Dyeing costs shoot up 30% as 700 Tirupur units shut shop

The Indian textile sector, which is reeling under rising raw material costs since the last eight months, is now facing a 20-30% increase in dyeing costs due to closure of dyeing units in Tirupur, Tamil Nadu.

Around 700 dyeing units have shut down in Tirupur, a major textile hub in the country, in the past two months following a Madras High Court order. The units were asked to shut down for environmental reasons. Tirupur is the main textile hub for dyeing activities in the knitwear segment and has a share of about $3 billion in India’s total $10 billion textile exports.

With the shutdown in Tirupur, garment manufacturers are now sending orders to other hubs including Mumbai, Ahmedabad, Ludhiana and Kolkata.

Inundated with sudden demand, these units outside Tirupur have also increased prices by Rs10-30 per kg.  Before the closure of Tirupur dyeing units, bleaching white was priced Rs70-80 per kg and dyeing black was in the range of Rs100-120.

“A lot of demand (for dyeing) has moved to units in North India, mainly National Capital Region and also to Mumbai to some extent. While these units have raised prices byRs25 per kg, delivery period has also increased. Earlier it was 10 to 12 days and now it is around 30 to 40 days,” said Manish Mandhana, joint managing director, Mandhana Industries, a garment manufacturer.

Mandhana has its own captive dyeing unit, of which 20% is utilised for third-party contracts. “Though we deal in woven, we have also seen an increase in demand,” he said. “Dyeing units outside Tirupur have increased prices by around Rs5 for bleaching white and Rs10 per kg for dyeing black per kg as there is an increase in demand,” said Sanjay Jain, joint managing director, TT Ltd. TT Ltd has a spinning unit in Tamil Nadu.
Jain said dyeing costs have thus increased by around 20% to 30% including transportation costs.

Premal Udani, chairman, Apparel Export Promotion Council (AEPC), the representative body for apparel exporters in India, said, “Dyeing costs have increased by around 20% and transportation costs 5%.” Udani also has a garment manufacturing unit near Tirupur. “Manufacturing units will consider shifting to other locations, if the situation continues for a few weeks more.”

Logistically, shifting base would not be a problem. However, finding a suitable land parcel around dyeing hubs in other parts of India would be a major issue, he said. “We hope the state governments look at this as an opportunity and offer incentives to set up units in their state. States such as Maharashtra could provide incentive like textile parks,” said Udani.