Textile boom rubs off on machinery companies

A strong revival in the textiles industry during the past few quarters has spilled over to the textile machinery space, especially those catering to the spinning and weaving segments.

Textile machinery production in India rose 52% during October 2009-September 2010 over the same period of the previous year, according to data available with the Textile Manufacturers Association (India).

Major revival was seen in the spinning and weaving segments with production of machinery in both the segments including allied machines rising 72% during October 2009-September 2010.

The spinning segment had the major share at 66.20% of the total textile machinery produced in India during the period.

Post recession, a vibrant domestic economy has led to robust growth in textiles demand and in spite of increase in the prices of raw materials like cotton and polyester, most players have been able to pass on the hike to end-customers.

The central government’s Technology Upgradation Fund (TUF) scheme has also helped the textiles manufacturing industry. In order to gain from this scheme, a number of textile companies have opted for upgradation.

T Parabrahman, managing director, Kirloskar Toyoda Textile Machinery Pvt Ltd, said there has been a huge shift to automated upgradation with most of his clients moving to 98% automation this year compared to only 50% last year.

According to the Textile Manufacturers Association (India) data, around Rs282 crore have been disbursed under this scheme for fiscal 2011 up to June 2010.

Parabrahman said the end of recession, a good cotton crop, a very good domestic demand and shortage of yarn and cotton globally has worked well for the industry, coupled with the fact that Indians have an edge in the spinning technology across the world.

However, most textile machinery producers are believed to have faced initial glitches before cashing in on this growth in demand.

“Most textile machinery producers failed to capitalise on this growth in demand due to an erractic supply chain. Most of the ancillary producers which are part of this long supply chain had shifted focus to other industries such as automobiles. This is was to derisk themselves from depending on one a sector—- textiles— which was in a lull period then. The machinery producers took some time to stabilise this supply chain to cater to the growing demand,” said Parabrahman. He is positive this quarter would surely be a good one.