While regions like Tirupur and Bhiwandi may have been strongholds in spinning and apparels, textile mills are increasingly troubled by frequent power cuts and water scarcity. Add to that, with labour wages in textile industry, especially in the spinning vertical, reaching as high as Rs 200 per day, many eyes are now turning towards Gujarat.
According to government sources, textile mills and traders alike from these regions are now moving towards Gujarat to set up spinning units with capacity of anywhere between four lakh spindles and five lakh spindles in next 4-5 years for an investment of Rs 900-1,000 crore. Moreover, identifying the trend much earlier, Gujarat government has also begun emphasising on fresh investments in the spinning and apparel verticals.
"For decades regions like Tirupur, Bhiwandi and Coimbatore have been at the helm of the spinning and apparel verticals in spite of frequent power cuts and water shortage. But a recent rise in labour costs have added to their woes. As a result, most of the fresh investments in spinning verticals have begun moving towards Gujarat. Moreover, the state government is also encouraging investment queries in the spinning and apparel verticals," says a senior government official.
As against a power cost of Rs 5 per unit offered by Gujarat, other regions offer about Rs 4 per unit. "But almost seven hours we have to depend on diesel due to frequent power cuts and thus the power cost goes up to Rs 12 per unit at times," says S Sakthivel, executive secretary of Tirupur Exporters Association (TEA).
However, according to Sakthivel, it is textile mills based out of other parts of the country but have operations in regions like Coimbatore, Tirupur and Bhiwandi that are moving to Gujarat. "The trend as of now is only being seen among textile companies that have originated from Bhiwandi or Tirupur. As for mills that are based completely out of these regions, they are unable to move to other regions like Gujarat due to their conservative nature," adds Sakthivel.
On its part, Gujarat is keen to see at least one lakh spindles being develop every year. "On an average in Gujarat it will take around Rs 20-25 crore of investment for setting up a spinning unit of minimum 12,000 spindles. The government aims at ensuring setting up of at least one lakh spindles per annum for the next 4-5 years to strengthen this vertical in the whole textile value chain. In order to attract players, the government is emphasising on ready availability of cotton, continual power supply and stable wage rates. Gujarat government is also encouraging existing textile companies in the state to set up or expand captive spinning units," the senior government official adds.
Ahmedabad-based denim companies like Jindal Worldwide and Nandan Exim have already chalked out expansion plans and are adding more spinning units at their existing facilities.
"Gujarat has been weak in the spinning vertical but the advantage of sourcing yarn from outside is that we can reject a particular order and opt for another if our quality is not match. Yet, gradually textile companies in Gujarat are setting up spinning units to an extent of 20-25 per cent of their weaving capacity which will later be ramped up," says an official source in Jindal Worldwide, which is planning developing spinning unit of 25 million metres per annum at an investment of Rs 15-20 crore.
