 as a result of low yarn demand and high inventory levels throughout the value chain.
Over the past nine months, yarn demand has steadily improved due to value chain inventory exhaustion and a 10 per cent decrease in installed spindles throughout India, which has somewhat restored supply-demand equilibrium.
There were no stocks, and the textile mills were able to sell their monthly output. According to him, some mills were currently using 70 per cent to 80 per cent of their capacity, while the larger mills were currently running at 95 per cent.
However, the price differential between domestic and foreign cotton as well as growing conversion costs continue to put pressure on profits. According to him, there is still hope that steady demand will eventually result in an improvement in margins from this fiscal year.
In order to increase efficiency over the medium term, textile mills with financial means were also investing in automation and modernisation. According to him, the mills would be able to invest in modernisation if demand continued to rise.
About 19 million of Tamil Nadu’s 24 million spindles were in use, according to S.K. Sundararaman, chairman of the Southern India Mills’ Association. One-third of these were doing well since they used only renewable energy sources. For long-term survival, an additional six million spindles should boost manufacturing efficiency and competitiveness. He recommended that they consider pursuing value-added or synthetic yarns.
Due to free trade agreements, the textile industry has a lot of chances. To obtain sustainable, additional industry sources, the mills should concentrate on a number of areas, including fibres, modernisation, and value-added yarns.
