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Report | January 2014

Powerloom Economics: Trader VS Weaver

If powerloom fabric manufacturers themselves process and market their products, they can earn far more profit, explains Prof PR Wadje.

The textile industry in India is one of the few industries which has the potential to emerge as a true global player. A well-devised action plan coupled with effective delivery mechanism can see India as emerging as a winner in the quota free market. Cotton/Man-made fibre textile mills in India increased only marginally by 51 between 1999 to 2003. The growth was 2.8 per cent in five years while powerlooms increased by 22,000 from 1999 to 2003. The growth in powerloom was 6.14 per cent in five years. The little growth in powerloom unit is due to recession in textile market during this period. Ichalkaranji powerloom fabric market is classified into 10 categories as shown in the Table below. The powerloom owners who are doing job work are getting very little profit whereas the powerloom owners who are purchasing yarn and manufacturing fabric in their factory can earn more profit compared to the job work doing powerloom owners.

Market of powerloom fabrics in Ichalkaranji
Most of powerloom fabrics marketing is done through local traders. The SMEs either do the job work of the trader or sell their fabric to the trader. There are very few SMEs, which sell their fabric outside Ichalkaranji or take the order from garment/made-up manufacturers directly and supply.

Market analysis vis-á-vis focusing on quality upgradation
SMEs cannot fathom the market and users of their products and hence they have to depend on the link person for this purpose. Besides, there is no synchronisation of thoughts and activities among SMEs, which can only lead to the preventing of synergising of the community as a whole. SMEs, with their cut-throat competition only end up creating problems for one another by establishing a cost based market and ultimately the commissioning agents/ traders are benefited out of this. If the powerloom owners & processors are well aware of the market they can be catering to and can work in a network to cater to bulk demands. There are some SMEs, which have changed their business from powerloom to knitting. They have basically formed co-op society to start the business; taken loan from State Government (NCDC Scheme) and some others have taken the loan from the Central Government under the TUF Scheme. The above points have been suggested based on the response of powerlooms owners on issues related to direct marketing and by introspection analysis.

Problems in powerloom fabric market

  1. The yarn depots are dominated by the Commissioning agents, who artificially create scarcity/shortage of yarn and thus hike the prices.
  2. Commissioning agents take away lions share of the value added finished fabric; first in the supply of yarn from the composite mills to the depots and then in the marketing of finished fabric.
  3. As the manufacturing of fabric from yarn to finished stage is not taking place under one roof, it is very much necessary for the SMEs to have common thinking and goal to come together and form networks.
  4. The units solely depends on the merchant traders for their survival. The job work charges collected from the merchant trader is the only income to meet the operating expenses. Arrears of job work changes and default in payments are issues often confronted by these SMEs/units.
  5. Major problems related to quality and market access being faced by the local powerloom cluster and relating industry are:
  • Inferior quality of raw materials, ie, yarns, dyes & chemicals.
  • Lack of upgradation and modernisation of looms.
  • Inadequate maintenance of existing looms.
  • Outdated systems/techniques of p
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