Spinning mills to cut production by 35 pc to reduce loss
The associations representing the spinning sector have also urged the state government not to give any incentive towards spinning capacity expansion or new investments till the oversupply issue is addressed
A spinning mill (file photo)
COIMBATORE: Spinning mills have proposed to halt production, as well as cut down the scale to reduce loss in the sector.
“The spinning mills associations have proposed halting production initially for one week. Also, the spinning sector has decided to cut down production by 35 per cent or operate merely one shift to avoid distress sale and reduce loss,” said SK Sundararaman, chairman of Southern India Mills Association (SIMA), in a statement.
The associations representing the spinning sector have also urged the state government not to give any incentive towards spinning capacity expansion or new investments till the oversupply issue is addressed. “This is essential to prevent closure of large scale spinning mills,” Sundararaman added.
The spinning sector has appealed to Prime Minister Narendra Modi to extend one-year moratorium for repayment of the principal loan amount, convert three year loans under ECLGS into six year term loans, extend necessary financial assistance to mitigate the stress on working capital on a case to case basis and remove 11 per cent import duty on cotton.
The ailing sector has sought Chief Minister MK Stalin to roll back the power tariff hike for a period of one year. TN, Andhra and Telangana account for 55 per cent of spinning capacity in the country.
