COIMBATORE: Coimbatore-based Open End Spinning Mill Association on Friday announced that more than 600 Open End (OE) spinning mills will halt production from November 7 as they are unable to withstand the rising cost of raw material and decreasing yarn price.
Speaking to media persons, the president of OSMA, G Arulmozhi said mills have been procuring cotton waste from spinning mills at a hiked price. “With the cotton waste from spinning mills, we produce 25 lakh kg of grey cotton yarn, and with the plastic PET bottle fibre and post-garment cutting wastes, we produce 15 lakh kg of coloured cotton yarn daily. We send these to power loom and handloom units in the state, and they manufacture products like bed sheets, lungis and towels,” he said.
“We have been buying cotton waste from spinning mills at a higher cost for the last year. Spinning mills sell us waste cotton at 60% of the price of cotton. If calculated based on this, if a kilogram of cotton costs Rs 165, waste cotton should be sold for Rs 97 per kg. However, we are now buying it for Rs 117 per kg,” he said. “Despite paying a huge price for the raw material, the manufactured yarns are not getting at a fair price in the markets today,” he added.
He said that due to the hiked tariff, including peak hour and fixed demand charges, the mills are paying huge EB bills. On the other hand, the 11% tax charges levied on cotton import affects OE mills. Arulmozhi urged the state government to reverse the fixed demand charges. He added that more than 600 mills will halt their production as a protest from November 7 to 30 and due to the protest, Rs 60 crore will be lost per day.