Indian Spinners to continue production cut

Company Performance

Indian Spinners to continue production cut

Indian Cotton spinning mills across the country to continue the production cut by one third as initiated on May 24. Confederation of Indian Textile Industry (CITI), said the one-day closure of textile mills on May 23 and one-third production cut under the auspices of CITI and several associations of mills had resulted in a loss of Rs. 600 crore (around US$ 134 million). Citing the reasons for the production cut and one day plant shutdown, CITI Chairman Jaipuria said the shutdown was to draw the attention of the government to the serious problems of the ailing cotton textile sector and also to the difficulty in reducing stocks of cotton yarn.

Jaipuria said draw attention to the unsold stocks of cotton yarn manufactured from high-cost cotton which has been leading to cash losses for most spinning mills as yarn prices dropped. After a review of the situation on 30^th May 2011, spinning mills decided on a voluntary production cut ranging from 33 to 40 per cent, depending on the stock position in the mills. Jaipuria further said, the crisis in the industry would be over only if problems of the entire value chain were addressed urgently.