Ease of Doing Business for MSMEs: Textile industry in Surat is seeing a tough time. Around 15 textile dyeing and printing mills have shut down due to their inability to survive high costs and short supply of lignite coal and imported coal as a result of the Russia-Ukraine war and lower production from Gujarat mines, as per a report by The Indian Express.
Textile association South Gujarat Textile Processing Association (SGTPA) urged the authorities of the lignite seller and mining PSU (Public Sector Undertaking) GMDC (Gujarat Mineral Development Corporation) to increase the supply and reduce the prices of lignite coal, the report added, citing association’s president Jitu Vakhariya.
Also Read: MSME Ministry 2022 report card: Here’s how govt’s key schemes for small businesses performed this year
India’s textile city Surat produces four crore metres of textile cloth on a daily basis that goes through various processes of production – dyeing, printing and packaging and is then sold across the country, he said.
A dyeing and printing mill owner in business for 25 years who runs three mills told IE on the condition of anonymity, “I have seen ups and down earlier also but this time it has become difficult for us to survive. I have shut down one of my mills in Pandesara area as there is no major demand in the market. This year, the Diwali festival sale also was not good.”
Referring to the hike in the prices of lignite, imported coal, colours and chemicals, he said, “We could not manage to run all three mills so we shut down one. We also have to pay power bills, water charges and labourers’ salaries. We are not getting good orders from the market as well… However, we have not laid off any employees… we took into the two running mills and a few were taken by other mills.”
In Surat, around 350 textile dyeing and printing mills employ lakhs of migrant labourers.The industry gets lignite from GMDC mines at Rajpardi in Bharuch district and mines at Tadkeshwar in Surat district, the report noted.
“The price of lignite from Rajpardi was Rs 2,718 per tonne on March 16, 2021, which now is Rs 3,842 per tonne. Similarly, the lignite price of Tadkeshwar mines has gone up from Rs 2,137 per tonne to Rs 5,503 per tonne. Lignite price hike has affected the production cost of textile fabric at large as it constitutes around 25 per cent of the production cost to the industry. The GMDC has reduced supply to the industries, showing different reasons,” Vakhariya told IE.
Citing the reason for lower supply of lignite, Roopwant Singh, Managing Director, GMDC told IE, “This time, due to extremely intense monsoon, the average allocation of 40 per cent of approved capacity (of lignite) went gone down to 20 percent.”
Other than lignite, the cost of imported coal also shot up to Rs 8,000-Rs 9,000 per tonne in December this year from Rs 5,400 in June 2021, said Vakhariya pointing out the Russia-Ukraine clash.
The two significant resources needed in the textile production process – lignite and imported coal are put in the boiler to generate steam for colour and chemicals fixing in the fabric.
The increase in the price of these resources led to reduced production of textile by several dyeing and printing mills over the past three months, the report added.
“Fifteen such textile mills shut down after being sealed by bank authorities as the owners could not pay the loan amount… There is no major demand of textile goods in the market also,” informed Vakhariya.
Also Read: IAS officer Rajneesh to join MSME ministry as new additional secretary and development commissioner
Meanwhile, the central government’s is also planning to lay out the second edition of Textile PLI production-linked incentive scheme (PLI) early next year.
The proposed investment during the entire tenure of the scheme is Rs 19,789 crore out of which Rs 1,536 crore has been invested so far, according to a statement by the textiles ministry last month.