Processors raising job charges termed opportunistic

The processors and textile traders of Surat are at loggerheads over the hike in job charges by the former.

A meeting of the South Gujarat Processors Association (SGPA) was held at Surat Vankar Sangh, Ring Road, Surat, on Saturday. The processors expressed grave concern over increase in prices of crude oil, dyes, chemicals, colours, diesel, lignite, etc which had resulted in increased production cost.

All the processors were of the opinion that increasing job charges was the only way to tackle the increased production cost. At the end of the meeting, a resolution giving a go-ahead to hiking job charges, was passed unanimously by the processors. As per the resolution, the new job charges came into effect from Monday, September 6.

Talking to Business Standard, leading processor of Surat, Jitu Wakharia, said, "Dyes and chemicals account for almost one-third of our production cost. Prices of these have increased to a great extent in the last couple of months. Further, due to frequent hike in diesel prices, the cost of lignite, imported coal, etc has also gone up, making things even more difficult for us."

"We have hiked the job charges for the very survival of the processing industry. The decision was taken after consultations with all processors. Depending on the quality, the hike will vary from 50 paise to Re one per metre," Wakharia said.

This decision of the processors has not gone down too well with the textile traders. Wakharia is also vice-president of Pandesara Green Environment and Water Welfare Cooperative Society, one of the leading organisations working for protection of environment and industries in Surat.

Jai Lal, a member of Federation of Surat Textile Traders Association, said, "The processors have cited the increase in raw material prices as the reason behind hiking job charges. But we believe this is just an eyewash. The excise duty on processors was abolished by the central government in the recent budget, which means their production cost has gone down.

"So the processors should have decreased the job charges instead of increasing it."

He alleged that the move was aimed at profiteering.

"The upcoming festival season is peak business time for the textile industry. The hike in job charges at this crucial time is an opportunistic move by the processors to make extra profits. The decision will create problems for the textile traders.

"I hope the processors will reconsider their decision at the earliest," he added.

On warpath

• Processors say increasing job charges was the only way to tackle the increased production cost. The new job charges came into effect from Monday
• Depending on the quality, the hike will vary from 50 paise to Re 1 per metre
• Textile traders, however, allege the move was aimed at profiteering ahead of the busy festival season
• Traders say that with the excise duty on processors being abolished Budget, the processors should have decreased the job charges instead of increasing it