TEXTILES ESCAPES WRATH OF QUAKE
Byline: N. Vasuki Rao
NEW DELHI — The devastating earthquake that hit the western state of Gujarat Jan. 26 will have only a marginal and short-term impact on the state’s textile output because major production centers didn’t suffer much damage, industry executives say.
The earthquake’s epicenter was near the town of Bhuj in northwestern Gujarat, while textile production centers are several hundred miles away to the east and south. The textile industry in Gujarat is spread over main cities and towns including Ahmedabad, Surat, Vapi, Ankleshwar, Jetpur and Baroda.
There are about 800 processing units and over 250,000 powered shuttlelooms in Gujarat. Surat alone accounts for about 65 percent of total Indian man-made yarn and fabric production, and 25 percent of the capacity of dyeing and printing factories. There are over 500 units in the small-scale sector, manufacturing textile dyes and chemicals. Gujarat accounts for 24 percent of the total cloth made in India, and contributes 31 percent to the country’s total production of cotton.
Comments by local businessmen, however, suggest that the picture in textile production centers is not grim, and production losses — estimated at up to 20 percent — would come only because workers fled after the earthquake.
Every third family in Gujarat has a link with textiles or allied industries, like dyes and chemicals, textile machinery, yarns and fibers or other raw materials.
“There will not be any major impact on textile production,” said Sunil Parekh, Ahmedabad-based director of the Confederation of Indian Industry. “Workers are already coming back.”
Among the major textile production centers, there was damage to buildings in the capital city of Ahmedabad, but it was confined mainly to residential buildings, with almost no direct damage to industrial or commercial structures.
Ahmedabad, formerly known as the “Manchester of India,” has now gained the title of the “denim city of India,” with many manufacturing facilities located in and around Ahmedabad.
Rajesh Varma, an executive with the Adani group — a large trading company — said there was not much impact in Ahmedabad in the week following the earthquake, as previously manufactured goods were being shipped as usual. However, he said there would be a short-term problem of labor shortage as the full complement of staff was not reporting for work. The Adani group’s textile exports include raw cotton, solid and printed cotton fabric, bed linens and towels.
Similarly, Surat — in southern Gujarat, where damage was minor — is a center for small textile mills, but these have not reported any major losses.
“There will be only a short-term impact on production because workers have fled,” concurred Bharat Hathivala of the Surat-based Kinsum Industries.
Another local businessman said work stopped for just three days in Surat, and he expected operations to return to normal within a month.
The earthquake caught the state administration ill-prepared to deal with the damage. One week after the earthquake, the administration was still struggling to get relief to remote villages in the state and to even make an accurate assessment of the dead. Any determination of losses to trade and industry is likely to take some time.
According to preliminary government estimates, private property worth $1.2 billion was destroyed in the earthquake, while public property worth $215 million would have to be rebuilt. The loss of assets managed by utilities like power and water services is also estimated around $215 million, and loss to trade and industry (including premises and opportunity cost) was about $430 million in just five days. The Federation of Indian Chambers of Commerce and Industry put damage to factories in the state at about $320 million.
“Some impact on textile exports cannot be ruled out, but this will be on account of delays until the infrastructure is put back in place,” said S. Rajagopal, executive director of the Bombay-based Cotton Textiles Export Promotion Council.
Exports from Gujarat include denim, processed fabrics, and bed linens.
Gujarat, according to industry sources, is not a major apparel manufacturing center, though it supplies fabric to apparel manufacturers in other parts of the country.
Vijay Mathur, export director with the Apparel Exports Promotion Council, said India exports 110 million women’s dresses every year to the U.S. and Europe. About 10 to 15 percent of the fabric, usually moss crepe, comes from Surat and adjoining areas. Fiber is given to small factories for weaving. He said the situation in Surat is not bad, but weaving factories elsewhere might be affected.
Apparel exports from factories in the Kandla free-trade zone would be badly affected, however, as the zone was near the quake’s epicenter.