Q-and-A

Apparel Online - - Mind Tree -

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.

Pa­van Kapoor,

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.

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