Surat: Weaving & processing units struggling with raw material shortages

21 April 2022, Mumbai:

Weaving and processing units in Surat are struggling with raw material shortages and their rising prices.

Prices of coal and lignite in the city have increased by over 100 percent, electricity bills have surged by about 10-15 percent while labor charges are surging by 12 percent.

Ashok Badani, Owner of a processing unit says, the prices of polyester yarn in the city have jumped by over 30 percent in the last six months.

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This is making it difficult for weavers to buy yarn in large quantities, he adds.

The steep rise in inputs costs is also disrupting production activities with most units running one shift 12-hour shift a day, adds Lalit Pipalya, Weaver.

Before the pandemic, weavers processed nearly 40 million meters of fabric per day. But now, the process is only about 30 million meters a day.

This threatens a 65 percent decline in cluster turnover this year.

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Weavers’ operating margins are also being squeezed as they do not pass all additional costs to consumers.

However, this has led to a 50 percent decline in their own profit margins.

Over 75 percent of the 50,000 plus weaving units and more than 400 textile processing houses in Surat are relatively small units or MSMEs.

Jitendra Vakharia, President, of the South Gujarat Textile Processors Association (SGTPA), says, their small capacities make it harder for them to absorb the sudden hike in raw materials and other costs.

The Surat textile cluster provides direct employment to over two million people in the city.