Coimbatore, May 23 (KNN) The federation of MSME spinning mills in Tamil Nadu has announced that it has cut production by 50 per cent unable to bear loss due to rising operating cost.

According to a report by New Indian Express there are 1,500 spinning mills and 650 open-end mills in Tamil Nadu.

Employing around 3 lakh labourers and producing 70 lakh kg of yarn per day.

In all, they consume 1.50 crore units of electricity a day and pay around Rs 10.75 crore as charges per day.

Addressing a joint press conference in Coimbatore on Monday, office bearers of the federation, including South Indian Spinners Association (SISPA), Open End Spinning Mills Association (OSMA) and India Spinning Mill Owners Association (ISMA), said spinning mills are forced to sell yarn at throw away prices as demanded by dealers, reported the newspaper.

G Subramaniam, president of ISMA warned that spinning mills are at risk of being paralysed as they are not able to get suitable price for yarn.

“Since there is a demand and supply mismatch, we have to sell yarn at a lower price. The volume of yarn and fabric imported from Bangladesh, Vietnam and China has increased abnormally, which is the reason why we are not getting fair price for yarn produced in by domestic mills,” Subramaniam.

S Jagadesh Chandran, secretary of SISPA, said, “The present interest against loan has been increased to 7.75% to 10.75% and increase of electricity tariff and demand charge has worsened the condition of the mills. Due to increase in interest rate, cost of yarn production has increased to `5 per kg and `6 per kg due to increase of electricity tariff.”

The federation has urged the centre to reduce the interest rate to 7.75 per cent against loan and demanded one-year holiday against repayment and interest payment.  (KNN Bureau)