Textile industry slowdown hits machinery sector performance

TMMA chief expects marginal improvement in 2012-12

Export Excellence and R&D Awards presented

The 52nd annual general meeting of the Textile Machinery Manufacturers’ Association of India (TMMA), recently held in Mumbai, was well attended by industry leaders and Government officials. Mr. M.S. Unnikrishnan, Chairman, CII National Committee on Capital Goods and Engineering, and Managing Director, Thermax Ltd., was the chief guest and gave away the TMMA Export Excellence Award to machinery and components manufacturers.

Mr. Hari Shankar, TMMA Chairman, spoke about the present scenario in the textile engineering industry (TEI) and the way forward.

He said TEI has currently an estimated annual installed capacity of Rs. 9,100 crores per annum. The total provisional production of textile machinery, parts and accessories during 2011-2012 recorded a decrease of 14 per cent at Rs. 5,280 crores as against Rs. 6,150 crores achieved in the previous year.

The utilization of capacity sharply decreased to 58 per cent in 2011-12 as compared to 76 per cent in the preceding year. Demand recession faced by the industry had severely affected capacity utilization. However, capacity utilization is expected to improve during 2012-13.

According to Mr. Hari Shankar, import of textile machinery has risen from Rs. 5,000 crores during 2010-2011 to Rs. 7,500 crores (estimated) during 2011-2012. Exports during 2011-2012 were estimated at Rs. 800 crores as against Rs. 915 crores achieved during 2010-2011. The gloomy global market is responsible for lower exports.

The slowdown in the textile industry during the year had adversely affected the growth of TEI. There are some signs of improvement now. There could be marginal improvement during 2012-13, Mr. Hari Shankar added.

The other points highlighted by the TMMA Chairman in his speech were:

Understanding the current situation

The textile engineering industry had been suffering from the adverse impact of the Government policies since last three-four decades. These can be summarized as under:

Discouragement to the organised mill sector to expand its weaving capacity and encouragement to the decentralised powerloom sector to expand its capacity with obsolete technology.
Reservation of hosiery & garment for the SSI sector
No level playing field after liberalization of industrial and trade policies
No steps taken for the development of domestic manufacturing of high-tech textile machinery
Encouragement to the old used technology even for modernisation under the subsidy scheme

Of course, there have been some changes in the approach of the Government. For the first time there was a working group for the capital goods sector which has done an in-depth study and suggested suitable measures to be taken during the 12th Plan.

There has been clear understanding regarding the used/obsolete technology, and the Committee of Secretaries, the Planning Commission and NMCC are against its import even though there is stiff resistance from the user sectors and the Ministries concerned.

The most unfortunate part is that the user sectors are not yet ready to co-operate with the domestic manufacturers in the development of high-tech machinery in the country. India has the potential to become a manufacturing hub for textile machinery and its parts/components and accessories and help the domestic textile industry to remain competitive in the world market provided there is unstinted support from all the stake holders, including the Government.

Measures for growth orientation

TMMA has been representing to the Government for removal of fiscal anomalies. However, several anomalies still persist. Some of the support measures needed from the Government to promote this industry include changes in the fiscal policy, removal of hurdles facing the industry and assistance required for improving technology, production and exports.

Excise duty on all items of textile machinery at eight per cent, there should be no exemption.
Excise duty on all parts, components and accessories of the textile machinery should also be at eight per cent.
The floor level of customs duty on capital goods should be at a uniform rate of 7.5 per cent without any exemption.
The rate of duty on raw materials, parts, components and accessories should be less than that on complete machinery.
Import duty on dedicated parts, components and accessories of hi-tech machines which are not made in India so far should be nil.
Further, the CVD component should include all duties and taxes paid by domestic manufacturers for their product, i.e., it should include excise duty plus local taxes (VAT, CST, etc.) plus octroi.
Need to restrict reduction of import duty in respect of only high tech shuttleless looms such as airjet and waterjet looms having speed above 1400 metres per minute and shuttleless rapier loom above 700 metres per minute. Otherwise the reduced duty would help the Chinese manufacturers to market their product in India without any competition.
Duty on the imported second-hand machinery should be based on the price of the corresponding new machinery or should be 15 per cent, subject to a minimum of Rs. 1 lakh.
Scheme for modernisation, technology upgradation and productivity advancement of TEI.
Schemes to support with 100 per cent grant-in-aid for R&D in the industry.
Schemes to support setting up of at least two CFCs and one cluster park in Surat, Ahmedabad and Coimbatore and one CFC at Kolkata for manufacture of textile/jute machinery with 75 per cent financial aid for TEI as there is need for development and manufacture of hi-tech machinery in weaving, processing and technical textiles/jute sector.
Free import of textile machinery in second-hand condition should be discouraged.

Imported second-hand textile machinery should not be given subsidy under TUFS and its derivatives in the name of modernization. The Government should not be a party to the technological obsolescence as technology changes in every three-five years.
Ban on import of second-hand shuttleless looms with weft insertion rate less than 700 mtrs. per minute.

Ban on import of second-hand spinning machinery
Tax break for a period five years for any unit manufacturing hi-tech item of textile machinery with or without foreign collaboration.
Uniform treatment to the domestic suppliers of machinery to EPCG licence holders and 100 per cent EOU as both are deemed export.

The Planning Commission had set up different working groups under the chairmanship of the Secretaries in charge of different Ministries for the purpose of achieving goals and enhancing competitiveness of the Indian industries during the 12th Plan.

A sub-group on textile machinery was formed by the working group under the convenorship of Mr. Sanjay Jayavarthanavelu, Managing Director, Lakshmi Machine Works Ltd., and past Chairman of TMMA. The Association took the initiative to prepare the report of the sub-group on textile machinery based on the deliberations during the meetings, and the findings of the study made by the Gherzi Textil Organization, Zurich.

The sub-group submitted the requirement of Rs. 1,800 crores to the Government during the 12th Plan for modernisation of the textile engineering industry, R&D, common facility centres, cluster development, and business/market development and export.

Since last two-three years TMMA took the initiative along with CII to ban or restrict import of second-hand textile machinery as it is affecting the growth of the domestic industry. It is due to the continuous efforts of both TMMA and CII that the Government has taken the initiative to restrict import of second-hand machinery, particularly second-hand shuttleless looms. Some final decision in this regard is expected to be taken shortly.

The Development Council for Textile Machinery Industry was reconstituted under the chairmanship of the Secretary, Ministry of Heavy Industries & Public Enterprises. He and the other senior members of the Association were nominated on the Council as members. Representatives of various segments of textile and textile machinery industry, textile research associations, Ministry of Textiles, etc., were members of the Council.

A Joint Working Group (JWG) had been constituted by the Ministry of Heavy Industries & Public Enterprises under the chairmanship of the Joint Secretary, Department of Heavy Industry, to bring out a comprehensive action plan and policy initiative to strengthen the textile machinery manufacturing eco-system in the country. The third meeting of JWG was held under the chairmanship of Mr. Harbhajan Singh, Joint Secretary, Department of Heavy Industry on May 5, 2011.

Vision Paper 2020

To enable the Government to formulate specific schemes for the Sector, the Ministry of Heavy Industries & Public Enterprises had requested the Association to prepare a Strategy Paper as “Vision Document 2020 for the Textile Machinery Industry”. The document was to contain a comprehensive action plan for policy initiatives for systematic growth of TEI for the next five-10 years. With due consultation with the Ministry of Heavy Industries & Public Enterprises, TMMA awarded the contract to Gherzi Textil Organisation AG for conducting the study and preparation of the Vision Paper.

Accordingly, Gherzi submitted its report in August 2011, and the same was taken as the base paper for submitting the report of the Sub-Group on Textile Machinery Industry for the 12th Plan under the convenorship of Mr. Sanjay Jayavarthanavelu. However, the Department of Heavy Industry is yet to fulfill its promise of part-funding the study made by Gherzi at a cost of CHF 74,000.00 equivalent to Rs. 39,95,326. The entire expense was borne by TMMA.

The R&D Centre set up by TEI at IIT-B, Mumbai, needs special encouragement both from the Government and the industry to expand its activities. Continuous efforts are being made to obtain grants from the Government to make this centre more active.

TMMA Export & R&D Awards for 2011-12 presented

TMMA received 11 nominations for Export Excellence Awards. These nominations were evaluated by its Awards Committee for selection of winners.

The winner of the Apex Export Award was Lakshmi Machine Works Ltd., Coimbatore.

During 2011-2012, the company exported textile spinning machinery and parts to the tune of Rs. 327.11 crores, which formed 19 per cent of its total turnover. The countries to which exports were made were Bangladesh, Indonesia, China, Thailand, Vietnam, Turkey, Tanzania, Pakistan, Uzbekistan, etc.

Mr. C. Arunachalam, General Manager – Exports, received the Award on behalf of the company.

The Segment Export Award (Machinery) went to Kusters Calico Machinery Pvt. Ltd., Baroda.

During the year, Kusters exported textile processing machinery worth Rs. 33.04 crores that formed 66 per cent of the total turnover. The countries to which the products were exported were Argentina, Indonesia, Sri Lanka, turkey, Brazil, the US, etc.

Mr. Venkat Reddy, Managing Director, and Mr. Dipak N. Shah, Director of the company, jointly received the Award.

The Award for Parts & Accessories Sector went to InspirOn Engineering Pvt. Ltd., Ahmedabad, which exported textile machinery parts and accessories worth Rs. 17.75 crores that formed 56 per cent of the total turnover.

Germany, Italy, Netherland, Indonesia, Turkey, Taiwan, Spain, China, etc., were the importing countries.

The Award was received by Mr. Prakash Bhagwati, Chairman of the company.

The Award (for Testing & Monitoring Sector) was bagged by Premier Evolvics Pvt. Ltd., Coimbatore. During 2011-2012, the company exported testing & monitoring machinery worth Rs. 16.57 crores forming 46 per cent of the total turnover.

The importing countries were Brazil, China, Bangladesh, Indonesia, Turkey, Vietnam, Venezuela, Korea, etc.

Mr. C.R. Srinivasan, Head – Sales, was the Award recipient.

The Special Export Award (Spinning Machinery Sector) was won by Truetzschler India Pvt. Ltd., Ahmedabad.

which during the year exported spinning machinery to the tune of Rs. 50.86 crores that formed 12.39 per cent of the total turnover.

The importing countries were Germany, Bangladesh, Indonesia, China, Brazil, the US, etc.

The Award was presented to Mr. Shiladitya Joshi, Marketing Manager of the company.

The Special Export Award (Weaving Machinery Sector) went to Peass Industrial Engineers Pvt. Ltd., Navsari.

The company exported weaving machinery to the tune of Rs. 19.54 crores forming 35 per cent of the total turnover. Bangladesh, China, Indonesia, Nepal, Nigeria, Thailand, Vietnam, etc., were the importing countries.

Mr. P.V.K. Nambiar, General Manager of the company, received the Award.

The Award (Processing Machinery Sector) was bagged by Harish Enterprises Pvt. Ltd., Mumbai, which during the year exported processing machinery to the tune of Rs. 12.15 crores.

This formed 34 per cent of the total turnover.

The countries to which the machinery was exported were Bangladesh, Indonesia, Nigeria, Uzbekistan, Brazil, etc.

Mr. Kinnar Desai, Director – Sales, was the Award recipient.

The Award (Parts and Accessories Sector) was presented to Lakshmi Card Clothing Mfg. Co. Pvt. Ltd., Coimbatore, which exported during 2011-2012.

Card clothing and card room accessories worth Rs. 14.56 crores, forming 15 per cent of the total turnover.

Africa, Asia, Europe, Far East, the Middle East, South America and CIS were the regions covered.

Mr. R. Jagadeesan, Vice-President – Corporate Administration, received the Award on behalf of the company.

The Award (Jute Machinery Sector) went to Lagan Engineering Co. Ltd., Kolkata, which exported jute machinery worth Rs. 12.22 crores forming 81 per cent of the total turnover for 2011-12. Bangladesh was the importer of the machinery.

Mr. Anirudh Kajaria, Managing Director, received the Award on behalf of the company.

The Award (Small Scale Sector – Textile Machinery) went to Dhall Enterprises & Engineers Pvt. Ltd., Ahmedabad, which exported during 2011-2012 textile machinery worth Rs. 10.67 crores that formed 27 per cent of the total turnover. Bangladesh, Peru, Nigeria, Turkey, were the importing countries.

Mr. Pankaj Dhall, Director of the company, was the Award recipient.

Two nominations were received for R&D Awards of the Association. The jury selected both of them.

The first R&D Award winner was LMW for its development of “Lap Former LH 15”. The machine has various unique features as compared to the existing product. It is the perfect match for Comber LK64 & LK 69 to produce high quality laps. The machine with average delivery speed of upto 150 mpm helps increase production by 1.5 times with higher speed and reduced doff time of 45 per cent. The quality level is maintained with increase in speed. The machine offers 20 per cent capital cost reduction with 50 per cent increase in production.

Mr. V. Narendra, Senior Manager – Research & Development, received the Award.

The R&D (Innovation) Award winner was Meera Industries Pvt. Ltd., Surat, with its development of “Continuous Bulking and Heat-setting Machine”. The machine helps process quality carpet yarn and supply cone to the final cone in one process. Almost 16 ends can be processed at a time. The process takes two-five minutes and requires less manpower.