Processing remains the weakest link in the supply chain

by Dheeraj Tagra

07-September-2019  |  6 mins read

Textile processing

In the supply chain, processing is one of the weakest links and processors continue to struggle owing to various reasons. Pollution and heavy investment for state-of-the-art infrastructure are some of the issues that are still prevailing in this domain. Similarly, while some states give specific incentives to promote processing, in some other states, new norms of various authorities create more troubles for processors. And the problems continue! In discussion with various processors across the significant hubs, Apparel Resources gets update on the processing industry.

North India struggling on PNG

Neither cost nor deadlines are feasible! Cost pressure is one of the major challenges for almost all stakeholders in textile and apparel industry. Recently, the Central Pollution Control Board (CPCB) sent orders to the State Pollution Control Boards of the National Capital, Rajasthan, Uttar Pradesh and Haryana to direct the industrial units (wherever gas supply is available) to either switch to Piped Natural Gas (PNG) within given deadlines or close operations.

Since gas is four times costlier than the present sources of energy which include Low Sulphur Diesel (LSD), husk and coal, industry is of the strong opinion that it is not possible for them to switch over to gas in such a short time. So far many units in these states have not yet opted for PNG. The industries have already taken the hit after a ban on the use of petcoke and furnace oil as per an order issued two years back. Representatives of various associations met several ministers in this regard and requested their immediate intervention.

Aman Sharma, VP – Processing, Gupta Exim, one of the leading apparel exporters of Delhi-NCR, told, “There are no orders and overall costing is increasing, so export houses can’t even think to increase the price. New rules for energy consumption are increasing cost multifold and there is no support from the Government. This is a big concern for us.”

Many processing houses are already forced to underutilise their capacities and increasing challenges can have further impact on the capacity usage. “We are only using 70 per cent of our capacity and as cost is supposed to increase around 20 per cent, business can shift from Delhi-NCR. Earlier processing houses like us were facing issue of ZLD, and now PNG. Survival in business is becoming very difficult,” said Dipesh Keswani, Director, MH Textiles, Faridabad. To remain in business, processors like Dipesh and others are working hard to ensure timely delivery and quality as they don’t have any other options. In Rajasthan, the three major processing hubs – Jodhpur, Pali and Balotra – are struggling on pollution issues from a long time. The industry has seen many ups and downs in the state because of pollution issue. Recently, the industry representatives met State CM Ashok Gehlot in this regard. The CM assured them to provide permanent solution. A new CETP will also be established in collaboration with Government bodies in the state.

In Gujarat, processors of Surat are putting in their best efforts for survival. In recent times, many of them have shifted their focus to cotton rather than on synthetic as they seem to be more in demand of a cotton base. Their efforts for energy saving are also growing be it in use of advanced technology or infrastructure, use of programmable logic controller (PLC), autoanalyzer, etc. Despite all this, their business was recently 40 per cent down.

“Polyester’s demand is not growing as it used to be. Secondly, changing fashion trends across India have a negative impact on the city’s processing community as rather than Indian traditionalwear (such as sarees, suits, dupattas), products like leggings, tops or westernwear are growing; so while earlier a woman was using 7 to 8 metres of fabric, now her use is limited to 3 metres only,” said Jitu Vakharia, President of South Gujarat Textile Processors Association (SGTPA). Despite that, Jitu is hopeful as the Government is giving some support to the industry and due to the upcoming festival and marriage seasons, business is improving. Ahmedabad, another hub of Gujarat, is also facing the heat of low business sentiments as the processors of the city shared that many of them are using just 50 to 60 per cent capacity.

Among the states offering incentives to the processing sector, one of them is Maharashtra. It is providing 45 per cent capital subsidy to processing units. Apart from this, the State Government is also giving provisions for an additional subsidy of 20 per cent to the upcoming processing and garments units in the less developed regions of the state such as North Maharashtra, Marathwada and Vidarbha. As far as benefits of these incentives at the ground level are concerned, industry is of the opinion that there has been no major change.

On the condition of anonymity, processors from various hubs have shown dissatisfaction regarding the working of common effluent treatment plants (CETPs). Overflow is also a major issue in a few hubs.

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