New spinning mills to increase supply of coarse yarn in Gujarat

The prices of cotton yarn skyrocketed when economic activities began in September 2020 after a very tough lockdown due to the first wave of COVID-19 in India. The then lucrative yarn prices encouraged spinning mills to increase production capacity and setting up new units. As a result, Gujarat witnessed a trend for setting up new spinning mills.

According to industry sources, about two dozen new mills are being set up in Gujarat, some of which have already started production. According to industry sources, all news mills would have started production in the next one-and-a-half year.

Currently, about 100 spinning mills are operational in Gujarat. These mills have production capacity of 35 lakh spindles and 70,000 rotors.

“After the commissioning of the new mills, the cotton produced in Gujarat will be fully consumed in the state itself. At present, average 100 lakh bales (170 kg per bale) of cotton is produced in Gujarat. Out of this, only 70 lakh bales are consumed by the spinning mills in the state,” Gautam Dhamsania, secretary of Spinners Association, Gujarat (SAG) told Fibre2Fashion.

According to Dhamsania, spinning mills in Gujarat produce 20 count to 30 count ring frame yarn, which is used in both weaving and hosiery items. Open End yarn of 6 count to 20 count is also produced by the mills, which is mostly used in weaving products.

However, trade sources from Mumbai said that Gujarat’s mills can increase coarse yarn supply of lower count because thinner yarn production will have some limitations due to climatic conditions.

Yarn production was highly profitable as cotton prices remained at lower side till mid-2021. However, the recent steep rise in cotton prices worried investors who are setting up new mills in Gujarat. In recent weeks, cotton yarn demand has remained weak from downstream industry which has put pressure on the margins of the spinning mills.

ALCHEMPro News Desk (KUL)