According to latest official data released, Indian apparel exports is in a recessionary zone with decline of (-) 17.78% for the month of March 2018 against the corresponding month of March 2017. Further India’s apparel production has shown a decline of (-) 4.7% in the month of February and a decline of (-) 9.9% for the period April-February 2017-18… Even in this scenario, we find some companies doing well and expanding. Are you one of them…? If yes, please share reasons of doing well in this difficult period?
Vivek Saxena, Director, Moissanite Apparels, Noida
We are growing at the rate of 20 per cent, but at the same time we are at that critical point where one wrong step will destroy everything. To continuously perform well, we are conducting small workshops in our factory and also motivating all professionals, making it clear to them that we are in a position where there is no space for any mistake. We are trying to make sure that if 6,000 pieces are to be delivered, we should cut fabric for the
6,000 pieces only. Similarly, when buying polypack for packaging, no extra purchase or minimum extra purchase should be there. Nobody across the entire company or factory should be a reason to add extra cost. Our team is geared up, be it about taking leave or proper utilisation of time.
All this is the need of the hour as we are under pressure and highefficiency is required at all levels. I don’t want to sound negative but all of us know about policies and ground realities. Doesn’t the high fuel price have an impact on our business? Same is with the delayed refunds and many other such things. There is no profitability at all in business and I have stopped seeing P/L account.
Vinod Thapar, President, Knitwear and Textile Club, Ludhiana
Apparel export industry is passing through one of its toughest phases, and survival for growth is mainly for those companies that are completely organized. I have observed that small or even mediumlevel companies that were not working in organized way are down by almost 60 per cent from their previous year’s business, which is in fact very sad. Even to manage now, one has to plan in a way that he need not depend on Government subsidy or any kind of incentive. Yes, it is very difficult, but there is no other way apart from these two solutions.
S. Alagesan, VP – Quality Assurance/ Sustainability/CSR, Eastman Exports Global Clothing, Tirupur
To survive in this scenario, our industry has to trim down whatever and wherever it is possible. Only then will we be able to survive. As far as our company is concerned, we are a close loop company; so we are able to perform well and improve continuously. I don’t agree if someone says that there is no further scope of improvement in his factory or overall systems. On a global scenario, Bangladesh is also doing value-added garments; so India has to see the things differently and with a new perspective.
Manoj Sahu, Partner, Sahu Exports, Noida
In the last 25 years, this is the first time that we have seen decline in growth and are now in the process of evaluating where we missed out and how we can maintain our growth level. Whatever the external factors, we have to continue to improve ourselves as orders are there in the market for Indian exporters, but costing is a big challenge. No matter how good we are in overall efficiency, the only way forward is to improve it further. On market front we are trying to do some niche products, but it too has limitation. In Delhi-NCR, one is used to doing volume business but to continue doing the same, one has to move outside from this region and set up factories in emerging hubs, where cost is less. Though we don’t have any such plan as of now, but if required in future, we will think on these lines too.
Prashant Agarwal, JMD, Wazir Advisors, Gurgaon
The issue you raised is important to all segments and all industries. To cut costing, we have to increase productivity, efficiency and also improve our services which might be average as of now. These are basic things, but it is a gradual improvement and takes time. Industry understands the same and is applying strategies to achieve the goal. This is something one should not avoid. Despite being under heavy pressure, there is enough scope for growth as buyers are still looking at India.
M Ganesh Babu, MD, Sudarsan Clothing, Tirupur
Yes, we are doing better than we did the same time last year. After two failed winters and a lot of money lost in un-serviced overheads during those months, we took additional efforts to secure winter orders this year.
All these orders were very competitively priced, and needless to say, older duty drawback rates mattered due to which we were not sure whether to accept the orders. We, however, did accept and due to the weakening rupee, it is going to be alright.
As for recipe for growth, we would like to share that
all factors matter. So long as the promoter is sincere, even the odds may turn out to be an advantage for the business. Take for example our case; even though we are a small garment factory, we have always questioned the prudence of operating a dedicated sampling unit to support our factory. Ideally a garment factory of our size would surrender to a larger exporter. Though its future is sealed, the sampling and office overheads are much smaller. However, due to our direct export ambition, we stayed committed to our sample room. This always left a huge hole in un-serviced overheads during the off-season each year.
Some of the most serious challenges faced by the Indian garment export industry are the lack of adequate infrastructure and an inefficient banking system. China has a pegged exchange rate mechanism (Chinese yuan is 6 times cheaper than the USD even as China has multifold trade surplus over the US). Chinese bank
NPA rate is 68% (read as 100% state subsidy for businesses). China also has a state-of-theart infrastructure. There is not a single port that can harbour a mother vessel that we can use, this means that nearly 10 days will be wasted in each Europebound shipment in hopping over Colombo. Bankers too are partial, and crystallize a sticky bill on the very 181st day of overdue even as they debit ECGC premiums from our accounts every month. They will not pass even a Rs. 2,500 cheque under temporary overdraft (TOD) in spite of having collected crore of rupees in interests over the years. What is worst, there are about 18 unannounced automatic debits of bank charges which the account balance will have to survive before servicing an issued cheque.