The Tamil Nadu textile department has called for a meeting with spinning industries in the State on Friday to look at various issues faced by the sector. The meeting comes in the backdrop of MSME units and Open End Spinning Mills based in Coimbatore on a production strike opposing the high electricity charges.

The meeting will be held under the chairmanship of State Finance Minister Thangam Thennarasu and in the presence of Minister of Handlooms and Textiles, says a letter written by the department to seven associations. These are South India Spinners Association; Indian Spinning Mill Owners Association (OSMA); Open-End Spinning Mills Association; Recycle Textile Federation and SIMA — all the five are based in Coimbatore, and Indian Taxpreneurs Federation, Coimbatore, and Tamil Nadu Spinning Mills Association based in Dindigul.

The spinning mills in the major production centre of Coimbatore is in the midst of a crisis. The members of Open-End Spinning Mills Association — Open-end spinning is a technology for creating yarn without using a spindle — resorted to a production strike from July 10 while the MSME mills in the textile city stopped production and sale of yarn from July 15 due to heavy losses incurred by them.

Raw material export

G Arulmozhi, President, OSMA, told businessline that open end spinning mills’ main raw material cotton waste export should be restricted by way of levy export duty and make them available for domestic open end spinning mills. Bank loan interest should be reduced to 7.5 per cent since entire textile sectors are in big crisis, he said.

OE spinning mills’ main raw material is cotton waste, and export should be restricted by way of levy export duty and make them available for domestic OE spinning mills, he said.

Arulmozhi said the state government increased the power tariff to LT&CT consumers, and this must be withdrawn. A 15 per cent peak hour is levied on LT&CT consumers. The charge has been increased from ₹35 per KVA to ₹150 KVA. This should be reversed immediately, he said.

In Tamil Nadu, there are 600 open end spinning mills. These mills produce 25 lakh kg grey cotton yarn from cotton waste and 15 lakh kg of colour yarn from used plastic pet bottle fibre. These mills employ nearly one lakh direct workers and another two lakhs indirectly producing goods worth nearly ₹27,000 crore, he said. Due to the production strike, the loss could be ₹30 crore per day, he added.

Demand charges

The Tamil Nadu Spinning Mills Association (TASMA) during the meeting will urge the State government to invoke Section 108 of the Electricity Act 2003, to charge the HT consumers, to pay the monthly demand charges only to the extent of 20 per cent of their sanctioned demand or up to the recorded demand alone, instead of invariably claiming the demand charges at 90 per cent level. This will help the industry, to pay the exact demand charges to the extent of their recorded demand alone and help the industries to come out of their sufferings as an instant measure, till normalcy is achieved.

“In the meeting, we urge the State government to make it’s good offices to press the Centre to remove 11 per cent import duty on cotton imports and to advise the RBI to issue suitable Policy Circular to restructure the loans of mills to come out this unprecedented crisis,” the association’s Chief Advisor K Venkatachalam.