Surat's grey fabric output hit by 30%

Industry sales turnover halves, courtesy sluggish demand

Surat-based weaving units processors have been forced to cut down production of synthetic grey fabric by 20-30 per cent in wake of low demand coupled with rising prices of raw materials.

The impact of downturn on the industry can be gauged from it's sales turnover which has reduced to almost half recently.

The industry in Surat, which weaves about 30-40 million metres of grey cloth per day which are then sent to processing houses, has reduced the production by anywhere between 10 million metres and 15 million metres per day.

According to Devkishan Manghani, general secretary of Federation of Surat Textile Traders Association (FOSTTA), "Around 40,000 small and big textile merchants generate volume of Rs 110 crore per day, which has come down to Rs 50 to Rs 60 crore a day due to sluggish demand. Grey cloth manufacturers are also feeling the pinch of rising raw material (texturised yarn) cost."

There are an estimated eight lakh power looms in and around Surat. "Several of these looms have shut down night shifts while others have kept their units closed for a day or two. These weaving houses have not been able to bear the burden of price hike in raw materials. Add to that, the demand has also hit a low," said Mahendra Kajiwal, former president of FOSTTA.

What's more, the inventories have also been piling up in their godowns. According to Kajiwal, while a month ago the inventory in terms of finished goods were 15,000 units, it is now over 22,000. Through sales of grey fabric to processing houses, weaving units earn a revenue of Rs 15-20 per metres. With sales dipping by 30 per cent, the units are losing revenues worth Rs 15-20 crore.

The industry’s turnover from synthetic ready goods amounts to over Rs 30,000 crore per annum.