Mumbai, Dec. 25
With the sharp rise in cotton prices, textile manufacturers have
shifted their focus to ramping up polyester yarn production capacity.
Alok Industries, a leading integrated textile company, plans to
double its polyester yarn capacity to 1,200 tonnes a day by March at an
investment of Rs 800 crore.
Mr Sunil O. Khandelwal, Chief Financial Officer, said the company had
foreseen the shortage of natural fibre cotton and would begin
increasing polyester yarn production from next month.
Similarly, Ganesh Polytex, which produces polyester staple fibre by
recycling plastic pet bottles, plans to increase its processing capacity
by 15,000 tonnes to 72,000 tpa. As part of its forward integration
plans, the company is also putting up 25,000 spindles to produce
polyester yarn at its existing Bilaspur plant in Chhattisgarh. This will
involve an investment of Rs 125 crore.
Mr Gopal Agarwal, Chief Financial Officer, said Ganesh Polytex would
tap the Centre-sponsored Technology Upgradation Fund (TUF) scheme for
the spindles.
The price gap between cotton and polyester yarn has widened in the
last few months with demand for the former increasing substantially on
the back of a lower-than-expected crop this season, said Mr Khandelwal.
Cotton yarn of 40s counts currently trades at Rs 260 a kg while
polyester yarn of 80-denier is priced at Rs 110-115 a kg. Cotton prices
are expected to stabilise by mid-January with arrivals improving. The
most popular variety, Shankar-6, may fall from Rs 41,000 to Rs
37,000-38,000 a candy as supply improves.
More than the fall in production, the uncertain Government
policy on cotton has made it difficult for companies to plan their
future, said an analyst. The textile industry's shift to polyester has
pushed up the prices of the key raw material, PTMEG (poly tetra
methylene ether glycol), but this has been moderate compared to cotton,
he said.
The fall in cotton production over the years has pushed up use of
polyester by the textile sector. In the last decade, this has nearly
doubled from 30 per cent to 55 per cent and expected to further increase
to 70 per cent in the next five years, said Mr Khandelwal.
On the quality issue, he added, a fabric with 75 per cent polyester
and 25 per cent cotton is considered a good blend given the price
advantage. A shirt made of 100 per cent cotton would cost about Rs 600
while that in polyester Rs 350-400.