Indian Journal of Textile ResearchVol. 7, September 1982, pp. 76-81

Economics of Open-end Spinning in India

T V RATNAM

The South India Textile Research Association, Coimbatore 641 014

Receired 12 June 1982; accepted 15 July 1982

The economics of the open-end spinning system in relation to that of the ring spinning system has been studied under theconditions and constraints prevailing in India. An expression has been derived to compare the return on capital for open-endand ring spinning systems. The findings are based on actual performance trials with large-scale spinnings at mill level. The inter-relationships between rotor costs, speeds and returns have been worked out for both cone and hank yarns. Comparisons havealso been made with small-scale spinning mills in the case of 6 and 10s counts. The economically spinnable count on the open-end spinning system and the corresponding maximum rotor costs have been projected for a time horizon of the next 20 years.

The main objective of the present study was to assessthe economics of the open-end (OE) spinning system inrelation to that of the ring spinning system under theconditions and constraints prevailing in India. Sincefor equal yarn production the capi!al investmentwould be greater for OE spinning system, the return oncapital invested has been taken as the criterion forassessing the economics.

An expression has been derived to arrive at theeconomics of the OE spinning system. Large-scalespinning trials at mill level were conducted to evaluatethe actual performance of the OE spinning systemunder the conditions prevailing in Indian mills and theeconomics has been worked out. Both hank and coneyarns have been considered. The inter-relationshipsbetween rotor cost, speed and returns have beenexamined. Comparison has also been made betweenthe OE spinning systems and the small-scale spinningmills for 6 and 10s counts, which are largely producedby the latter.

As the main savings in the OE spinning system arefrom reduced wages, rise in wages gives a costadvantage for this system. This aspect has been takeninto account while working out the economics. Inaddition, the economically spinnablc count and thecorresponding maximum rotor costs have beenassessed. Projections have also been made for the years1990 and 2000.

Expression for Working out the EconomicsA mathematical expression for working out the

economics of the OE system has been derived.Comparison has been made between a new ringspinning mill and a new mill giving th'";ame outputexclusively with open-end machines.

In order to determine the contribution by increase inwages in future, an expression has been derived and

76

given in Appendix 1. It is seen that the additionalsavings from increased wages amount to incrementingthe present wage level by 12.8 ~o.

Rs perspindle

Cost of ring frameCost of fly frame. winding machine and saving inbuilding space for OE JCost ofOE machine: '0' Rs per drum at'( times more . 0

production than ring frame spindle

Labour required for ring spinning hLabour required for OE system as a ratio for ringspinning aLabour required for OE system ail

Other conversion costs for ring spinning kOther conversion costs for OE system = mSavings in net output value for OE as compared withrrng spinningWages per operative per day w

Imposing the same return of 'c' times the capital forboth the systems, the OE spinning systems would bemore economical than the ring spinning systems, if

. .. (l)

The return on capital (1) required for the OEspinning system, assuming a return on capital of 'p' forring frame with a capital cost of R rupees per spindle, is

pR+wh(1-u)-(m-k)T= --_~_------- --- ---o .

R +- -r- ft .

'" (2)

RATNAM: ECONOMICS OF OPEN-END SPINNING IN INDIA

where p is a ratio and pR gives the profit per spindle peryear. The numerator of the expression (2) gives theprofit and the denominator the capital for equivalentspindle in the OE-system.

Results and DiscussionMill Level Study

A study was undertaken at mill level on a BD-200machine of 40drums with a rated speed of 36,000 rpm':The study covered a wide range of counts from 6 to 30s.The mixings normally used by mills for these counts aswell as some inferior mixings were tried in each count.The performance of the OE-spun yarns in post-spinning departments, including high-speed automaticlooms, was found to be as good or even marginallybetter than that of the ring-spun yarns, though thestrength of OE-spun yarns was lower by about 30 ~~in30s, 18 ~~in 20s, 12 ~;, in IOs and about the same in 6s.The high incidence of trash in Indian cottons was notfound to be an inhibitive factor in the spinning on theOE system. OE-spun yarns showed a strikingimprovement in yarn regularity (5-6 U ~~for 6, 10 and20s, and over 2 U ~;, for 30s counts). The number ofimperfections showed a steep fall of 90 ~;,. Theappearance improved by I grade and the hairinessdropped by 40-80 % for the OE-spun yarns. Also, theincidence of end breaks at the spinning stage for a givenlinear length of yarn showed a very lage drop for theOE system (80-90 /,;, in 6, 10 and 20s and about 50 j;, in30s counts).

The fabrics produced from OE-spun yarns werefound to contain fewer defects (10-45 ~;,)and possessedbetter cover and visual appearance. However, thetensile strength, tear strength and bursting strengthwere all lower by 15-25 ~;,. In a market survey, about80~;' of the merchants rated the OE-spun yarns andfabrics superior to the ring-spun yarns and fabrics, andabout 15 ~'o felt that they were equal.

Economics

The economics of the OE system has been workedout considering that the raw material costs and theselling prices of yarns and fabrics would be same forOE and ring spinning systems. The economics has notbeen worked out separately for fabrics, as it is assumedthat the conversion cost from yarn to fabric would bethe same for both the systems. In estimating the ringspinning costs, the working conditions prevailing inhigh-productivity mills have been taken intoconsideration. The speeds, twist multipliers (TM) andproduction rates assumed for the OE system are givenin Table I.

As regards the workers to be employed, SITRAstandards were used in the case of the ring spinningsystem and time study was applied for the OE system.

Accordingly, an assignment of 200 drums per operativein 6s, 300 drums in lOs, 500 drums in 20s and 900drums in 30s was taken. Ancillary operativecomplement was assumed to be one for every four OEmachines of 200 drums each. The operative hours toproduce 100 kg of yarn (HOK) for the two systems arecompared in Table 2. The figures for hank yarns are fordouble hank cross-reeling. In the case of the OEsystem, a higher production (per reeler) of 50~;' in 6sand 25~;' in 30s count was taken in view of the cone-feed.

In arriving at the capital requirements, suitableallowances were made for the reduction in buildingspace for the OE system as compared with the ringspinning system. The cost of humidification and theworking capital requirements were assumed to beequal for both the systems.

A minimum return of 25~;' on investment wasimposed on both OE and ring spinning systems. Thisfigure represents the average level prevailing in SITRAmember mills and is also sufficient for a mill to declarea dividend of 12 ~~ after depreciation, interest and tax.

For arriving at the power cost of the OE system, theinformation obtained from literature was sup-plemented with actual observations. It was observedthat, on the average, the power cost per kg of yarn forthe OE system, at· speeds around 36,000 rpm, wasapproximately the same as that for ring spinning.Allowance was also made for the differences in theconsumption of stores. It was assumed that in the case

Table I-Rotor Speeds, Twist Multipliers and ProductionRates for OE-Spun Yarns

Parameter OE-spun yarns------ .------ .._-----_.----- ._-------

6s 10s 205 30s

Rotor speed, rpm 31000 36000 36000 36000Twist multiplier 4.87 4.83 5.00 5.12Production/drum/

8 hr. g 2808 1616 535 286

Production in OE

system 5.42 4.46 2.76 2.58------Production in ring

spinning system

Table 2-HOK for OE and Ring Spinning Systems

Count. Cone yarns Hank yarns

Ring OE Ring OEspg spg

6s 26.7 7.6 27.8 12.210s 30.3 8.2 32.5 15.320s 32.8 10.8 39.1 22.530s 42.0 12.0 52.2 29.5

77

·,INDIAN J TEXT RES, VOL. 7, SEPTEMBER 1982

of the OE system, the rotor would be replaced onceevery 5 years and the opener roller once every 4 years,whereas in the case of ring frames, spindles, draftingsystems and rings will be changed once every 7 years.

Return for Different Rotor CostsThe return on capital and the maximum economic

rotor costs were arrived at by substituting thefollowing values in expression (1): w=4.30, c=0.25,s = 0 and r = 578. All the values are in 1980 prices.

The drum speed was kept at 36,000 rpm for IOta 30scounts and 31,000 rpm for 6s count.

The values of the other parameters for differentcounts are given in Table 3.

The calculated returns on capital for different countsand rotor costs are given in Table 4. In 6 and 10scounts, the return on capital is in the range 30-40 ~~fordifferent rotor costs. In 20 and 30s counts, the return isonly 25 ~~for the rotor costs of Rs 4500 and Rs 3000 perdrum. A rotor costing Rs 6000 gives a return of onlyabout 20 ~~ in 20s count and 16.5 % in 30s count asagainst a yard-stick of 25 ~~ applied. The decline inreturn on capital as the count becomes finer is steeper ifthe rotor cost is high. In other words, high rotor costbecomes more critical as the count becomes finer:Generally, an increase of Rs 500 in the cost of a rotorresults in a fall of 1 ~/~.in the return on capital.

The plot of rotor cost against count (Fig. 1) showssome interesting combinations of these for getting 25 ~~return. There is a sharp fall in the maximum rotor costas the count goes finer, particularly in the range 6-20s.While the rotor cost can be as high as Rs 16,500 and Rs12,000 to spin 6 and 10s counts economically, the costshould not be more than Rs 4000 for 20s count. It isobserved that for a rotor cost of Rs 6000, the countwhich breaks even is 16.2s. A higher rotor cost of Rs7500 would bring down the economic count to 14.2sand a lower cost of Rs 4500 would push it upwards to18.7s.

Return for Different Rotor Speeds

Generally, an increase in rotor cost would beaccompanied by increase in drum speed. An increase indrum speed primarily helps to bring down thecomponent of machine cost per unit production. A25 ~~ increase in speed results in a reduction in thecapital cost by Rs 220 in 6s to Rs 460 in 30s, if the rotorcosts Rs 6000. This drop in capital investment would berelatively greater in 30s count at about 13 ~~as againstabout 5 ~~in 6s count. Another impact of higher speedis the saving from higher labour productivity. This hasbeen estimated to be of the order of 5·10 resulting ina reduction in wages to the extent of about Rs 7 perspindle per year. On the other hand, the power COSt

would increase and there may not be any significant

78

Table 3-Values of Parameters Used for the Calculation ofReturn on Capital for OE-Spinning System

Parameter Count .':

6s 10s 20s 30s

5.42 4.46 2.76 2.58 tt

f 531 528 253 178 I

k 489 433 389 366m 491 421 333 300a 0.28 0.27 0.33 0.29h 137.6 110.1 63.4 46.4

Table 4-Return on Investment (~~) for Different Countsand Rotor Costs

Rotor cost at 6s IOs 20s 30s1980 prices

Rs

Rotor speed, 36,000 rpm

Calle Yarn

3000 40.3 40.9 28.5 24.74500 37.8 36.8 23.3 19.76000 35.5 33.5 19.8 16.47500 33.5 30.7 17.1 14.0

Hallk Yarll

3000 38.1 38.0 26.4 22.94500 35.7 34.3 21.6 18.36000 33.5 31.2 18.3 15.27500 31.6 28.6 15.9 13.1

Rotor speed, 45,000 rpm

COIlt' Yam

3000450060007500

41.2 42.3 30.7 26.839.1 38.8 25.7 21.837.1 35.8 22.1 18.535.3 33.2 19.4 16.0

38.8 39.2 28.1 24.636.7 35.9 23.5 20.134.8 33.1 20.3 17.033.2 30.7 17.7 14.7

\3000450060007500

15000

s~~o 10000a:

ffia. 7500:;;o 6000u

I- ......•.- - - - - - - -- - -t- - -

I ', ,-......,. - - ~ - ,- - - - - - T- - - .- - - --~ ---------+-.--:---~-_~~;--4500

3000

10 15 20 25 30COUNT

Fig. 1- Maximum economic cost per rotor (36,000 rpm-cone yarn)

RATNAM: ECONOMICS OF OPEN-END SPINNING IN INDIA

difference in stores cost. On balance, the conversioncost may not materially differ for the two speeds.

Thus, the main advantage from increased rotorspeed is derived from lower capital investment. Thereturn on capital would be more by about 1.5 I'~in 6sand 2.2 I'~in other counts (Table 4). The maximumrotor cost to break even increases by about 20 % for a25:;;' increase in rotor speed, i.e. 0.8;'; higher cost forevery 1 :;~ increase in speed. In other words, if higherspeeds can be achieved at a lower rate of increase incost than 0.81';" the OE system would tend to be morepaying in future.

It is relevant to consider here the effect of 25 ~/~increase in speed for the ring spinning system. Therewould be a saving in capital investment of only about3 % in 6s and 6 I'~in 30s, which are only half of those forthe OE system. The saving in wages from increasedlevel of labour productivity would be more in the rangeRs 15-30 per spindle per year. The increase in powercost would be slightly less at about Rs 15 per spindleper year. The net benefit from higher speed would be anincrease of about 1 :;~return in 6s and about 2 ~\) in 30s,which is the same as that for the OE system. Thus, anyincrease in speed in future to a comparable extent willnot affect the validity of the conclusions drawn.

Hank Yarns

If the mills have to produce hank yarns in the OEsystem, the economics will differ. Assuming that thehank yarn is in DHCR form and the cone feed (fromOE machine) would increase the production (perreeler) by 50 % in 6s and 25 i;; in 30s, the complement oflabour for the OE system will be more by about 60 1';, in6s and 150 I'~in 30s than for the cone yarns (Table 2).In 20 and 30s counts, more operatives would beengaged just for transferring the yarn from cones tohank as compared to those engaged for convertingfrom fibre to cone. In comparison with ring spinning,the net reduction in operatives for the OE systemwould be about 55 ~/~in 6s and 451'0 in 30s as againstabout 70 I'~observed for cone yarns. The return oncapital is lower by about 1.5:;~ in 20 and 30s and 2.2 I'~in 6 and 10s than that for cone yarns (Table 4). Evenwith a higher rotor speed of 45,000 rpm and lower rotorcost of Rs 4500, the hank yarns are not economical for20s. At a rotor cost of Rs 6000, the hank yarns would beeconomical for counts up to 16s for a rotor speed of45,000 rpm and up to 15s count for a rotor speed of36,000 rpm (Table 5). In counts below this range, theOE system would be paying in spite of the highcomplement of labour for hank yarns.

Small-Scale Spinning versus Open-End Spinning

For counts 6s and IOs, the open-end spinning has tocompete with spinning in the small-scale sector, where

Table 5-Maximum Economic Count

Rotor Rotor cost Cone yarn Hank yarnspeed at 19S0 -- --.-.----

rpm prices 19S0 1990 2000 1980 1990 2000Rs

36000 3000 29.2 36.0 40.0 24.0 2S.9 36.04500 IS.7 21.2 23.4 17.3 IS.7 21.0

6000 16.2 17.S 19.4 14.S 16.2 17.87500 14.2 15.8 17.9 12.S 14.3 15.9

45000 3000 40.0 40.0 40.0 28.9 36.0 40.04500 21.S 27.4 35.0 18.8 21.1 26.76000 17.9 19.5 24.6 16.3 17.7 19.37500 15.9 17.6 19.3 14.4 15.S 17.4

the wages are much lower. Consequently, in spite of thelow labour and machine productivity, the cost ofproduction in a small-scale spinning mill (excludingthat required for recovering capital investment) isfound to be about the same as in the OE system.The return on capital would be only I0 I'~ forthe OE system compared to 25 I'~for the small-scalespinning mill, if the costs of the raw materials and theselling prices of yarns are assumed to be same for both.However, in the OE system, the yarn quality would bevery much superior compared to that in the small-scalespinning units. Therefore, one could expect a highersale price for the yarns produced on the OE system.Alternatively, a much lower grade raw material can beused in the OE system. To get a return of 25 I'~in theOE system, it may be necessary to get 15 % higher yarnselling price or alternatively use 18 I'~cheaper rawmaterial, so that the OE system can compete with thesmall-scale spinning mills. Probably, a slow-speed OEmachine with much lower capital cost may prove to bemore advantageous for spinning counts IOs and below.

Future ProjectionsThe economics worked out so far is based on the

costs prevailing in 1980. The OE system will becomemore and more attractive in the years ahead, since thewages (which give the maximum savings from the OEsystem) are likely to increase at a faster rate. Therefore,an assessment of the economic picture of the OEspinning system in 1990 and 2000 has been given inTables 5 and 6. The returns on investment for differentrotor costs and years for 20 and 30s counts are given inTable 7. In comparison with the year 1980, the returnon capital will increase on the average by 1.8 I'~in 1990and by 2.4 I'~in 2000. The increases in return areslightly higher for lower rotor cost and greater rotorspeeds. The optimum economic rotor cost at currentprices would be more by about 18 % in 1990 and byover 40 ~~ in 2000.

With a rotor speed of 36,000 rpm and a rotor cost ofRs 6000 (at 1980 prices) the economic count for cone

79

INDIAN J TEXT RES, VOL. 7, SEPTEMBER 1982

Table 6-0ptimum Economic OE Rotor Cost at 1980 Prices

Rotor speed Type of 1980 1990 2000rpm yarn

Count. 20s

36000 Hank 3370 3920 4630Cone 3950 4670 5630

45000 Hank 3960 4630 5520Cone 4760 5690 6910

Count. 30s

36000 Hank 2510 2920 3430Cone 2920 3440 4130

45000 Hank 2900 3580 4460Cone 3470 4140 5030

Table 7-Return on Investment ('/:.) for Different RotorCosts and Years

Rotor cost at 20s 30s1980 prices

Rs 1980 1990 2000 1980 1990 2000

Rotor speed, 36.000 rpm

COile Yarn

3000 28.5 31.2 34.7 24.7 26.9 29.84500 23.3 25.5 28.4 19.7 21.4 23.S6000 19.8 21.6 24.0 16.4 17.9 19.87500 17.1 18.7 20.8 14.0 IS.3 17.0

Hunk Yarn

3000 26.4 28.4 31.0 22.9 24.6 26.84S00 21.6 23.2 2S.4 IS.3 19.6 21.46000 18.3 19.7 21.S IS.2 16.4 17.87S00 IS.9 17.1 18.6 13.1 14.0 15.3

Rotor speed, 4S.000 rpm

COile Yarn

3000 30.7 33.7 37.7 26.8 29.3 32.64S00 25.7 28.2 31.6 21.8 23.9 26.66000 22.1 24.3 27.1 IS.5 20.2 22.57500 19.4 2U 23.8 16.0 17.5 19.5

HUllk Yurn

3000 28.1 30.3 33.2 24.6 26.5 28.94S00 23.S 25.4 27.S 20.1 21.6 23.66000 20.3 21.8 23.9 17.0 18.3 20.07500 17.7 19.1 21.0 14.7 15.8 17.3

--- ---------------

yarns is 16.2s and it will go up to about 18s in 1990 and20s in 2000 (Table 5). An earlier study? at SITRA in1972 also showed the optimum economic count to bearound 16s. One would have expected the economiccount to become finer during the past 10 years, but thishas not happened. because the cost of the OE machineshas increased since 1972 by 2.7 times as against about 2times for ring spinning. With a rotor speed of 45,000rpm and a rotor cost of Rs 6000. the economic count isabout 18s and it will increase to 20s in 1990 and 25s in2000. A count of 28s can become economical in 1990,provided the rotor cost is Rs 4500 at 1980 prices.

80

In the case of hank yarns, for a rotor cost of Rs 6000,the counts above 20s will not be economical in the nearfuture. Only in the year 2000 and at higher speed of45,000 rpm, 20s will be economical. For a lower rotorcost of Rs 4500, 20s will be viable even earlier than1990, and with a higher speed of 45,000 rpm evencounts up to 27s can be produced economically in2000.

In general, the OE system will be more economicalthan the ring spinning system if the cost of the rotor forequal production does not exceed by about 2 times in30s cone and 20s hank and 1.5 times in 30s hank.

ConclusionsThe OE system would be highly economical in 6 and

!Os counts, yielding a return on capital of 30-40 ~{ In20 and 30s counts, however, the OE system isuneconomical, as it gives only about 20 I'~return in 20sand 16.5 I'~in 30s as against a yardstick of 251'0 returnapplied for the ring spinning system. The break-eveneconomic count for the OE system is about 17s.

Rotor cost is a major factor affecting the economics.For every Rs 500 decrease in rotor cost, the return for agiven speed would increase by about 1I'~.The higherrotor cost would be justifiable only if it is accompaniedby increase in speed, at least to the extent of 1.25 timesthe cost.

The advantage from higher rotor speeds for therange considered derives entirely from lesser capitalcosts with practically no difference in conversion costs.The return on capital is more by t .5-2:%.for rotor speedhigher by 25 ~;,.

The production of hank yarns on the OE systemreduces the returns by 1.5-2 I'~compared to the coneyarns and the break-even count for hank yarns is only15s. The operatives engaged in 20 and 30s counts forconverting cones to hanks would outnumber the totalof those engaged in all departments from mixing to OEspinning.

In order to compete successfully with the small-scaleunits in the case of 6 and 10s counts. it may benecessary for OE-spun yarns to fetch 15 "--;,higherprices or use raw materials cheaper by 18 'I,.. With agood edge in quality, which the Of.yarns commandover the yarns produced in the small-scale units, it ispossible to realize these.

As a general rule, it may be stated that the OE systemwill be economical if the cost of rotor for equalproduction does not exceed 2.5 times the cost of a ringspindle in 20s cone, 2 times in 30s cone and 20s hank,and 1.5 times in 30s hank.

The projected estimates for future indicate a higherreturn for the OE system to the extent of about 2/';, int 990 and over 41'0 in 2000. The economic count forcone yarns will be 20s in 1990 and close to 30s in 2000.

RATNAM: ECONOMICS OF OPEN-END SPINNING IN INDIA

Appendix I-Expression for Calculating the Contribution due to Savings from Increased Wages in Future

1 Current wages per spindle per year in Rs w

2 Rate of increase in wages per annum g

3 Rate of increase in other costs 0

4

5

Hank yarns above 20s wilt not be economical in theforeseeable future.

It is expected that the mathematical formula derivedand the general conclusions reached relating the drumspeed and the economic rotor costs will, to a largeextent, hold for other makes also. However, in the caseof very high speed OE machines like Autocoro, theactual performance of the machines should be studiedunder Indian mill conditions. One of the crucial pointsto be specifically ascertained is whether satisfactoryperformance can be obtained without air conditioning.Otherwise, higher costs of power associated with airconditioning will render these machines uneconomic.

Rate of interest

No. of years

6 Present worth of savings in wages at 'w' rupees per yearfor 'n' years

7 Present worth of savings in wages, with 'w' increasingl+g

at the rate of -- per annum1+0

8 The factor for adjusting the wages IS obtained bydividing (7) by (6)

AcknowledgementThe author is thankful to Shri R. Rajamanickam for

assistance in the computation and interpretation of thedata.

References

Srikantaiah G. Ratnam T V. Swaminathan V & Shankaranaraya-nan R. Economics of open-end spilllling. paper presented atthe 22nd joint technological conference. ATIRA. 1981.

2 Sreenivasan K. Prospects .of open-old spillllillg in lndia, paperpresented at the UNIDO expert-group meeting on newtechniques in yarn and fabric production. Manchester. 1972.

nWx (1 +ir-I.

i (1 + i)" 1

(I +R)"W x (l + i)" - --1+0

(1 + i)" - 1 [( I + i) - I + g]1+0

[(1 +ir-(Wo)"] x i[

I+g][(1+ i)" - 1] (I + i) - ~1+0

Assuming a machine life of 15 years, interest rate of 18 /'~, rate of increase of 10 /'~ in wages, and a rate of increase of7 ~~)for other costs, the wage adjustment factor is 1.128 instead of 1.000, that is, 12.8 % higher.

81