Weaving industry plumps for imported second-hand machines

The model-specific import of second-hand weaving machines is catching on in the weaving industry in the region, resulting in an increase in the number of shuttleless looms, according to industry sources.

The spinning industry here is already depending more on imported textile machineries.

The Palladam Hi-Tech Weaving Park (PHWP), first of its kind in the country to be set up at an investment of Rs 250 crore under the Scheme for Integrated Textile Parks (SITPs), is planning to use more number of imported second-hand weaving machinery.

The park, which is to become operational by September 2006, will have 105 sheds with 700-odd looms. "Of the total 700-odd looms, 500 would be new looms. The remaining 200-odd looms would be imported second-hand ones," M Senthilkumar, director, PHWP, told Business Standard.

He said that the second-hand shuttleless looms had a higher productivity and are easy to operate, besides requiring less maintenance.

The loom import, which is eligible for subsidies under the Technology Upgradation Fund Scheme (TUFS), would cover only two vintage models of the used shuttleless looms - TW-11 and the PU looms - from the stable of Sulzer Textile Limited, a European textile machinery major.

However, the entrepreneurs seem to suffer a drawback in this respect. "The benchmark prices for the second-hand imported shuttleless looms have been fixed at Rs 11.20 lakh, whereas the market price of the imported second-hand Suzler loom alone works out to be around Rs 15 lakh. Instead of getting a subsidy of Rs 3 lakh, the entrepreneur gets only Rs 2.24 lakh. As a result, the effective subsidy for imported looms has come down to 14.9 per cent from the earlier 20 per cent," according to sources.

Moreover, the imposition of four per cent Special Additional Duty (SAD) on the import of shuttleless looms has resulted in an increase in the import duty to 9.39 per cent.

"An airjet loom costs approximately Rs 23 lakh. It has been proposed to install four looms at the PHWP at a total cost of Rs 92 lakh. The small entrepreneurs are burdened with an additional cost of Rs 4 lakh, besides losing the capital subsidy of 20 per cent as the cost of the plant and machinery exceeds Rs 1 crore," Senthilkumar added.

The weaving industry, particularly the decentralised powerloom sector, has been pleading for relaxing the norms for the used weaving machines in terms of bankability under the TUFS.

To facilitate more investments in the weaving sector, TUFS should be extended to the used looms also, industry sources said.