Tirupur spending crore on tech to revive dyeing industry

Excerpts from India Business Hour on CNBC-TV18 Watch the full show »

The dyeing industry in Tirupur has come to a complete standstill. This is all because, the Madras High Court ordered them to remain closed till they completely stop environmental degradation. CNBC-TV18's Swathi Narayanan reports more.

Tirupur's dyeing industry once bustled with activity of 50,000 people. It now resembles a ghost town. The Madras high court will allow these units to resume production, only if they achieve zero discharge. It means that the company's production can only be resumed, once they implement the processes of no discharge toxic waste into the environment. But is this possible?

A Sakthivel, President of Tirupur Exporters Assoc said, "We have come across zero discharge as a new technology. No place in this world follows this technology. We are trying to achieve zero discharge. We have spent nearly Rs 1200 crore for this project."

Manickam Ramaswamy, MD of Loyal Textiles said, "About 10-12 yrs, the court asked the Tirupur exporters to go for zero discharge, which is not economically viable and technically not feasible in the long run."

What triggered the High Court to pass an order that is costing losses of Rs 10 crores a day?

The growth of the dyeing industry has meant complete degradation of the Noyyal River. For many years now, these units have been releasing toxic wastes into the river. As a result, the Noyyal River is almost extinct today. The waters of this river cannot be used for irrigation.

The Central and State governments together, have given the industry a grant of Rs 320 crore to find a solution to this problem. The industry says that the actual cost of setting up common effluent treatment plants to treat the discharge from the dyeing units exceeds Rs 800 crore. Loans of Rs 600 crores were taken to set up the treatment plants. On the one hand, only Rs 150 crores out of the government grant actually reached them and on the other, the closure of the units means the loans taken may not get repaid.

K Krishnan, General Secretary of Tirupur Dyes & Chemicals Assoc said, "It is not an easy joke. Our accounts are in the NPA position. Once the NPA is announced, it means we will not get technology upgradation fund (TUF) subsidy on interest basis."

With zero production and mounting debts, the industry is now looking to the government to bring some colour back into its life.