No end in sight to Tirupur dyeing units' stir

COIMBATORE: Even as the New Year has cheered the export prospects for thousands of knitwear units at Tirupur, what has dampened their spirit is

the continuing strike by the dyeing units in support of their demand for sharing the cost of effluent treatment by the Centre and Tamil Nadu Government.

On Monday, the indefinite strike spearheaded by Dyers association of Tirupur entered 11th day and the exporters are worried about meeting the delivery schedules on time. "If the strike continues further, it will be detrimental to the industry," said a leading exporter.

He said, garment making is a chain process and even if there is stoppage in one area of work, the entire chain will come to a standstill at some point of time.

Already the knitwear industry is incurring a production loss of around Rs 30 crore per day due to the strike. Only few big export houses have in-house processing facilities and it accounts for only 20% of total dyeing units in Tirupur.

Warsaw International’s managing partner Raja M Shanmugam told that the situation is getting worse for exporters, who are dependent on outsiders for dyeing and bleaching.

"January is a crucial month for us as the cluster is famous for cotton knitwear," he said, adding, the industry starts executing summer orders to Europe and US from this month onwards.

"If there are delays in shipments, then our buyers might move to our competitors in other countries like Bangladesh," he added.

He said, the shops in the ‘West’ display new collections month on month and if the shipments for any particular month is delayed then it will result in cancellation of orders.

"We are yet to gauge the reaction of the buyers, as they were on a holiday for the last two weeks due to Christmas and New Year. We have narrated to them the problems faced by the industry and are anxiously waiting for their response," he added.

The exporters usually incur penalty charges of around 20% of total cost of product for late shipments and another 15% will be lost for airlifting the consignments. "Since we are working on a wafer thin margin of 5% to 6%, the industry will incur 30% loss due to this strike," Mr Shanmugam added.

If exporters are the ultimate sufferers, the strike had started affecting other segments of value chain also. Tirupur-based Indian Dyes and Chemicals MD L Narayanaswamy said the business is almost down by 80% as only individual dyeing units are executing orders now. According to sources in Pure group, which is a major supplier of chemicals to units in Tirupur, " Normally, the dyeing units used to observe a token strike to highlight their stand on their pollution front. For the first time, the strike is continuing for long".

Further, they said, " those on strike are mainly the units forming part of the cluster group and which have set up common effluent treatment plants. Whereas, 16 to 17 major dyeing units, which have set up their own individual ETPS, have not joined the stir. They are also under pressure to support the agitation. Nearly 60% of our supplies go to these individual units and the rest to cluster units. To that extent, the stir has affected our business".

Tirupur Dyes and Chemicals Association president K Nagesh told ET that the dyes and chemicals companies in Tirupur are losing nearly Rs 3 crore sales every day due to the strike.

For tackling pollution, he said, low salt range dyes are available in the market but they are 25% to 35% costlier than the normal dyes. "However, using such products will reduce environmental pollution," he added.

In October, the Supreme Court imposed a penalty on dyeing units in Tirupur for cleaning river Noyyal and other water bodies polluted by the discharge of toxic effluents from their factories all these years. DAT general secretary K Krishnan told ET that the dyeing units are in the process of paying the penalties individually before January 5 this year as per Apex Court order.

"It has nothing to do with this strike. We are observing this indefinite strike mainly to get financial support from the state and central governments for complying with the strict pollution control norms," he said, adding, the association wanted the two governments to share about 75% of their ‘burden’ (Rs 800 crore) incurred in establishing and upgrading common effluent treatment plants to achieve zero discharge. He said, the 600-odd dyeing units participating in the strike are facing a production loss of Rs 9 crore daily. Also, the industry is afraid of losing 50,000 to 60,000 employees, who are in the process of returning to their native places in Southern Tamil Nadu following closure of dyeing units for the past ten days.

"In today’s scenario, it is very difficult to retain work force and we are trying to keep them in Tirupur by paying wages despite strike," Mr Krishnan said. Industry sources added, the workforce have mostly left the city and are not expected to return till Pongal festival is over by mid-January.