Tamil Nadu   

Cheaper power draws textile mills to A.P.

M. Soundariya Preetha

COIMBATORE: A group of textile mills, all members of the Southern India Mills' Association, have decided to go in for projects in Andhra Pradesh, which has assured them of a dedicated line from the main 220 KVA grid and power supply at a special rate for five years.

Textile mills in Tamil Nadu pay Rs. 4.20 a unit. To help them, the association has mooted a 1000 MW captive power plant in partnership with the Tamil Nadu Electricity Board and the Infrastructure Leasing and Financial Services.

Key factor

Power cost is an important factor in yarn production and constitutes a third of the production cost. It comes next to raw material, says S.V. Arumugam, chairman of the textile mills' body.

Though many mills in Tamil Nadu have gone in for alternative sources of power such as windmills and furnace oil plants, "we can avoid the huge capital investments in such projects if power costs come down."

The mills will remain competitive only if power is available at not more than Rs. 2.50 a unit, says Mr. Arumugam. "Mills have to necessarily look at places where they can get sustained availability of power at a competitive cost."

Determining issue

At a time when textile mills are focussing on remaining competitive at the global level and expanding rapidly, power cost seems to be emerging as a determining factor for location of new plants or capacity expansion.

Ten mills affiliated to the association want to look at locating their expansion units in Andhra Pradesh, mainly because of the cheaper power.

With Tamil Nadu having 45 per cent of the country's spinning capacity, the State Government is aware of the need to provide power at a competitive rate to these units, he says.

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