The Hindu Business Line : Textile mills to outsource from powerloom units

THE disaggregated Indian textile sector is moving towards consolidation of core competences. A beginning is being made with 11 of the bigger composite mills planning to outsource their weaving requirements to 15 independent weavers in the powerloom sector.

The two sectors — powerloom units and mills — have traditionally been competing with each other over the last several years. The move to join forces, sponsored by the Ministry of Textiles, is aimed at combining the cost efficiency of the independent weavers with the processing capabilities and marketing muscle of the larger composite mills, industry players involved in the exercise said. The efforts towards the consolidation of mills and powerloom units have got a big push with the newly-formed Confederation of Indian Textile Industry (CITI) taking on board powerloom players, along with composite mill owners.

As a first step towards the integration of efforts, the Powerloom Development and Export Promotion Council has joined CITI, which has earlier been dominated by the composite mill sector. Subsequently, a list of composite mills and independent weavers was drawn up and both agreed to collaborate to bring down costs and improve efficiencies.

A meeting between representatives from 11 mills and 15 powerloom units is expected in the Textiles Ministry shortly, following which commercial negotiations between the two sides are expected to commence, an official said. More such instances of cooperation between players from both sides are expected to take place in the future, the official added.

The fragmented handloom and powerloom sectors undertake nearly 95 per cent of the weaving in the country. The powerloom sector has faced competition from the mills that have taken advantage of the low cost of labour, and tax and fiscal benefits. In fact, the lopsided duty structure had led to a decline in the share of the composite mill sector in weaving and a fall in the utilisation levels of mills over the years, according to Government data.

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