Panipat’s Recycled Yarn Manufacturers Brace for Production Cut Amidst Sluggish Demand

In response to a persistent downturn in demand, recycled yarn manufacturers in Panipat, India’s home furnishing hub, have announced plans to slash production by 25 percent. This move comes as the region faces its third consecutive year of sluggish demand, posing challenges for the local textile industry.

Following a global surge in home textile consumption during the height of the pandemic, demand has waned as normalcy gradually returns. Furthermore, the ongoing Russia-Ukraine conflict has introduced additional hurdles, impacting supply chains and causing global inflation. As a result, prices for recycled yarn have plummeted by approximately 20 percent, forcing mills to make strategic adjustments.

Panipat’s roller spinning production units, located in northern India, will now operate for only five days a week, effectively reducing production output. Previously, these mills were already operating in single shifts due to limited demand, but the current circumstances have necessitated further cutbacks.

The year 2020 witnessed a remarkable surge in the home textiles sector, as individuals sought comfort and solace within their own living spaces during extended lockdowns. Responding to this increased demand, recycled yarn mills in Panipat and neighboring areas expanded their capacities to cater to both domestic and international markets. However, the gradual easing of pandemic restrictions, coupled with the supply chain disruptions caused by the Russia-Ukraine conflict, has triggered a decline in consumer demand for home textiles.

This decline in demand has led to a stockpile of home textile products in retail and brand warehouses, prompting many retailers and brands to suspend new orders and delay existing ones. Consequently, the surplus inventory has impacted the market, resulting in a decline of approximately 20 percent in recycled yarn prices over the past few months. To adjust to the changing landscape, roller spinning mills have scaled back their operations to a single shift, with Sundays designated as a day of rest.

Recognizing the need for further measures, the Northern India Roller Spinners Association recently convened a meeting in Panipat to address the situation. In a bold move, mills will now observe a two-day closure each week for a month, effectively reducing production by an estimated 25 percent. Preetam Singh Sachdeva, President of the Association, explained, “We have decided to take a full holiday every Friday and Saturday for one month to further reduce production. This decision is expected to reduce production by around 25 percent.”

With an estimated turnover of ₹50,000 crore, Panipat’s home textiles market encompasses both domestic and international sales, contributing 70 percent and 30 percent, respectively. However, due to the persistent slow demand from both markets, recycled yarn production has declined by half from its peak.

As the textile industry in Panipat grapples with these challenges, stakeholders are hopeful that these strategic production cuts will help stabilize the market and facilitate a gradual recovery. The Association will closely monitor the situation and assess the impact of these measures, with the aim of restoring balance and stimulating growth within India’s home furnishing sector.

Amidst these testing times, Panipat’s recycled yarn manufacturers continue to demonstrate their resilience and adaptability, ensuring that they remain at the forefront of the textile industry’s drive for sustainability and innovation.



Leave a Comment

Your email address will not be published. Required fields are marked *