The metropolis, once known as the Manchester of the East, as it could rival the British city's vibrant textile industry, can no longer boast of its past legacy.
With Century Textiles closing its operations in Worli on Wednesday, the whir of the machines has fallen silent. As major textile players, such as Raymond, Welspun and Century, move their plants to other states, the textiles hub has shifted from Mumbai to Gujarat.
Surat is fast turning into a centre for synthetic textiles and Ahmedabad has become the hub for cotton textiles. Most denim facilities too are in Gujarat.
Input costs, high taxes, land costs and lack of government support are bringing the mills to a halt in Mumbai. Besides, real estate has become so valuable in Mumbai that it may often make better business sense to tear down a mill and construct buildings on its land.
"The cost of inputs has increased manifold, leaving Mumbai's mills far less competitive compared with the new upcoming mills in other parts of the country. It is economically not viable to set up manufacturing facilities in metros," said R K Dalmia, president, Century Textiles and Industries.
Century is setting up a greenfield composite mill in Bharuch, Gujarat. It will have a capacity of 30 million metre and will be in operation by the first quarter of 2008.
"Gujarat, being one of the largest producers of cotton, will help the textiles players in getting raw material and reducing the freight charges. The low cost and high availability of skilled labour are other factors making Gujarat an obvious choice, not to forget the rising land prices in Mumbai," said Vikram Rao, director, Aditya Birla Management Corporation.
The various segments of the textile industry is spread across the country. Grey sheeting and poplin are produced in the south.
The processing of grey sheeting and poplin is done in Ahmedabad and the value-addition, such as printing, is done in Mumbai. The final product is supplied to the northern region of the country.
Top company sources at Alok Industries said the processing required a lot of water, which is not a constraint in Gujarat.
At the same time, with gas authorities coming into the picture, the cost of power is also reduced, they added. High cotton production in Gujarat is also driving the textile majors to zero in on the state.
The trends in the textile industry are also changing. Earlier, composite mills were those which had spinning, weaving and processing done at the same place.
