From the general buzz in the industry, picked up from various exhibitions and industry events, it appears that there are many orders in the market and exporters can easily pick up work, yet this is not happening… Why? What is stopping companies from picking up fresh orders… Is the positivity more perceived than real?
Philomena John, Owner, Cotton Blossom India, Tirupur
Business is really-really tough, prices are very low and there is no margin at all. We are forced to work only on turnover. The market itself is looking for veryvery cheap garments. One has to be very competitive. People talk about compliance, ethics and all that, but ultimately one can see how the price is being fixed and matched, none of these things feature with regard to price so we can’t compete.
Somebody somewhere has to absorb the cost; most of the time pressure is on manufacturers. All stakeholders need to look at where the cost and margins are going. We at our own level are investing in technology and training as these are the only way out, but the Government should pitch in and support.
Nimish Shah, Director, Amber Home, Mumbai
Orders are there in the market but not much. We are into home furnishing as well as into apparels and for us home segment has comparatively fewer orders than apparel. The corporates in home segment do have good orders while in apparel segment, both corporates as well as SME, have orders.
To the best of my understanding and experience, we are able to match the price as the strong dollar is in our favour, the cotton price is also little down and towards stability, so the price is not a major issue. Medium- or small-level buyers at least don’t argue on the point of the strong dollar as they have small orders and don’t want to take any risk regarding quality or timely delivery. But I must say that this currency fluctuation is not a healthy sign for business.
The Government should make sure about rupee’s stability against dollar.
Hitesh Thakkar, Director, Imperial Textiles, Tirupur
Last month Rayon yarn’s price was Rs. 206 per kg, while this month so far, it is somewhere around Rs. 218 per kg. So, such uncertainty and hike in yarn prices are somewhere forcing apparel exporters to hesitate as far as order booking is concerned. Recently we felt that prices are coming down a little bit but again all of a sudden they are up. The orders are there in the market but to take them on right price is something that does not seem possible in this condition. Whenever this kind of sentiment prevails that orders are good, or have started coming to India, immediately spinners start maintaining the price very strictly.
We often hear that to some exporters, they (spinners) give under-costing. They quote one price but below the table, they charge lesser… All this is affecting the business of fabric suppliers like us and apparel export too. The solution is only with the Government as the stability of yarn prices is only in the hands of Government. In case, yarn prices get stabilised, business will definitely grow. There is no other way as buyers are not supporting.
Selvakumar S, CEO, E-Land Apparel, Bangalore
Overall business is shrinking.
But one has to understand that demand is there, and is also increasing day by day, and year after year. The people have buying power, but at the same time challenges are also there. Nobody is willing to invest, even the people who make the money from the garment industry, are not investing much.
As a company, we are also facing challenges which are hard to overcome. We are going for automation but still, there is the struggle due to various reasons. Further, we are also exploring Jharkhand and Andhra Pradesh as low-cost manufacturing places. The Government, therefore, should support industry.
Sanjay Anand, Operation Head, Bloomcraft Apparels, Bangalore
The garment industry is not doing so well, but it is being said that after four-five months, things will improve. A lot of designers are being hired by many exporters so it means the future is positive. Since designers are there, so a lot of sampling is also going on which is again a positive indication. The industry is also expecting to improve the overseas market as well as see the impact of improvement in Indian policies and rules and regulations.
India has seen very profitable times in the garment industry and at this moment also, they want the same but it is not possible… Most of the exporters want all readymade solutions for everything, so they can make money within a very short span of time. It is true that in India, returns on investment are not so good, so the industry as a whole is not much interested to invest in advanced technology, and instead they rather think of shifting their factories to
those areas where labour is cheaper and Government subsidies are being provided. I feel they should strongly invest in technology, training and should involve industrial engineering… Without these, exporters can’t achieve the required productivity and control cost. The compliance cost from buyers’ side is also something that one needs to understand, and consider. As a company, we are also facing challenges like worker absenteeism, especially in festival season, so we try to grab those kinds of orders where we have more savings. We take such small orders which require more typical operations so that SAM (Standard Allowed Minutes) can be increased, and we can get more money from it.
MD, IIGM, Bangalore
I am also perplexed as to why exports are down; if you look at today’s environment, especially the weakening rupee, it is putting Indian exporters in a reasonably good position as 5 to 6 per cent is a critical difference. This kind of weak rupee is strong support for exporters; strong rupee earlier became a big challenge for them. I am hopeful that if rupee remains weak, it will end up at 75. So this will be an interesting story for Indian apparel exporters… I think that the Indian rupee has been too strong for too long. From 2015 till today, Indian rupee has depreciated only by 2 per cent. What has happened with other countries in this period…? Russian rouble depreciated nearly100 per cent; similarly Brazil currency depreciated 60 per cent and was topsy-turvy in Turkey too. Therefore, why would export grow in an environment where India’s rupee is stuck at that level…? I feel that sign of weakening rupee is a good thing for this industry and this can actually change the equation. So, I am very hopeful regarding exports now.