COIMBATORE: The federation of MSME spinning mills on Thursday said members would stop production and sale of yarn indefinitely from Saturday (July 15) due to rise in operating cost.
Addressing media, office bearers of federation comprising South Indian Spinners Association (SISPA), Open End Spinning Mills Association (OSMA) and India Spinning Mill Owners Association (ISMA), said they unanimously arrived at the decision to stop work as all mills are facing financial losses.
S Jagadesh Chandran, secretary of SISPA said, “Spinning mills in the state have been facing unprecedented losses in the last few months. For the first time in two decades, export of yarn and textiles declined by 28%. Today the price of cotton candy is Rs 58,000. The price of 40’s yarn is Rs 235 per kg. Clean cotton costs Rs 194 per kg. We are unable to meet expenses like bank loan repayment, cotton purchase payments, electricity bills, GST etc. If the situation continuous, the spinning mills will soon become non-performing assets (NPA) and mills risk permanent closure,” he said.
G Venkatesan, vice-president of SISPA, said around one crore spindle units will stop functioning which would affect production of 35 kg lakh yarn per day. The revenue loss will be Rs 85 crore per day and 11 crore units of EB will not be consumed. Most importantly it will render around ten lakh people, including two lakh workers, jobless.”
The federation, further, appealed to the central government to withdraw 11% import duty on cotton and reduce bank interest to 7.5% from 11% - 12%.
Rs 85 crore
The revenue loss per day when around one crore spindle units stop operating. It will also affect the production of 35 kg lakh yarn per day