An 84-year old farmer’s court injunction has converted a booming export hub into a ghost town, causing exports to plummet and businesses to relocate.
This summarises the state of affairs in Tiruppur— a town near Coimbatore in Tamil Nadu that accounts for almost 80 per cent of all the cotton knitwear exports from India. Once a bustling place with great ambitions, Tiruppur is facing a devastating reversal of fortunes because of the deadly industrial effluent that its industries have emptied into the ground and rivers nearby, as well as the resulting contempt order that Kandaswamy filed in the Chennai High Court some time ago. This order has recently forced the industry to shut down.
The Chennai court order has meant the demise of a once-booming business in knitwear. As an impact of the closure, the first-quarter knitwear exports have declined by Rs 1,200 crore this year alone and exporters expect a loss of Rs 4,000 crore for the year. According to some estimates, the industry is bleeding Rs 10 crore every day. “At least 45,000 workers, who were working in these industries, have been left with no work and have returned to their villages,” says S Nagaraj, president of the Tiruppur Dyeing Association.
GHOST TOWN
The impact is more than visible on the streets of Tiruppur. In December last year, traffic was reduced to a crawl on its narrow roads. Now, however, they have a deserted look about them. “I can zip through the town now,” says Hariharan, who operates a taxi service. “After January, there has been no traffic on the streets,” he adds.
Naturally, anyone who has benefited from Tirupur’s past boom has been hit badly, especially the likes of hotel owners and mobile-phone sellers. According to Ashok Kumar, district head, Tirupur Mobile Phone Services Association, in the last four months alone around 30,000 connections have been disconnected. “Till January, there were about 2,500 shops here involved in recharge, with an average collection of Rs 2.5 to 3 lakh a day. This has now come down to Rs 1 to1.5 lakh,” says Kumar.
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THE RISE OF A BOOM TOWN
Two decades ago, Tirupur was relatively unknown. Veterans here say the shift towards it began after numerous strikes in Kolkata during the 70s—then, the dyeing-hub of India—forced industry to look for an alternative place. Since Tirupur was already involved in bleaching, and it was close to Coimbatore, dyeing units began to emerge. However, a real change in the town’s fortunes occurred after liberalisation in the 1990s. Then, total exports from the town were Rs 289.85 crore, rising to Rs 12,500 crore last year.
In 1996, however, seeds of the long fight between the industry and the area’s farmers were sown when the Taluk Noyyal Canal agriculturists filed a petition in the Madras High Court to put a stop to dyeing companies releasing effluents into the river. The matter came to an end after the dyeing companies agreed to take steps to reduce the release of effluents.
STRUGGLE TO SURVIVE
For Tirupur’s garment manufacturers, the court order is the final blow in a series of recent setbacks. “We have not completely emerged from the 2007 recession and now, because of the dyeing units being forced to close, our margins have further shrunk by 10-15 per cent,” says a garment manufacturer who has an annual turnover of Rs 30 crore. The reason? “We are forced to send our garments to other places for getting them dyed,” says P Nataraj, Managing Director of KPR Mills. “We have lost 30 per cent of our business. It is very difficult to sustain this mode of working in the long run. It is not feasible. The government and the industry have to find a permanent solution,” he adds.
SOLUTIONS
One of the solutions being floated is the construction of the Marine Discharge Plant, which would transfer effluents from all the bleaching, dyeing and processing units of the state through a common pipe in the sea. The Thirteenth Finance Commission had also allocated an amount of Rs 200 crore for this project. As of now, no work has started on this project.
On August 2, the Tamil Nadu government also gave a Rs 200-crore loan to the affected units on zero interest. In addition, the government would also pay a Rs 18-crore compensation to farmers who were affected by the pollution. Plus, a high-level committee under the textile ministry, headed by the Textile Secretary Rita Menon is also meeting on August 24 to take stock of the situation. However, in spite of the government’s efforts, manufacturers are still sceptical. “Till now the government has failed to perform its role properly,” says Raja Shanmugham, managing partner at Warsaw International.
If this is indeed true, then these manufacturers have only one entity they can rely on—themselves. “There are technologies available, which can be adopted by the dyeing units in Tirupur,” says J Thulasidharan, chairman, Southern India Mills’ Association (Sima). However, manufacturers don’t want to use them as they have an effect on profits.
FLIGHT TO FOREIGN SHORES
Not surprisingly, other countries are taking over the shortfall created by the Tirupur impasse. “Tirupur’s loss is India’s loss,” says A Sakthivel, president of the Tiruppur Exporters Association. “The confidence of our buyers is falling as we are unable to complete the orders on time. Most of the international buyers are moving towards China and Bangladesh,” he adds. Meanwhile, as a temporary solution, manufacturers are sending their garments to places such as Ludhiana, Kolkata, Surat and Mysore for dyeing. However, they say that this has led to a 15-20 per cent increase in the cost of manufacturing, and a sharp drop in demand.
A more permanent shift to alternative places has also already begun. “Sima has set up a company called Sima Textile Processing Park, which has set-up an industrial park in Cuddalore,” says J Thulasidharan, Chairman, Sima. (Sima). “So far, ten units form Tirupur have come up there,” he adds.
Farmers allege that the manufacturers of death haven’t yet completely stopped operations. “In spite of the Court order, there are still some units that continue to dye. Last week, a team from Chennai visited and sealed few units after they found that they were still dyeing,” says Kandaswamy.
Still, it is only a matter of time before these, too, are shut down, leaving the nation to simultaneously cheer the dismally few successful interventions to protect and preserve the environment and human lives, while lamenting the death of an industry with much financial promise.