Q-and-A

Apparel Online - - Mind Tree -

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.

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