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Monday, 22 November 2021

59 per cent of Indian apparel factories have good orders

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As the last quarter of the calendar year 2021(October-December) has started, apparel factories in different countries will be targeting a positive ending of yet another sluggish year for businesses. EU and US celebrate their festive seasons in this quarter every year that results in an order surge and this year will be no different. Vietnam has come out of COVID-19 lockdown, Bangladesh is gradually gaining pace, Indian factories are grabbing every possible opportunity as China remains stagnant, and Pakistan is performing at an all-time high in its apparel business. Amidst this scenario, Apparel Resources surveyed Indian apparel manufacturers to find out if their factories are all set for Q4 ’21 (October-December) to conclude 2021 on a high note.

In this survey, about 63 Indian companies participated and 59 per cent of the respondents said that their factories are booked while 25 per cent said that there is no lack of orders and 16 per cent said that they are just surviving. Markets picking up across the globe, some orders shifting from Vietnam and China to India are main reasons for the good order booking for Indian exporters.

Alagesan SenniappanSenior VPQuality AssuranceCSRSustainable TextilesEastman Exports, Tirupur told, “We have more orders of essentials products compared to value-added garments. There are two reasons for the same. First, as buyers don’t wish to buy costly garments and secondly, a chunk of Vietnamese orders have shifted to us.” Working with many leading brands, Eastman Exports is one of the most respected apparel export houses of Tirupur.

Chandra Bhan KatariaDirectorKatbro CorporationNoida is also of the view that a good amount of business is there and compared to woven, demand of the knitted products is still more. He has seen good demand for loungewear and knit pants.

India Today Fashions is one of the well-known companies in Jaipur. Rajendra BhatiaMD of the company is optimistic about the order flow at present.

But at the same time, the challenge for garment manufacturers is liquidity crunch as they don’t have enough funds with them. “Whatever loan we got recently during Covid from the Government, instalments of them are now being deducted every month. At the same time, be it fabric mills or fabric suppliers, most of them are not giving fabric on credit. Those supplying on credit give maximum one month period while earlier the same was two or even three months,” shared the GM finance of an apparel company who doesn’t wish to be quoted.

Some of the exporters are of the opinion that due to the high price of cotton, buyers are preferring to place an order having more focus on polyester. Though the price of polyester is also increasing, it is less compared to cotton. Harish Dua, MD, KG Exports, Ludhiana has observed this strongly and as he doesn’t have enough orders from overseas markets, he is now focusing on the domestic clients. But he is hopeful and said, “Yes, stability is a must for prices. But I feel that the price should come down in next few weeks and then again we will have orders from overseas clients. Till then there is no other option.”

Orders are mostly with

  • Companies having deep pockets
  • Having integrated set-up and managing cost at every process
  • Companies doing knitted products mainly
  • Small exporters working with boutique or online sale-based buyers

Alagesan Senniappan said that as per the scale of operations, many big companies make sure to have a certain stock of raw material with them, so they face the burden of hiked price.

Some of the apparel exporters are also of the opinion that in these conditions, unorganised or small exporters who are working with small buyers, are in benefit as they are sourcing raw material from non-compliance suppliers and don’t have any major issues.

Some of the companies having a strong reputation in the market and strong relations with their suppliers are not facing any issue of raw material sourcing but the high price of raw material is a big concern for them and adding to their worry is further uncertainty. And such things are not in their control at all and most of the buyers are also not supporting despite knowing all facts.

Rajendra Bhatia told, “There is a hike of at least Rs. 30-40 per cent per metre as the price of not only fabric, but even of dyeing and printing has also increased and there is no clarity when and where this hike will stop.” He further added that as costing has increased, few of the orders which he was supposed to receive, have shifted to other countries. He even feels that banks are not supporting wherever they can support.

Apart from the high cost, restriction on travelling is also an obstacle for many exporters as they were used to travelling a lot and it was a major tool for them to get more orders and better negotiation. “In the changing conditions, it is not possible to have much business with the old buyers and without starting full-fledged travelling as it used to be pre-Covid,  working with new buyers can’t take place,” said Rajendra.

Challenges are like an inherent part of the textile and apparel business but the good thing is that this is almost the first time after the beginning of Covid that industry sentiments are quite high and the major part of the industry have optimism.

The increased price of yarn, chemicals and other raw materials is a global issue and various countries are asking for a justified price. For example, Faruque HassanPresidentthe Bangladesh Garment Manufacturers and Exporters Association (BGMEA) highlighted that this hike in the global supply chain has pushed up production costs in garment manufacturing. He underscored the need for justified price and more empathy towards supply chain partners to make the supply chain sustainable.

Source : https://in.apparelresources.com/

    
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