The Hindu Business Line : Production of high quality yarn a drain on profits, says study

IS production of yarn of higher quality a drain on the profits of the textile mills? This is what a recent study on cost-strength-product (CSP) undertaken by the Coimbatore-based South India Textile Research Association (SITRA) seems to suggest.

The SITRA study on `Costs, operational performance and yarn quality' covers the data of about 200 textile mills. The study has shown that the average CSP levels maintained by the mills is up by 500 CSP in the 2100 to 2200 CSP for the 20s/30s/40s/60s count combed cotton yarns and some 2500 CSP for the yarns of 80s and 100s combed.

These average CSP levels are about 200-300 units higher than those that are needed to meet the requirements of most fabrics woven in the decentralised sector, particularly used in weaving on the plain looms, according to SITRA.

The SITRA report says that most of these superior yarns are supplied to the decentralised sector where mainly plain shuttle looms are installed and the question arises whether these loom really require the high quality of yarns supplied by the mills.

SITRA estimates that use of lower quality cotton yielding a yarn CSP of 200 or less offers good scope for cost savings and for a 30,000 spindle mill, the savings could be around Rs 3.8 crore in 20s count, Rs 2.3 crore for 30s and Rs 1.6 crore for 40s and about Rs one crore for 60s count per annum.

The study says that there has been a closer linear association between the cotton cost and yarn CSP with every reduction in 100 CSP of yarn leading to a saving of over Rs three in cotton cost per kg of yarn in all count ranges. Between mills, yarn selling price within a given count is found to differ by about 30 per cent affecting costs and profits to the extent of Rs 1,500-3,000 per spindle per year.

Whereas, yarn selling prices showed a low positive correlation with yarn CSP indicating that the intrinsic quality of yarns accounts only for about 16 per cent of the variation in yarn selling price.

The SITRA study has shown that the quality of the yarns produced by the spinning mills has recorded significant improvement in the last 25 years and the yarn quality.

Article E-Mail :: Comment :: Syndication

Stories in this Section
7% rise in indirect tax collections in April-August

Sharon invites Indian investment

2-day CME programme

Doctor does 25,000 heart surgeries

ONGC may share LPG, kerosene subsidy burden

AP power utilities adopt TIMS

Production of high quality yarn a drain on profits, says study

Will water take on colas?

No move to sell river water, says Kerala Minister

Dikshit defends dual water pipelines

AP groundwater potential study to be completed soon