The Hindu : Tamil Nadu News : Over Rs. 300-crore worth grey cloth piles up at Palladam, Somanur

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Monday, Sep 24, 2007
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Tamil Nadu

Tamil Nadu

Over Rs. 300-crore worth grey cloth piles up at Palladam, Somanur

M. Gunasekaran

Weavers fear production will come to a halt within a couple of days

Photo: M. Balaji

At stake: Grey cloth stocked at a godown of a powerloom unit in Somanur in Coimbatore district. –

TIRUPUR: The weaving community in nearby Palladam and Somanur region are struggling to sell the grey cloth produced in the last 25 days.

According to R. Ponnusamy, Powerloom Cloth Owners Association, Somanur, more than Rs. 300-crore worth grey cloth produced in Somanur and Palladam areas have been piling up in godowns as there was no takers for them.

“We sell the products to merchant exporters from Jaipur, Mumbai, Ahmedabad and New Delhi every week. Already we have a stock of three weeks’ production. We cannot afford to have a stock for one more week. A majority of the powerloom units have already started slowing down the production. I fear the production would come to a halt in another ten days,” he feared.

Rupee appreciation

Nearly 2 lakh powerlooms and 2,000 wider width autolooms produce grey cloth for exports and domestic market in this belt.

“Many cite the appreciation of rupee against dollar as a major reason for the dullness in the market. Others attribute it to the weakening U.S. market. No merchant exporter is willing to take the risk and we are facing the problem for the last six months,” Mr. Ponnusamy points out.

He says spinning mills in the region have reduced production by 25 per cent following the poor off-take of yarn.

“We have reduced the fabric cost by 5 per cent to 10 per cent and yarn prices have come down by 7 per cent. Still there is no movement of fabric,” he adds.

Stating that the Tamil Nadu textile industry has been losing its competitiveness against China, Bangladesh and Pakistan players, Palladam Hi-tech Weaving Park chairman and leading home textile exporter M. Senthil Kumar asked the State Government to immediately lift the 4 per cent Sales Tax on yarn.

Though majority of the powerloom weavers are not directly involved in exports, the fate of the business depends on exports. Mr. Senthil Kumar wanted the Government to help the industry by phasing out the Central Sales Tax at the earliest.

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