Suresh P. Iyengar
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.
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