Dollar crash throws job working units into trouble
M. Gunasekaran
Knitters association says it has lost 30 p.c. business
TIRUPUR: It is not just big garment exporters who burnt their fingers in the dollar crash vis-a-vis the Indian rupee. Players down the line - job working units at various levels in the textile value chain – too are in trouble for the last three months.
“Garment exporters are hesitant to take fresh orders owing to the strengthening of the rupee. Fearing losses they reduced the volume of business and are hesitant to source yarn. As job working knitting units we have lost around 30 per cent of business for the last couple of months,” says South India Imported Machine Knitters Association president P. Natarasan.
The Tirupur Industrial Federation (TIF), an umbrella association for the job working units, has raised serious concern over the downward trend. TIF president Ahill M.S. Mani says the fall of the US dollar affected the exporters directly but the job working units were hit indirectly by this.
Import
The units were already facing trouble from the import of processed fabrics from China to the dyeing units facing closure following non-adherence to pollution control norms, Mr. Mani said. He said the sudden increase of interest rates by five per cent had added to their woes. “The increasing interest rates on loans have almost become doubled, which nobody could sustain,” he added.
He cited non-disbursal of subsidy under the Technology Upgradation Fund Scheme for the textile units for the last one year. With the persistent problem of labour shortage, small and medium job working units were forced to pay higher wages.
Mr. Mani said the units, already facing underutilisation of their machines worth crores of rupees, were struggling to repay loans. “If the trend continues for sometime, the units will lose their productivity and efficiency and the loans will turn non-performing
assets,” he feared. Thousands of workers would be jobless.
TIF suggested formation of a tripartite committee comprising representatives from the State and Central Governments and industry to take stock of the situation.
Stating that the job working units were the backbone of the burgeoning knitwear exports of Tirupur, Mr. Mani wanted cut it interest rates and subsidy in electricity charges to the units to overcome the crisis.
Printer friendly
page Send this article to Friends by
E-Mail
