High costs, stiff labour laws drive textile mills to B’desh
Hamstrung by liquidity crunch, soaring costs, frequent power outages (around eight-ten hours a day in parts of Tamil Nadu and Andhra Pradesh) and archaic labour laws, many domestic textile companies have gone abroad in recent years, mainly to Bangladesh, or are looking for acquisitions, say several textile industry executives. Worse, mills that have not yet set up base in Bangladesh are also opting for sourcing supplies from there, they add.
Arvind Mills is expanding its denim manufacturing capacity by around 27%, or 30 million metres, by setting up a plant in Bangladesh in a joint venture with Nitol group — expected to be completed in a year — with a projected investment of $60 million. The Aditya Birla Group inked a deal in July to buy assets of Ontario-based Terrace Bay Pulp Mill for roughly $110 million through a special purpose vehicle in which two group companies — Grasim Industries and Thailand-based Thai Rayon Public — would hold stake. Its move was aimed at achieving higher growth in the viscose staple fibre business, of which it’s a pioneer, through an integrated business model spanning the entire value chain, from plantation to pulp to fibre.
Surat-based polyester yarn maker Nakoda Limited has acquired manufacturing facilities at South
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