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Thanks to frequent power cuts eating into their businesses, the Tamil Nadu and Andhra Pradesh based yarn makers have found a helping hand in Gujarat Chamber of Commerce and Industry (GCCI) which is assisting them to build shift to the power abundant state of Gujarat. The industry body is helping the South India based yarn makers to scout affordable land to build a yarn cluster in Gujarat.
So attractive has been the seven per cent interest subsidy and subsidised power tariff under the Gujarat textile policy that several yarn makers from south have submitted proposals to the state government for setting up a spinning unit in Gujarat.
"The textile policy is not only offering a seven per cent interest subsidy but also power tariff is as low as Re 1 for the first five years. In terms of power costs alone, setting up a spinning unit will be Rs 6-8 cheaper than in the southern states. Hence, we are thinking of shifting our plants to Gujarat," said Sudhakar, owner of Sudha Agro. The Andhra Pradesh based yarn maker is looking at a capacity of 15,000 spindles at an investment of Rs 45 crore.
Similarly, Satya Spintex, again based out of Andhra Pradesh, is also looking at setting up a spinning unit of a capacity of 16,000 spindles.
"Frequent power cuts and high costs have been eating into our margins. The textile policy released by Gujarat government offers huge benefits for players like us. We are, in fact, being assisted by the micro, small and medium enterprises (MSME) committee of GCCI in our plans to shift our base to Gujarat," said Ravidhar of Satya Spintex.
Such has been the response from among yarn makers from south India that the Gujarat government has already received proposals for setting up spinning units worth capacity of over 5 million spindles.
"The response has been tremendous thanks to the favourable conditions in the textile policy. We have already received proposals from several yarn makers for a cumulative capacity of over 5 million spindles whereas our target under the policy was only 2.5 million spindles since our current capacity is around 1.2 million spindles," said a senior state government official in Government of Gujarat.
The state government is also assisting the interested yarn makers in availing funding for the project.
According to industry sources, investments worth over Rs 4500-5000 crore could be seen in the next one or two years in the spinning segment alone.
