Spinning mills in Gujarat have reduced their production to 60 per cent of installed capacity, in order to tackle overhead costs.
Dr Bharat Boghara, Chairman, All Gujarat Spinners’ Association (AGSA), said, domestic demand has fallen drastically because retail business has taken a major hit. Over and above this, demand in the international market too dried up, which was a bigger hit to industries, because 60 per cent of the cotton yarn produced in mills across Gujarat is exported. With this, industry players were left with no choice but to cut production levels as piling up inventories will not make sense.
Gujarat is home to at least 150 spinning mills with an installed capacity of 35 lakh spindles. Industry players also attribute the decline in growth to labourer crisis. A majority of the laborers employed at spinning mills come from Bihar, Jharkhand and UP. After the mass migration of laborers during lockdown, very few have returned. Initially it was fine because the demand had dried up. However, since July, when the orders have gradually begun pouring in from countries such as Bangladesh, Vietnam and even some of the European markets, industries are unable to ramp up production, said Saurin Parikh, President, AGSA.