Poor management, adverse market force textile units to down shutters

Sanjay Jog

Mumbai, Oct 14: Twenty textile mills in the private sector at Mumbai have been either closed or ceased functioning or drastically reduced their production, thanks to adverse market conditions, mismanagement, hikes in wage cost, power tariff, water charges and successive government’s dillydallying over the sale of excess land.
These mills have a total strength of around 32,000 workers.

In addition to this, of the total 22 mills in the public sector, comprising 21 run by the National Textile Corporation and the one by the Maharashtra State Textile Corporation, one mill was lying totally closed and all other mills have been working at 10 to 15 per cent of their capacity. There has been highly reduced production activity in the public sector and most of the 20,000 odd workers have been getting idle wages. The Mumbai textile mills possess over 10 lakh square meters of excess land.

The list of 20 mills includes Mukesh Textile Mills, Shreenivas Cotton Mills Limited, Bradbury Mills Limited (closed down since 1982 onwards), Khatau Makanji Spg & Wvg Co Ltd, Kamala Mills Limited, Shree Ram Mills Limited, Svadeshi Mills Company Limited, Swan Mills Limited (Sewree), Swan Mills Limited (Kurla), Victoria Mills Limited, Matulya Mills Limited, Piramal Spg & Wvg Mills Limited, Mafatlal Industries Limited (Mazgaon), Mafatlal Industries Limited (Lower Parel), Standard Industries Limited (Prabhadevi), Standard Industries Limited (Sewree), Raghuvanshi Mills Limited, Hindoostan Spg & Wvg Mills Ltd (unit A), Phoenix Mills Ltd and Swan Mills Limited which was a stand alone process house (Sewree).

The Modern Mills Limited and New Great Eastern Spg & Wvg Co Ltd have been functioning under the Board for Industrial and Financial Reconstruction (BIFR).

The other 11 private mills, which have been striving to keep pace with the global competition, comprise Bombay Dyeing & Mfg Co Ltd (spinning), Bombay Dyeing & Mfg Co Ltd (textile), Century Textiles & Industries Ltd, Dawn Mills Co Ltd, Hindoostan Spg & Wvg Mills Ltd (unit B), Hindoostan Spg & Wvg Mills Ltd (Crown), Morarjee Goculdas Spg & Wvg Co Ltd (unit 1), Morarjee Goculdas Spg & Wvg Co Ltd (unit II), Prakash Cotton Mills Pvt Ltd, Ruby Mills Limited and Simplex Mills Co Ltd.

Ironically, Bombay Dyeing, Ruby, Century and Dawn were only profit making ones.

According to the Millowner’s Association (MoA), the Mumbai textile industry was in a moribund condition. “The plight of textile industry was mainly due to rise in wage cost from Rs 4,230 per month in January 1994 to Rs 6,230 in 1997 and Rs 7,860 in 2000. In addition to this, there has been hike in power tariff from Rs 2.16 per unit in 1994 to Rs 3.30 in December 1999 to Rs 4.25 in the year 2000,” the Association said. Moreover, the mills have to pay water charges including sewerage charges at Rs 35.20 per 1,000 litre. However, these charges were Rs 6 to Rs 8 at the neighbouring centres. The Association has stressed the need for the speedy clearances for the sale of land for the purposes of modernisation, rationalisation, rehabilitation, revival, restructuring, repayment of loans and retirement of liabilities. However, Maharashtra government sources told The Financial Express that though it has released a policy for speedy revival and rehabilitation to these mills, the current economic slowdown has severely hampered the process especially on the front of sale of excess land.