Page 144 - economic review

Industry and Labour116

3.104 Kerala State Co-operative Textile Federation (TEXFED) has seven Co-operative Spinning
Mills as members. Five of them are administered by the Government and two have elected boards.
Spinning Industry in Kerala is facing deep crisis due to high cost of inputs, competition from power
loom sector and loss of market share. The Mills in Co-operative Sector slipped into the huge
accumulated losses. From 2006 onwards the Government has placed great emphasis on the day
to day activities of these mills. Efforts are on to bring a turnaround towards profitability and imbibing
financial discipline.

3.105 The main handicaps faced by the Mills were the lack of working capital and non availability of
raw materials. The Government has put in place a centralised purchase system to procure cotton for
the entire textile sector through professionally constituted committee comprising of RIAB, TEXFED
and KSTC. The sale of yarn through the depot is also monitored by the committee. Consequently raw
material cost has come down heavily, sufficient savings are being generated due to which revenue
and turnover has improved.

3.106 Majority of textile spinning mills in the State are over 25 years old with obsolete technology and
equipments. Even though partial modernization has been done in certain units, it was not at par with
the industry standards. Government constituted an Expert Committee to study the crisis prevailing
in the mills due to obsolete technology and the committee recommended for modernisation of five
Co-operative Spinning Mills in the State. Government approved the modernisation of Malappuram
Co-operative Spinning Mills, Cannanore Co-operative Spinning Mills, Prico and Quilon Spinning
Mills. First phase of Malappuram and Cannanore Co-operative Spinning Mills have been completed.
Second phase of modernisation of mills has started. During 2013-14 for the renovation of spinning
mills under TEXFED an amount of ` 720.00 lakhs with NCDC assistance was provided and an
amount of Rs 500.00 lakh was utilized. Government is considering the modernization of/expansion
of Thrissur, Alleppey and Quilon Co-operative spinning Mills with NCDC assistance.

3.107 It is envisaged to set up 25000 spindles in two stages at K. Karunakaran Memmorial spinning
at Mala. Out of the total revised project cost of the of ` 2387.55 lakh for the first stage to set up 6,000
spindles an amount of ` 750.28 lakh has provided.

3.108 Priyadarsini Co-operative spinning Mills (Prico Mills) was established in 1992. The project
took start after a lapse of 10 year with term loan assistance of DCB for 400 lakh and commissioned
6000 spindles. Later the expansion project was completed in the year 2008 with term loan assistance
of NCDC. The mill started export business and exported 4 containers of Hosiery yarn to Vietnam. The
existing machinery is to be upgraded for making export quality yarn. Out of the required amount of
Rs 2031.40 lakh, an amount of ` 510.00 lakh has provided.

3.109 As per the report on the random study conducted by State Planning Board on Revival of
spinning industry for the period from 2007-08 to 2012-13, the spinning mills under co-operative
sector were profitable only in 2010-11. During the rest of the period under study all the spinning mills
were working in huge loss.

Power loom Industry

3.110 Cloth market in Kerala is more than the national average. Though the state have infrastructure
for production of yarn, the state was lacking weaving initiatives. To promote this, the four integrated
powerloom co-operative societies in the state have been set up. During 2013-14 an amount
of ` 600 lakh had been provided for modernisation of powerloom. Looms under four integrated
powerloom societies were modified with this fund by providing electrical stop motion in looms. After
the modernization the productivity has been increased. Earlier two looms are only attended by one
weaver. After modernization eight looms could be attended by one weaver.

Kerala State Planning Board