Coimbatore turns hot spot for foreign textile machinery makers

The cotton city of Coimbatore is fast becoming a hot spot for overseas textile machinery manufacturers to set up their own shops.

The business made by the stalls of Chinese textile manufacturers at the recently-concluded International Textile Technology and Machinery Expo (ITGME) clearly indicates that more foreign manufacturers are interested in beginning their operations in the region.

The boom in textile industry, constraints faced by indigenous manufacturers in supplying the machinery and the cut in the customs duty of specified textile machinery from 15 per cent to 10 per cent are the luring factors for the foreign firms.

The Chinese stalls at the International Textile Technology and Machinery Expo generated up to Rs 500 crore business enquiries. Sources estimate that about 40 per cent of the business enquiries at the expo was generated by the 'China Pavilion', a collection of more than 50 stalls from China.

Already, the region is experiencing an inflow of knitting, spiring and weaving machineries from Germany, China, Korea, United States and a number of European nations.

Going by the current surge in the export of German machinery to India, the VDMA, the trade body of the German Textile Machinery Association, expects that the export to India would touch 200 million euros.

India imported machinery worth 140 million euros from Germany in 2004, an increase by 30 per cent compared to the previous year. It again increased by 84 per cent during 2005.

A spokesperson of the Southern India Mills' Association (SIMA) told Business Standard that as of now, 40 to 50 textile mills from Coimbatore have evinced keen interest in placing orders with Chinese machinery manufacturers. "More than five mills have placed bulk orders for their projects, and 15 mills are mulling importing machineries," he added.

After China and Germany, it is the turn of European countries and the United States to make inroads into the Indian textile industry with their second-hand spinning and weaving machines that are offered at a discounted price to the Indian buyers.

Many units in the region have evinced interest in importing second-hand ring spinning frames offered by textile units in Europe which were closed down after the abolition of textile quota. Here also, China tops the figures. To cater to the needs of the mills in the region, China's state owned China Texmatech Company Limited (CTMTC), the textile marketing arm of the Hengtian group, officially opened its liaison and post sales service centre in the city on March 1, 2006.

Taking a cue from CTMTC, two other Chinese players- Pacific Mechatronics and Shanghai TT Machinery, are also scouting for people and places to set up their subsidiaries in Coimbatore.

Speaking to Business Standard, an official from the Shanghai TT Machinery, an exporter of auto coner and winding machineries to Germany and Italy, said that the company had received enquiries from the mills in the region and the company would set up its office and recruit technicians and agents in India. However, he declined to disclose the prospective investment and the timeline for the projects.

Available statistics point out that since 2000, the export of Chinese textile machinery to India is increasing every year. In 2005, the export to India reached $ 1.6 hundred million, which was around 18 per cent of the total export of the Chinese machinery. CTMTC hopes to export about 5 million spindles to India during the year 2006. The manufacturing plant has a production capacity of 5 lakh spindles a month. It can meet the shortest delivery period of three months.

CTMTC's plants currently sells 85 per cent of the machinery produced within China and the remaining is exported. Now, the company has decided to increase its export production to 30 per cent, sources said.

"Most of the textile units in the region are scaling up their production capacities in spinning, weaving and processing but their plans are strapped by the delay in the supply of machinery from indigenous manufacturers," a source in SIMA said.