NSIC Planning To Promote Bulk Purchase Of Yarn

National Small Industries Corporation Ltd plans to promote bulk purchase of cotton yarn under the consortium arrangement. The corporation is exploring the possibility of entering into a tie-up with some major yarn producers in the region who can commit a specified quantity to be supplied regularly to the end-user - textile/garment producing units joining in the `yarn consortium''.

NSIC sources told Business Line that it would act as a single purchaser for these units. It would for this purpose take `end-to-end'' minimum commitment from the user industries for lifting a certain assured quantity of cotton yarn under the consortium arrangement. This would entitle the textile producers to a share in the bulk cash discounts the NSIC''s purchases would command from the yarn producers.

The corporation is keen to give the `yarn consortium'' a try as part of its raw material consortium planning for SSIs. The sources said that considering the sensitivity of the yarn transactions and the need to ensure payments, the corporation may opt initially for the
bank-guarantee/advance payment based yarn transactions and the payment would include the minimum service charges to be borne by the SSI units buying yarn through the NSIC.