Owing to increases in input costs of fuel and raw materials, textile processing units in southern Gujarat have decided to increase their processing charges by 10-15 per cent effective from August 1.
A decision in this regard has been taken by the South Gujarat Textile Processors Association (SGTPA). SGTPA is an association of textile processing units of South Gujarat - mainly in and around the Surat area. The hike in processing charges may be reflected in the price of cloth, resulting in an increase of almost Rs 1.5-2 per metre.
According to industry sources, prices of fuel, chemicals and colours have constantly gone up over the past year, but the processing industry has not hiked its processing charges for over one-and-a-half years now.
Due to higher input costs, more than 40 textile processing units have closed down, the industry players claimed.
"It is now mandatory for us to increase the processing charges for survival, especially for small units. During the past one year, the fuel cost of gas and coal has increased. Moreover, labour costs have also increased, which has put an additional burden on the units," said Jitendra Vakharia, president of the SGTPA. "New charges will also be applicable on our previous orders," he added.
According to the SGTPA, the price of commercial gas had gone up from Rs 11 per cubic meter to Rs 30 during the past two-and-a-half years, while in the last six months the power tariff has increased by Rs 1.50 per unit. Labour charges too have increased by 30-40 per cent in the past two years.
"Due to higher input costs, nearly 40 units have closed in the past one-and-a-half years. And if we do not increase job charges now, it will become difficult to survive," Vakharia said.
Textiles processors had been demanding a hike in the range of 8-12 per cent. However, in a decision taken by SGTPA last week, processing charges have been hiked in the range of 10-15 per cent.
There are around 400 processing units in this area, of which about 350 are active presently. The industry has an annual turnover of around Rs 10,000 crore and it provides employment to more than 150,000 people.