Banks told to recast Rs 35,000 crore debt for textile sector

NEW DELHI: The government on Tuesday asked banks to restructure loans worth Rs 35,000 crore for the textile sector, bringing relief to the sector, which is reeling under the impact of volatile yarn prices and slowdown in major markets. Banks have an exposure of Rs 1.56 lakh crore to the sector, which means just under a quarter of the loans will be restructured in one of the biggest loan recast programmes. 

The long-pending demand of the industry will benefit around 2,000 cotton textiles mills, a majority of which are in Tamil Nadu, and the man-made fibre segment in Gujarat, where assembly elections are due later this year. Of the overall package, nearly Rs 27,000 crore is expected to be pocketed by the cotton mills, while Rs 3,600 crore will flow to the man-made segment. Before assembly elections in Uttar Pradesh, the government had announced a package for weavers, which included softer loan terms. 

The latest lifeline to the largest employer in the manufacturing sector comes at a time when industrial growth and exports have slowed and there is an all-round demand to boost economic activity. A healthier financial position of Indian textile companies also augurs well for their export competitiveness. The package, finalized after a meeting between finance minister Pranab Mukherjee and commerce, industry and textiles minister Anand Sharma, will include a two-year interest moratorium and conversion of eroded working capital into longer-term loans with three to five year term. 


Soon, aggressive textile policy for upliftment of cotton industry

SURAT: Chief minister Narendra Modiannounced that the state government is in the process of formulating an aggressive textile policy for the upliftment of the cotton textile industry and taking the ‘made in Gujarat’ brand to the foreign shores. 

Modi said the government is working on five ‘F’- farm, fibre, fabric, fashion and foreign. 

“We are the leading cotton producing state in the country. Now we want to transform the state’s cotton industry as a leader in yarn manufacturing, cloth manufacturing, readymade garment manufacturing and later we will reach out to the world market with our products,” he said. 

“Why there is a need to export our cotton? All the cotton produced will pass from different stages of manufacturing in the state itself and then we will capture the world market. We want the world buyers to flock to Gujarat in search of readymade garments,” he added. 

Interestingly, Modi himself had hit out at the UPA government for banning cotton exports recently. 

Modi’s announcement has not gone down well with the textile entrepreneurs, weavers and industrialists in the city. Reason: Surat is the country’s biggest man-made fibre industry and it is facing a tough competition from the cotton yarn and cotton garments in the domestic as well as international markets. 

“The aggressive policy for textile as announced by the CM is only for the cotton sector. Surat is a man-made fibre hub and there is nothing for us to welcome the announcement,” said a leading textile entrepreneur 

He added, “The formulation of the new textile policy for cotton by the state government would put the city’s man-made fibre hub at risk. Many industrialists, weavers and entrepreneurs may turn to cotton-based textile production instead of using polyester yarn.”

Thai delegation explores business opportunities in Gujarat

VADODARA: A trade delegation of Thai representatives led by ambassador Pisan Manawapat visited the city on Tuesday to gauge industrial and infrastructure development in and around it.

Manawapat with around half-a-dozen other officials from Thailand met officials at Vadodara Municipal Corporation (VMC), Vadodara Chamber of Commerce and Industry (Vand are scheduled to visit key industrial units around the city on Wednesday.

VMC commissioner Ashwini Kumar said the delegation was on a visit to familiarize itself with the business environment in the state. “They discussed urban and industrial development in and around Vadodara extensively with us. They were keen to know how the city would develop in the coming years and what opportunities would emerge here,” he added.

Manawapat said the delegation was there to see the potential for business in the state. “So far, business houses from Thailand have had a good presence in south India. We will introduce Gujarat as a destination for business to them,” he said. The ambassador said that he had also been briefed regarding the Delhi-Mumbai Industrial Corridor. “We will look into the opportunities available on this front too,” he said. He added that prominent Thai construction companies had presence in India and were involved in infrastructure projects.

At VCCI, the delegation met industrialists across a broad spectrum of industrial sectors. Even representatives of education institutes and NGOs were present. “Thai prime minister Yingluck Shinawatra has announced a Free Trade Agreement with India. Once this is signed, we expect the trade between the two nations to multiply and bilateral trade may exceed 10 billion USD,” Nilesh Shukla, senior vice-president, VCCI, said.

Former VCCI president Jatin Bhatt said the Thai delegation was particularly impressed by the power situation in the state. “They are eyeing sectors like power, textiles, automobiles and electronics,” he added.

17 textile units stop operations in SIPCOT

Erode,May 18 (PTI) Seventeen textile dyeing units in SIPCOT Industrial Growth Centre at Perundurai stopped operations after the 90-day time limit granted by the Pollution Control Board lapsed on Wednesday, PCB officials said today. An official said 18 months ago, PCB had ordered the closure of the 17 textile units for “flouting” PCB rules. They approached the court and on its direction, they approached the PCB who granted 90 days time to enable them fulfil pollution control norms. Claiming that they have fulfilled PCB norms, Textile unit sources said they will again approach PCB seeking a permanent license to start operations. Meanwhile, it was stated that the PCB will monitor the pollution level periodically and criminal action would be taken for any violations like discharge of untreated effluents into water bodies.

New code of conduct to make sustainable change in textile

The UN Global Compact launches its first sector-specific initiative, a code of conduct for the entire fashion industry.

The launch will take place at the Danish Fashion Summit, and in the lead-up to this event Novozymes has been collaborating with the Danish Fashion Institute to provide ideas for sustainable textile production. The input will be passed on for use in the UN Global Compact Code of Conduct.

“Fashion is one of the most polluting industries in the world. The fashion industry has a need to show the world that it can change into a more sustainable path, and to do so it’s crucial that we build partnerships and exchange ideas across the industry,” says Eva Kruse, CEO of Danish Fashion Institute.

At the Fashion Summit, a whole catalog of ideas for a more sustainable textile industry will be delivered to the UN by the Danish Fashion Institute.

“We can’t force companies into sustainability, but we can inspire and motivate them through existing solutions and new technologies – and the input we have had from Novozymes has given our input for sustainability in the textile industry a big boost,” Eva Kruse continues.

Sustainable savings
The textile industry has an option to take a sustainable path. 

Every year, 9 million tons of knitwear is produced. Saving between 1 and 1.3 tons of CO2 emissions for each ton of knitwear produced, enzymes can save 0.3 kg of CO2 per T-shirt and 9 million tons of CO2 annually. That is equivalent to removing 4 million cars from the road.

Production of our T-shirts also requires huge amounts of water. Enzymes are naturally efficient processing aids that can accelerate processes and work in synergy to shorten production processes and handle more steps at once. Through this ability, enzymes have been proven to save 70,000 liters of water per ton of knitted fabric produced in a textile mill. That is about 20 liters per T-shirt.

Sustainable input
To provide ideas and input for the UN Global Compact Code of Conduct, Novozymes has focused on several areas. One of these concerns clean technologies that can reduce energy and water consumption as well as reducing waste in the textile industry. Another area of input focuses on textiles produced using environmentally friendly energy sources.

“Our main focus has been to provide input and inspiration for how the textile industry can move away from processes with high water and energy consumption. With biotech a textile mile could save water and energy. The technology exists today, but we need accelerate change,” says Pernille Lind Olsen, Marketing Manager at Novozymes.

“At Novozymes we hope that the UN Global Compact Code of Conduct will help the industry to move toward more sustainable production of textiles,” says Pernille Lind Olsen. “The industry needs to initiate sustainable change itself. The world really needs it, customers will demand it, and politicians will eventually decide on it.”

Made in Italy textile machinery workshops in India

ACIMIT, the Association of Italian Textile Machinery Manufacturers, is organizing two important workshops in Mumbai and Ichalkaranji (India). Italy’s response to the strong demand for technology by the local textile industry.

India is the world’s second largest market in terms of value for textile machinery imports (amounting to 1.11 billion euros). Italian technology is especially in demand. In fact, 133 million euros worth of Italian textile machinery was sold to India in 2011, a 19% increase compared to the previous year.

“Our companies have been observing developments in India for some time now,” states Sandro Salmoiraghi, President of ACIMIT, “Business opportunities have multiplied, particularly in recent years, owing in part to the incentives set up by the Indian authorities to promote the modernization of local industry.”

To meet this growing demand for Made in Italy textile machinery, ACIMIT is organizing two important events with Indian textile manufacturers. Mumbai and Ichalkaranji will play host to two workshops to be held on May 8 and 10, at which various Italian machinery manufacturers will be presenting their latest technology proposals.

The following Italian machinery manufacturers will be taking part: Canalair, Cs Automazione, Fimat, Flainox, Itema, Jaeggli Meccanotessile, Ptmt, Smit, Testa. The workshops, organized by ACIMIT, are part of the “Machines Italia in India” program financed by the Ministry for Economic Development, which has entrusted the organization to the Federmacchine group (the Federation of Italian Manufacturers of Capital Goods).

“Machines Italia in India” is an initiative aimed at supporting the internationalization activities of businesses in the sector, in an area that is currently experiencing some of the most intense economic development anywhere in the globe.


Highlights in Union Budget 2012-13 for textile industry

A. For Modernisation of Mill
1. Financial package of Rs 3,884 crore for waiver of loans for handloom weavers and their cooperative societies.
2. Textile mills planning modernisation will benefit from customs duty exemption (five per cent earlier) on automatic shuttleless looms. The import duty on second hand automatic looms will also come down to 9.33% from the present 14.33%.

B. Branded Garment
1. The excise duty on branded garment has been increased from 10% to 12%, the abatement of 55% from the maximum retail price (MRP) has also been raised to 70%. This would bring down the incidence of duty as a percentage of MRP from 4.5% to 3.6%.

C. Custom Duty
1. Customs duty exemption of shuttleless looms from 5% to 0%.
2. Full exemption from basic duty is being accorded to automatic silk reeling and processing machinery as well as its parts.
3. Exemptions and the existing concessional rate of basic customs duty of 5% only to new textile machinery. Also, second-hand machinery would now attract basic duty of 7.5%.
4. The basic customs duty on wool waste and wool tops would be reduced to 5% from 15% and wool tops from 15% to 5%.
5. Basic Customs duty on Aramid thread/ Yarn/ fabric for manufacture of Bullet proof helmets for Defence and Police personnel is being reduced from 10% to Nil with Nil CVD and Nil SAD.
6. Basic customs duty on Titanium dioxide classified under CTH 2823 00 10 is being reduced from 10% to 7.5%.
7. Basic customs duty on Sintered natural uranium dioxide/ Sintered uranium dioxide pellets (U-235) classified under CTH 2844 20 00 for use in the production of nuclear power is being reduced from 7.5% to Nil.
8. Basic customs duty on Super Absorbent Polymer (SAP) classified under 3906 90 90 imported for use in the manufacture of Adult Diapers is being reduced from 7.5% to 5% alongwith Nil SAD on actual user basis.
9. The benefit of existing exemption from Customs duty on Road Construction equipment is being extended to projects awarded by Metropolitan Development Authority also.
10. Full exemption from basic customs duty is being provided to shuttle less looms, parts/components of shuttle less looms by actual users for manufacture, specified silk machinery viz. Automatic reeling silk reeling and processing machinery and their accessories including cocoon assorting machines, cocoon peeling machines, vacuum permeation machine, cocoon cooking machine, reeled silk humidifier, bale press and raw silk testing equipment.[S. No. 406 of notification No. 12/2012-Customs dated 17.03.2012 refers]. The existing concessional duty rate extended to specified textile machinery is being restricted only to new textile machinery. (The concessional rate is 5%. For used machines, the duty will be 7.5%).

D. Excise Duty & Service Tax
1. Standard rate of excise duty raised from 10% to 12%.
2. Service tax rates raised from 10% to 12%.

E. The government also plans to set up a powerloom mega cluster in Ichalkaranji, Maharashtra, with a budget allocation of Rs 70 crore. Ichalkaranji is the only place in India which produces yarn of all counts.

F. Setting up of two more mega clusters, one to cover Prakasam and Guntur districts in Andhra Pradesh and other for Godda and neighboring districts in Jharkhand in addition to 4 mega handloom clusters already operationalised. He also proposed setting up of three Weavers Service Centres, one each in Mizoram, Nagaland and Jharkhand. The Minister proposed a Rs 500 crore pilot scheme in twelfth plan for promotion and application of Geo-textiles in the North East. A powerloom Mega Cluster will be set up in Ichalkaranji in Maharashtra.

G. Basic customs duty on Hydrophilic Nonwoven, Hydrophobic Nonwoven ( CTH 56031100) imported for use in the manufacture of Adult Diapers is being reduced from 10% to 5%, With 5% CVD and Nil SAD on actual user basis.

H. Project import status is being granted for Green Houses set up for protected cultivation of Horticulture and Floriculture produce – will hurt domestic Agro Textile companies.

I. JV Defence Production will help support the modernisation of textiles used in Defence Production.

J. NHAI and Infrastructure Growth focus in the budget– will help geotextiles usage.

K. SIDBI funding for SME will help in the entrepreneur development programme in Technical Textile.

L. 200% weightage reduction in R and D in house activity.

M. Peak rate of Cenvat has been increased from 10% to 12%.

Indirect Benefits

1. One of the 5 core objectives of the budget is GROWTH IN DOMESTIC DEMAND- offers opportunities for Technical textile sector to push for non budget measures which can help domestic demand.
2. The strong emphasis on Agro growth, Horticulture, and improvement on Food yield offers opportunity for increase usage of Agro textiles.
3. National Skill development mission increase in budget can help the sector to fund its skill shortage issues too.
4. Rural infra development fund – Rs 20,000 Cr and more 8,000 kms of road network to be done.. . Can be used by geotextiles companies.
5. National urban health mission to set up – can be used to increase the usage of Medical Textiles.
6. Govt to fund Rs 5,000 Crores as India Opportunity Venture fund – to help SME companies In Technical Textiles for equity.