Ease of Doing Business for MSMEs: Textile mills in Tamil Nadu may reduce their utilisation of cotton till the end of Q3 of the current fiscal year amidst slowing demand overseas for textile and clothing products, as per a report by The Hindu.
The findings are from the survey by the textile industry association, Indian Texpreneurs Federation (ITF) of 132 textile mills in the state of Tamil Nadu which have a total of 61 lakh spindles.
The total consumption of these mills in Q3 (October to December) last year was 15.37 lakh bales of cotton whereas this year the amount is expected to reduce to 10.56 lakh bales during the same period.
As a matter of fact, the average capacity utilisation in the mills that use cotton was just 50 per cent in the state. Also, 74 per cent of the mills had reduced capacity utilisation voluntarily due to low demand.
In fact, around 6 per cent of these units have shifted fully to man-made fibre and 11 per cent have increased the use of man-made fibre along with cotton.
Textile mills in the state, one of the largest cotton yarn producers in the country are expected to consume 10 lakh bales of cotton less in these three months compared to the same period last year, said convenor of ITF, Prabhu Dhamodharan.
In fact, the demand for man-made fibre (MMF) products is relatively better and capacity utilisation in textile mills that consume MMF is higher at 71 per cent, he told The Hindu.
The perception amongst international buyers regarding cotton textiles is that its demand will pick up during Christmas. Moreover, if the inventory for textile goods is exhausted, the demand will revive during the last quarter (Q4) of this financial year resulting in increasing improved production.
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At present, the demand for textile remains low for this quarter and thus the demand for cotton is also expected to remain staggered, said Dhamodharan.
Earlier in October, Dhamodharan had said that at least 25 companies that manufacture garments or home textiles in the western districts of Tamil Nadu are expected to invest in the range of Rs 15 crore or Rs 30 crore under the Production Linked Incentive (PLI) scheme for the textile sector.
