Chennai floods, workers’ agitation hit city’s textile biz

An estimated Rs 300 crore worth of orders have been cancelled by buyers in Chennai in the past fortnight because of the rains. Out of Rs 110 crore worth of daily supply of saris, home textiles and dress materials from Surat, textile products to the tune of Rs 30 crore are despatched to markets in southern India. Supply to Chennai has come down to 80 per cent in the last few days because of the rains.

The year 2015 has not started on a good note for Surat’s textile industry. The industry, which is grappling with weak demand for polyester fabric and instances of defaults to the tune of over Rs 150 crore, sees its hopes crashing further because of the floods in Chennai and the ongoing workers’ agitation.

The powerloom sector has a production capacity of 3 crore metres of fabrics per day, weaved on over 6 lakh powerloom machines. Over 3.5 lakh powerloom machines have stopped working in over 12,000 units in Jolva, Palsana and Laskana in the last two weeks because of the agitation by workers who are demanding a wage hike.

“South India is a major market for textiles from Surat. Chennai, Rajahmundry, Hyderabad, Bangalore, Thrissur, Kozhikode, Kochi, Vijaywada and Cuddalore are important textile centres in south India. Rains have hit these centres hard which have adversely affected the textile industry here,” Southern Gujarat Chamber of Commerce and Industry’s (SGtextile committee chairman Devkishan Manghani said.

“Textiles worth Rs 30 crore are sent daily to south India from Surat. Supply to south India has come to a halt because of the rains and it may take at least three months for normalcy to return there. The losses to the textile units may run into hundreds of crores of rupees,” Manghani added.

“It is that time of the year when demand for saris and dress materials is nil in north India, so we have to depend on markets in south India for business. Next three months would be tough for Surat’s textile industry,” said Jay Lal of Federation of Surat Textile Traders Association (FOSTTA).

“Most traders supply textiles to markets in south India on credit. Payments have got stuck because of the rains, disturbing the turnover chain. If the payments do not start coming soon, there will be a monetary crisis staring the textile sector in the city,” Jay Lal added.

Box: SITUATION PER SE

Total weaving units: Over 25,000

Total powerloom machines: 6.5 lakh

Powerloom machines closed: 3.5 lakh

Daily production of man-made fabric (MMF): 3 cr m per day

Production loss due to workers strike: Over 2 cr m per day

Daily supply of textile products from Surat: Rs 110 cr per day

Daily supply to southern India market: Rs 30 cr worth textile products per day Read More…