SIMA seeks power tariff on par with Andhra Pradesh

The Southern India Mills' Association (Sima) has urged the Tamil Nadu Electricity Board (TNEB) and the state government to bring down power tariff in Tamil Nadu on par with Andhra Pradesh and competing countries like China, Bangladesh, Thailand and Indonesia.

It has also sought uninterrupted power to sustain the competitiveness of the textile industry and safeguard the livelihood of several lakhs of people, particularly the below poverty line, in the state.

Various large units established by multinationals in Tamil Nadu (TN) are getting uninterrupted power through multiple feeders whereas small and medium enterprises like textile mills are faced with frequent power cuts.

The textile industry is incurring huge losses due to frequent power trippings and also finding it difficult to compete with Andhra and other countries due to higher power tariff, SV Arumugam, chairman, SIMA, said in a statement.

TN has 860 textile mills in the non-SSI category and 924 textile mills in the SSI category, accounting for about 45 per cent of the all India spinning capacity. The industry claims that it is operating with thin profit margins (between four and six per cent at 97 per cent utilisation).

AP has benchmarked to supply power to the HT (high-tension) industries at Rs 2.50 kwh in the long run.

It currently offers up to Re 1 per kwh incentive for the new investments made in the textile sector for a period of five years from the date of commercial production. This would enable a 50,000-spindlemill to save Rs 25 crore to Rs 30 crore on power in five years.

The cost of power for the textile industry in TN is higher by Rs 1.20 kwh for the existing units and Rs 1.95 per kwh for new investments compared with AP.

This totally erodes the profitability and competitiveness of the units, he said.

The cost of power in TN for a spinning mill used to be two per cent on turnover in the 60s and five per cent in the 80s. It is now over 14 per cent.

Baring the raw material, power constitutes over 35 per cent of the conversion cost for the spinning mills. Hence, power cost is a key factor for the survival of the textile mills.