Chennai, July 11 (KNN) Due to the rising production costs, more than 400 spinning mills in Tamil Nadu suspended operations on July 10.

G. Arulmozhi, president of Openend Spinning Mills’ Association, told The Hindu that the strike had resulted in loss of Rs 40 crore a day as nearly 30 lakh kg of yarn was not produced by the mills on Monday.

As per reports, the opened spinning mills in Tamil Nadu are unable to compete with the units in Punjab and Haryana that are now selling yarn in Tamil Nadu at Rs 5 a kg less than the price quoted by the mills here.

“The north Indian mills are bearing Rs 10 a kg transport cost and still offering at Rs 5 a kg lesser cost. We are unable to compete with these mills. Already about 20 mills have closed down,” he said.

Most of the Openend spinning mills, which are present in large numbers in Vellakoil, Dindigul, Mangalam, Palladam, and Sulur, are medium or small-scale and are LT CT electricity consumers. 

Along with the stress to complete with units of Punjab and Haryana, the Tamil Nadu spinning mills have to also deal with increased power charges.

Last year, the Tamil Nadu Generation and Distribution Corporation introduced peak hour charges, increased current consumption charges, and hiked the demand charges. The per unit cost paid by LT CT consumers is higher than HT consumers. 

“These units are shelling out almost Rs 70,000 more a month because of higher power charges,” Arulmozhi said.

Further, cotton waste prices are increasing for the last 10 months though raw cotton prices have reduced.

M. Jayabal, president of Recycle Textile Federation, said  that the fabric woven using virgin cotton yarn was sold for Rs 200 to Rs 4,000 a metre depending on quality. 

He added that the grey cloth produced from the openend yarn, which was manufactured from waste cotton, cost just Rs 28 - Rs 50 a metre. “In such a scenario, increasing waste cotton price to almost 72 per cent - 75 per cent of virgin cotton had increased production cost,” he said.

“Our funds are exhausted. For 10 months, we are operating without profit and spending the financial resources on hand,” he added.

KNN Bureau