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| Century cuts denim production by half in MP unit |
| BS Reporter / Mumbai Feb 02, 2009, 15:32 IST |
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Uncertainty in the textiles exports market coupled with poor demand from the domestic market as well has forced Century Textiles and Industries to cut its denim cloth production by half at its Madhya Pradesh facility.
The company has not stated for how long the unit will produce on half capacity except saying that it is for the time being.
The factory - Century Denim - which is located in Khargone district in the south western part of Madhya Pradesh has a capacity of 20 million metres per annum. The cut in production is effective from 1 February.
R K Dalmia, president, Century Textiles and Industries, told Business Standard, "Our denim exports were more hit than the domestic market and it was not economical to run the unit its full capacity."
Century Textiles, part of the B K Birla group, has been continuously coming up with dismal quarterly numbers with its textiles business denting the profitability. The quarter ended December saw the company's net profit plunge by 68 per cent (y-o-y). The textiles segment alone posted a net loss of Rs 24 crore in the quarter.
"Input costs were going up and our realisation were down in denim business. As soon as the market bounces back, we would try to restore the production," added Dalmia.
When asked how long the "temporary" cutting down production will continue, Dalmia said that "it is hard to say". He added that world wide the demand for denim has slowed down and several denim manufacturers have cut short their production. "We hope that with cuts, prices would improve," Dalmia said.
Arvind, a dominant player in denim segment, too has reported losses of Rs 33 crore in the December quarter. Other companies in the textile sector, including Aditya Birla Nuvo, Grasim, Bombay Dyeing, Alok Industries, S Kumars, Indo Rama Synthetics either reported losses or dip in their net profits for the December quarter.
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