Ahmedabad: As the demand for fabric has declined in the domestic as well as international market, the textile processing units are bearing a deserted look. Left with no choice, these units are forced to cut production by a significant 40%, according to industry estimates. Gujarat is home to more than 600 textile processing units.

Nitin Thaker, president, Ahmedabad Textile Processors’ Association (ATPA) said, “This situation in the market is very bad because of lack of demand for fabric. Due to this, unsold inventory of goods be it garments or fabrics remains piled up with retailers and wholesalers. As a result, the demand for fabric has significantly dropped.”

Roughly 90% of textile process houses in Gujarat are jobwork-oriented units. “When the demand drops, it will have a cascading effect on all forms of textile industry be it spinners, weavers, processors or garment makers. The situation is worse for smaller process houses in Gujarat,” Thaker added.

Since textile processing units are forced to cut production, industry revenues are adversely hurt. “Processing units are capital-intensive owing to the cost of machines in addition to the cost of environment-compliance in the form of common effluent treatment plants (CETPs). The funds that the government was supposed to release under Textile Upgradation Funds (TUFs) have still not been released. At the same time, dwindling demand has made it further impossible to absorb overhead costs because our payment cycles have extended from 90 days to 180 days,” said Malav Shah, proprietor of an Ahmedabad-based textile processing unit.

The production cut has also hit employment in the industry. “With revenues getting impacted, we do need to cut overhead costs. However, laying off labourers is not a solution. Owing to the monsoon season, many of our labourers have gone to their home-states for sowing and due to this, part of our production cost is reduced. Depending on the cashflow situation, some of the units have also reduced the number of working days to four or five days in a week and even reduced number of work shifts from three in a day to two,” said Naresh Sharma, owner of a textile process house in Narol area of the city.

“If the demand does not show further signs of improvement, units may stare at a shutdown,” Sharma added.

Published On : 30-08-2019

Source : Times of India