This is why it makes sense to set up a textile mill in Gujarat

When Gujarat Chief Minister Narendra Modi asked Tamil Nadu’s Textile industry people in Chennai to come and set up textile mill in Gujarat, the Textile tycoons found this offer worth taking, primarily because of the fact that cotton – the main row material for textile product comes from Gujarat.

Now if somebody has textile plant in Tamil Nadu, he has to procure cotton all the way from Gujarat, the task that adds considerably high transport costs. Moreover if there is a desire to export the textile product to western market, Gujarat is the best option due to availability of ports that are nearest to that area.

In this connection, here is an article published in ‘The Hindu Business Line’ that narrates how China gets Gujarat cotton cheaper than Tamil Nadu mills due to freight costs!

The article states that while approximate charge for transportation of 150 bales cotton container to Tamil Nadu through road is 90,000 Rs and through ship Rs 82750 from Gujarat, the same quantity can be transported to China for Rs. 22500, Indonesia Rs 27250, Bangladesh Rs 63500, and Turkey Rs 81500.

Gujarat based textile industry sources told GujaratMoney that it is not understandable at all why spinning mills should not be in Gujarat and should be there far far away in Tamil Nadu.

It clearly makes sense to have a spinning mill in Gujarat rather than in Tamil Nadu due to simple reasons of availability of cotton and proximity to export market, along with many other reasons like good labour culture, less or negligible rate of corruption, constant policy, political stability and excellent power supply among others.

Perhaps after Narendra Modi’s pre-Vibrant summit visit, the TN politicians started smelling that the industry could step out of the state to reach Gujarat, and therefore one Congress MP wrote letter to central government complaining about Modi’s ‘poaching drive’.

1 comment for “This is why it makes sense to set up a textile mill in Gujarat

  1. BAPTY .S
    December 30, 2010 at 11:18 am

    GREAT IDEA MAKES PRACTICAL & EXTREME BIZ SENSE FOR T.NADU BIZNESSMEN. IT IS VERY COST EFFECTIVE WITH ALL OTHER ADDED BENEFITS THROWN IN.ONLY POINT WHICH IS BAFFLING, IF TRANSPORT COST TO CHINA IS SAY LESS THAN RS 25OOO FROM GUJ, WHY NOT SHIP IT TO CHENNAI PORT & TRUCK IT TO COIMBATORE. IN ANY CASE MILL OWNERS IN COIMBATORE WHO HAVE BEEN SLEEPING LAST 10 YRS OR MORE SHLD WAKE UP, TO IMPROVE THEIR BALANCE SHEETS.

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