In view of rising transportation costs for bringing in cotton by road from major growing states of Gujarat and Maharashtra, textile mills in the region have decided use ships to boost profit.
The apex body of textile mills, Southern India Mills Association, recently signed an agreement with Indian National Ship Owners Association for bringing cotton by ships, which is expected to become a reality in another fortnight.
This would bring down the transport cost initially to Rs 550 to 700 per bale (170 kg) as against Rs 850 for bringing by road, SIMA secretary general, K Selvaraj said.
Tamil Nadu requires at least 130 lakh bales per year. Of this 60 lakh bales are imported from Gujarat and the increased freight charges escalated the product cost, cutting into profit margin, he said.
Gujarat, which produces nearly 120 lakh bales per year, consumes only 15 to 17 lakh bales for its mills. One of the mill has already brought nearly 10,000 bales through Kochi port.
If this system works out successfully, the shipping cost can be reduced to Rs 500 in one year and around Rs 400 per bale from the next year onwards, Selvaraj claimed.
