Spinning: Temporary setback may go
Spinning has been good in India, but looking at the trend unfolding in the last six months, it needs a relook. One is the Technology Upgradation Fund (TUF) which has been temporarily stopped. Secondly, the yarn export to China has virtually come to a standstill.
– Laxmikant S Rathi, VP, Textile Engineering ? Spinning, A.T.E. Enterprises Pvt Ltd
Spinning has been good in India, but looking at the trend unfolding in the last six months, it needs a relook. One is the Technology Upgradation Fund (TUF) which has been temporarily stopped. Secondly, the yarn export to China has virtually come to a standstill. In the last two years, we have been exporting 20-30 per cent of our capacity, and now with this stoppage there is a pile-up. Besides, the industry has added about 2.5 to 3 million spindles every year. So with yarn oversupply in the domestic market and the additional capacity, there is mounting pressure on the price front. With this situation, the bankers are getting more stringent. Some big companies have topped in the NPA list. With this situation, the bankers, we hear, are insisting on 100 per cent mortgage. So, in 2016, there will be a little bit of slowdown. No doubt about that in spinning segment. 2015 was a fantastic year for A.T.E. and the industry in general. Existing orders are being processed and executed, but what may worry is the slowdown in new orders, especially in the first half of the 2016.
TeraSpin from A.T.E. has been doing very well in the market. One customer from Bangladesh has placed an order for Rs 50 million and this is a single order of very high amount from the replacement market. There is good scope from Vietnam and so export orders are very promising and have lent new hopes to spinning accessories and parts market. Investment in spinning in North is virtually nil at present. But Gujarat, Maharashtra and parts of Madhya Pradesh are showing promises. There is a typical cycle of mood swings, but people are confident that investment sentiments will return in the future. It was heartening to see all senior management people including mill owners visiting ITMA and showing genuine interest in emerging technologies and products. Innovations in spinning machinery and parts infused a lot of positive signs. The Government is making smart moves and though interest subsidy may go, some sort of capital subsidy seems to be under consideration. The Government will not let down the industry, we all hope.